Houston’s Spongebob-Themed Pop-Up Bar Slapped With Trademark Infringement Lawsuit

A Downtown Houston pop-up bar is being sued by Viacom, the parent company of Nickelodeon, over allegations of trademark infringement regarding the bar’s kitschy Spongebob Squarepants theme.

The Rusty Krab, which opened at 711 North Main earlier this year, 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 with names like chum nuggets (buffalo chicken bites) and Pinky the Star’s Hideaway, a drink make with peach Ciroc, Malibu and Sprite.

These pop-ups try to circumvent copyright laws with sideways references to the original inspiration — Rusty Krab is of course a reference to Krusty Krab, the fictional fast food restaurant on the show. Instead of Squidward, the Rusty Krab’s dour cashier is named Octoword. Patrick Star is referred to as Pinky, and Spongebob himself is known instead as “The Big Sponge.”

Court filings from Viacom’s lawyers assert that these cheeky tweaks are not enough to distinguish the pop-up as a separate entity from the cartoon and the massive amount of officially-branded merchandise that has spun off from the twenty-year-old show. The media conglomerate has also accused the pop-up of illegal cybersquatting for using the phrase “rusty krab” in its domain name.

In a lawsuit filed in the United States District Court on August 11, Viacom alleges that the pop-up is “a bad-faith attempt to capitalize on the success of the SpongeBob SquarePants franchise,” arguing that the restaurant’s branding is specifically targeted towards children despite serving a menu of mostly alcoholic beverages. According to Viacom, associating any Spongebob marks with alcohol is a violation of its licensing terms for any product, much less an unauthorized pop-up.

The lawsuit further alleges that the Rusty Krab’s use of trademarked Spongebob imagery on its social media pages has deceived parents into thinking that the bar is officially affiliated with the show, and that it has received “numerous public complaints from concerned parents who, after paying high ticket prices believing they would get an authentic SpongeBob SquarePants experience, voiced disgust at the Infringing Restaurant’s purportedly unsanitary conditions and unsafe food.”

Numerous social media reviews of the pop-up refer to high ticket prices on top of additional charges for middling food and drinks, mandatory 18% gratuity even for small parties, plus worn and dirty costumes, soiled couches, insulation hanging from holes in the ceiling, and other issues.

Viacom argues that these conditions harm the “trusted Nickelodeon brand,” and have asked that the pop-up’s parent company, Pixi Universal, immediately cease using any Spongebob imagery, trademarks, or names affiliated with the show. The company also seeks $350,000 in compensatory damages, any profits from the restaurant’s sales, and a 10 percent royalty fee.

Viacom apparently first sent a cease-and-desist to Pixi on May 25, before the lawsuit was filed. The very next day, the restaurant announced it was extending its run through August 1. As of press time, tickets for the pop-up are now available through the end of 2021.

A disclaimer on the Rusty Krab’s website reads thusly: “We are not affiliated, associated, authorized, endorsed by, or in any way officially connected with Nickelodeon, or the Spongebob brand directly, or any of its subsidiaries or its affiliates. This is Kefi HTX’s artistic adaptation recreation of an amazing series that added value to our childhood!”

This isn’t the first time that Viacom has sued a Houston-area restaurant over its use of Spongebob’s image. In 2017, the company sued a pop-up called the Krusty Krab before it could even open its doors in Kemah. In that case, the restaurant owner claimed that he’d never heard of SpongeBob, and decided it “wasn’t a big enough deal” to reconsider changing the name.

TMZ, who first reported on the lawsuit, spoke to Sanju “Sam” Chand, the owner of the pop-up. Chand said the bar was intended strictly as a parody, and that there has been no consumer confusion.

Chand’s company has not yet responded to the lawsuit in court. Stay tuned for more details as this case moves through the courts.