United States District Court, S.D. Texas, Houston Division
MEMORANDUM OPINION & ORDER
H. Miller United States District Judge.
before the court are plaintiff, Viacom International
Inc.'s (“Viacom”) motion for summary judgment
(Dkt. 19) against defendant IJR Capital Investments, LLC
(“IJR”), and defendant's motion to exclude
the expert report and expert testimony of Dr. Edward Blair
(Dkt. 17). On December 20, 2016, the court held a combined
hearing regarding the two motions and ruled that IJR's
motion to exclude the expert report and expert testimony is
DENIED. Dkt. 31. After considering the parties'
arguments, motion, response, reply, and applicable law, the
court is of the opinion that the motion for summary judgment
(Dkt. 19) should be GRANTED IN PART and DENIED IN PART.
a trademark infringement dispute over the name for IJR's
proposed restaurant, “The Krusty Krab, ” which is
the same name and spelling of a fictional restaurant in the
animated television series, “SpongeBob SquarePants,
” that airs on Viacom's Nickelodeon network. Dkts.
19, 26. Since 1999, Viacom has used “The Krusty
Krab” in its television show. Dkt. 19 at 4. The
restaurant appeared in 166 of 203 aired episodes.
Id. On December 3, 2014, IJR filed a federal
trademark application for the mark, “THE KRUSTY KRAB,
” under restaurant services. Dkt. 19 at 7; Dkt. 21, Ex. 1
at 11-12 (U.S. Trademark Application Serial No. 86470477
(filed Dec. 3, 2014)). On November 23, 2015, Viacom sent IJR
a cease and desist letter requesting that IJR change the name
of the restaurant, refrain from using any of the SpongeBob
marks in connection with the restaurant, and to withdraw the
pending trademark application. Dkt. 1, Ex. 1. On November 25,
2015, IJR responded to the letter, stating that it
“rejects Viacom's claim of likelihood of consumer
confusion and respectfully declines to cease use.” Dkt.
1, Ex. 2.
January 29, 2016, Viacom filed the instant lawsuit with nine
claims against IJR under the Lanham Act (15 U.S.C. §
1125 (a), (c)) and state common law. Dkt. 1. On September 30,
2016, IJR filed its motion to exclude the plaintiff's
expert report and testimony of Dr. Edward Blair. Dkt. 17.
While IJR did not dispute the qualifications of the expert
himself, IJR made eleven objections to the expert report,
alleging “flawed” reasoning and methodology in
reaching the survey results. Dkt. 17 at 5. After reviewing
the parties' briefs (Dkts. 17, 23), record, evidence, and
applicable law, the court held that Viacom has shown by a
preponderance of the evidence that the challenged expert
report by Dr. Blair is admissible. Dkt. 31. Therefore,
IJR's motion to exclude the expert report and testimony
was DENIED. Dkt. 17. Viacom moves for summary judgment on
eight of nine claims, which the court will now consider. Dkt.
shall grant summary judgment when a “movant shows that
there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(c). “[A] fact is genuinely in dispute
only if a reasonable jury could return a verdict for the
non-moving party.” Fordoche, Inc. v. Texaco,
Inc., 463 F.3d 388, 392 (5th Cir. 2006). The moving
party bears the initial burden of demonstrating the absence
of a genuine issue of material fact. Celotex Corp. v.
Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548 (1986). If
the party meets itsburden, the burden shifts to the
non-moving party to set forth specific facts showing a
genuine issue for trial. Fed.R.Civ.P. 56(e). The court must
view the evidence in the light most favorable to the
non-movant and draw all justifiable inferences in favor of
the non-movant. Envtl. Conservation Org. v. City of
Dall., Tex., 529 F.3d 519, 524 (5th Cir. 2008). The
court must review all of the evidence in the record, but make
no credibility determinations or weigh any evidence;
disregard all evidence favorable to the moving party that the
jury is not required to believe; and give credence to the
evidence favoring the non-moving party as well as to the
evidence supporting the moving party that is uncontradicted
and unimpeached. Moore v. Willis Ind. Sch. Dist. ,
233 F.3d 871, 874 (5th Cir. 2000).
the non-movant cannot avoid summary judgment simply by
presenting “conclusory allegations and denials,
speculation, improbable inferences, unsubstantiated
assertions, and legalistic argumentation.” TIG Ins.
