A pop-up bar in downtown Houston is being sued by Viacom, the parent company of Nickelodeon, for alleged trademark infringement related to the bar’s cheesy Spongebob Squarepants theme.
Opened earlier this year at 711 North Main, Rusty Krab bills itself as a SpongeBob SquarePants-inspired experience for the ultimate bikini bottom fan, complete with multi-room photo ops, daily activities like scavenger hunts and tropical food and cocktails too Names like Chum Nuggets (buffalo chicken bites) and Pinky the Star’s Hideaway, a drink made from peach Ciroc, Malibu, and Sprite.
These pop-ups attempt to circumvent copyright laws with side references to the original inspiration – Rusty Krab is, of course, a nod to Krusty Krab, the fictional fast food restaurant on the show. Instead of Squidward, Rusty Krab’s grumpy till is called Octoword. Patrick Star is referred to as Pinky, and Spongebob himself is referred to as “The Big Sponge” instead.
Court records from Viacom’s attorneys claim that these cheeky tweaks are insufficient to distinguish the pop-up as a separate entity from the cartoon and the huge amount of officially branded merchandise that emerged from the twenty-year-old show. The media conglomerate has also accused the pop-up of illegal cybersquatting for using the term “rusty crab” in its domain name.
In a lawsuit filed in the US District Court on Aug. 11, Viacom alleged that the pop-up was “a bad faith attempt to capitalize on the success of the SpongeBob SquarePants franchise,” and argued that the restaurant’s branding was aimed specifically at children even though a menu with mostly alcoholic drinks is served. According to Viacom, associating Spongebob brands with alcohol is a violation of the licensing terms for any product, let alone an unauthorized pop-up.
The lawsuit further alleges that the Rusty Krab’s use of trademarked Spongebob images on their social media pages misled parents into believing the bar is officially affiliated with the show and that they are “numerous has received public complaints from concerned parents, after high payments, “ticket prices, believing they are getting an authentic SpongeBob SquarePants experience, and expressing disgust at the allegedly unsanitary conditions and unsafe food in the restaurant.
Numerous social media reviews of the pop-up point to high ticket prices in addition to surcharges for mediocre food and drinks, mandatory tips of 18% even for small parties, plus worn and dirty costumes, dirty sofas, insulation from holes in the ceiling, and other problems.
Viacom argues that these terms are detrimental to the “trusted Nickelodeon brand,” and has urged the pop-up’s parent company, Pixi Universal, to immediately stop using any Spongebob images, brands, or names associated with the show . The company is also demanding $ 350,000 in damages, all profits from the restaurant’s sales, and a 10 percent royalty.
Viacom apparently only sent a cease and desist letter to Pixi on May 25, before the lawsuit was filed. The very next day the restaurant announced that it was extending its running time until August 1st. From the editorial deadline, tickets for the pop-up will be available from now until the end of 2021.
As a result, a disclaimer on Rusty Krab’s website reads: “We are not affiliated, associated, authorized, endorsed or in any way officially affiliated with Nickelodeon or the Spongebob brand or any of its subsidiaries or affiliates. This is Kefi HTX’s artistic adaptation of an amazing series that added value to our childhood! ”
This isn’t the first time Viacom has sued a Houston area restaurant for using Spongebob’s image. In 2017, the company sued a pop-up called Krusty Krab before it could even open its doors in Kemah. In this case, the restaurant owner claimed he had never heard of SpongeBob and decided it was “not big enough” to change the name.
TMZ, who first reported the lawsuit, spoke to Sanju “Sam” Chand, the owner of the pop-up. Chand said the bar was intended solely as a parody and there was no consumer confusion.
Chands company has not yet responded to the lawsuit in court. Stay tuned for more details as this case goes through the courts.