Co. v. Sedgwick James of Wash., 276 F.3d 754, 759 (5th
Cir. 2002); Little v. Liquid Air Corp., 37 F.3d
1069, 1075 (5th Cir. 1994) (en banc). By the same token, the
moving party will not meet its burden of proof based on
conclusory “bald assertions of ultimate facts.”
Gossett v. Du-Ra-Kel Corp., 569 F.2d 869, 872 (5th
Cir. 1978); see also Galindo v. Precision Am. Corp.,
754 F.2d 1212, 1221 (5th Cir. 1985).
has nine claims against IJR. Viacom moves for summary
judgment on eight of those claims: false designation, unfair
competition, and dilution under Texas common law and the
Lanham Act; trademark infringement under Texas common law;
and refusal of recognition under the Lanham Act. Dkts. 1, 19.
Trademark Infringement (Count 4)
prevail on a claim of trademark infringement under the Lanham
Act, a plaintiff must show: (1) it possesses a valid mark;
and (2) defendant's use of its mark creates a likelihood
of confusion as to source, affiliation, or sponsorship. 15
U.S.C. § 1051; Elvis Presley Enter., Inc. v.
Capece, 141 F.3d 188, 193 (5th Cir. 1998). It is
important to remember that a “mere reproduction of a
trademark does not constitute trademark infringement if there
is no likelihood of confusion.” 4 J. Thomas McCarthy,
McCarthy on Trademarks and Unfair Competition § 25:28
(4th ed. 2009). And, “likelihood of confusion” is
not possible confusion, it is probable confusion. Bd. of
Supervisors for LSU A&M Coll. v. Smack Apparel Co.,
550 F.3d 465, 478 (5th Cir. 2008). In this respect,
“[c]ontext is especially critical, ” and a court
is required to “consider the marks in the context that
a customer perceives them in the marketplace.”
House of Vacuums, 381 F.3d at 485.
ownership of a mark is established by use in the market, not
by registration. See Smack Apparel, 550 F.3d at 475;
Union Nat'l Bank of Tex., Laredo v. Union Nat'l
Bank of Tex., Austin, 909 F.2d 839, 842 (5th Cir. 1990).
Thus, the “senior user” who first uses the mark
in the marketplace “is entitled to enjoin other
‘junior' users from using the mark, or one that is
deceptively similar to it.” Union Nat'l
Bank, 909 F.2d at 842-43.
succeed in a trademark claim, the first element that Viacom
must demonstrate is that it possesses a valid mark. While a
registered mark with the U.S. Patent and Trade Office comes
with a presumption of validity, the Fifth Circuit has held
that ownership of a trademark is established by use, not by
registration. Id. at 842; Amazing Spaces, Inc.
v. Metro Mini Storage, 608 F.3d 225, 237 (5th Cir.
2010). Although Viacom did not register “The Krusty
Krab, ” it argues that it has a valid mark because it
has used “The Krusty Krab” continuously since
1999 when the iconic restaurant was featured in 166 of 203
aired “SpongeBob SquarePants” episodes, including
the pilot episode.Dkt. 19 (App. A ¶ 10, Ex. 5). The
“Krusty Krab” backdrop is regularly featured in
the television show and was also depicted in two SpongeBob
SquarePants feature films released in 2004 and 2015, that had
total gross receipts of over $470 million. Dkt. 19 (App. A
¶ 11, Ex. 6; App. B ¶ 3, Ex. 2). Examples like
these support Viacom's argument that it has a valid mark
based on its use of the mark in commerce. Further, Viacom has
established ownership through its sales and licensing of
consumer products. Dkt. 19 at 13 (citing Turner v. HMH
Pub. Co., 380 F.2d 224, 229 (5th Cir. 1967) (“[A]
trade or service mark may be acquired through its use by
does not dispute these facts. Rather, IJR argues that Viacom
never registered the mark for “The Krusty Krab, ”
and that Viacom cannot have a trademark right in a title of a
fictional restaurant. Dkt. 26 at 7-9, Ex. A (Notice of