Published in Landslide Vol. 11 No. 4, ©2019 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.
Feature
Fictional Brands, Famous Marks: Recurring Characters, Places, and Elements Can Serve as Source Identifiers for Creative Works
By Ian G. McFarland and John T. Winemiller
Consumers of pop culture associate “Stay Puft” with marshmallows, “Cheesy Poofs” with snacks, “Duff” with beer, and perhaps “Finder-Spyder” with search engines. Each of these brands is decidedly fake. Yet their entry into the popular lexicon has added to the very real fame of Ghostbusters, South Park, The Simpsons, and Breaking Bad. Does this mean fictional brands merit trademark protection? Maybe so, according to several recent court decisions. In the real world, fictional brands may become source indicators—not of fake products, but of the creative works in which they serve as props and plot elements.
For centuries, trademarks have served as indicia of the source and quality of goods and services, and laws like the Lanham Act have been drafted to protect the integrity of trademarks and, thereby, the interests of consumers.1 Given this history, extending trademark protection to fictional brands seems at first blush to overextend and even pervert the goals of the trademark regime.
But U.S. law has long protected trademark holders from those free riders who would unfairly seek to capitalize on the goodwill of others. The Lanham Act, for example, has from its enactment in 1946 prohibited anyone from using in commerce “any word, term, name, symbol, or device, or any combination thereof,” that “is likely . . . to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person.”2 Congress ramped up such prohibitions with the Federal Trademark Dilution Act (1996, 2006, 2012), which protects famous marks from “dilution by blurring,” the “association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark.”3
Older appellate decisions have taken on the question of whether specific elements from within a television show—as opposed to the title of the show itself—can receive trademark protection. In the 1980s, the Fifth Circuit Court of Appeals found that trademark protection extended to certain characters, places, and elements from the fictional comic book series Conan the Barbarian, and the Second and Seventh Circuit Courts of Appeals held that trademark protection covered the distinctive colors and emblems of the GENERAL LEE muscle car featured in The Dukes of Hazzard television series.4 Protecting such creative elements from television shows that also identified the source of actual, commercialized entertainment products, the courts found, was consistent with the broader aims of trademark law.5
In light of these decisions, it seems clear that the title character’s name, overall motif, and famous logos of a popular creative franchise are protectable trademarks. The consistent and prominent roles these elements played in their creative works, the courts found, demonstrated that they served as source identifiers for the entertainment franchises.6 Drawing on these decisions, recent courts have expanded the trademark protection afforded to fictional elements of creative works even further.7
The Krusty Krab Restaurant
The SpongeBob SquarePants animated television series debuted in 1999 and quickly wormed its way into the ears of adults and the hearts of children across the United States.8 For the past 15 years, it has been the most watched animated television show.9 SpongeBob, the square-pants wearing sea sponge of the title, lives in a pineapple in the underwater city of Bikini Bottom and works as a fry cook at a fast-food restaurant called “The Krusty Krab.”10 The show chronicles the adventures of SpongeBob and his friends, coworkers, and fellow Bikini Bottomers.11 Today the franchise includes two feature films, a musical play, video games, a mobile app, and scores of licensed merchandise.12
In 2014, IJR Capital Investments LLC drew up plans to open a chain of seafood restaurants in California and Texas named THE KRUSTY KRAB.13 Though IJR’s principals were aware of the name’s use in the SpongeBob SquarePants franchise, they found no evidence that the name was in use on an actual restaurant.14 So IJR filed an intent-to-use trademark application in the United States Patent and Trademark Office (USPTO) for the mark, in standard character form, for “restaurant services” in International Class 43.15 No one opposed the application, which was allowed in August 2015. Then, as IJR was preparing to open its first location in California, it received a cease and desist letter from Viacom International Inc., the owner of the SpongeBob SquarePants franchise.16
Viacom sued IJR in the U.S. District Court for the Southern District of Texas in January 2016, stating nine claims including trademark infringement under state law and unfair competition under the Lanham Act.17 Viacom alleged that IJR’s use of the mark for restaurant services was likely to confuse consumers by causing them to believe that the restaurant services were affiliated with, sponsored by, or connected to Viacom and its valuable SpongeBob SquarePants franchise.18 In March 2017, the district court granted Viacom’s summary judgment motion in part, holding that Viacom had established ownership of THE KRUSTY KRAB mark and demonstrated that IJR’s unauthorized use of the mark was likely to cause confusion.19 On review, the Fifth Circuit affirmed.20
For the panel, the salient question was whether Viacom’s use of THE KRUSTY KRAB mark was such that consumers would recognize it as an indicator of origin for particular goods or services.21 Borrowing guidelines from other cases, the court focused on the role of THE KRUSTY KRAB element in SpongeBob SquarePants, rather than the overall success of the entertainment franchise.22 On one side of the spectrum, the Trademark Trial and Appeal Board concluded that there were no trademark rights in the term “Romulans”—a fictional alien race from the Star Trek series—because the term was only used “from time to time” and not in a manner to distinguish any goods or services.23 Though the term did appear in various episodes, movies, books, and licensed merchandise, the court differentiated the limited role that the Romulans played in the Star Trek franchise from the central roles played by the fictional elements DAILY PLANET and KRYPTONITE in the Superman franchise on the other end of the spectrum.24 Like the latter elements from Superman, the record demonstrated that THE KRUSTY KRAB appeared in over 80 percent of SpongeBob SquarePants episodes, including the pilot, and played a “prominent role” in the franchise’s films, video games, and licensed merchandise (including stickers, children’s toys, an aquarium ornament, and shirts).25 Thus, the court found that the phrase was used as a trademark: “The Krusty Krab’s key role in ‘SpongeBob SquarePants’ coupled with the consistent use of the mark on licensed products establishes ownership of the mark because of its immediate recognition as an identifier of the source for goods and services.”26
The court also determined that THE KRUSTY KRAB was sufficiently distinctive to support trademark protection.27 A trademark may be inherently distinctive—such as when its “intrinsic nature serves to identify a particular source” (e.g., APPLE for computers28)—or it may acquire distinctiveness in the form of “secondary meaning” once the public comes to understand its primary significance as identifying the source of the product rather than the product itself (e.g., 5-HOUR ENERGY for energy drinks29).30 Applying the Fifth Circuit’s factors for determining whether a mark has secondary meaning, the court found that THE KRUSTY KRAB mark had been in use since the SpongeBob SquarePants franchise began in 1999, appearing in over 160 episodes and serving as a “central element” in the fictional universe; that Viacom had earned hundreds of millions of dollars from two feature films and from its extensive licensing programs; that numerous, successful advertising campaigns had depicted the mark; and that THE KRUSTY KRAB was frequently referred to in popular press.31 This evidence established beyond dispute that the mark possessed secondary meaning.32
Beyond Viacom’s ownership rights in THE KRUSTY KRAB mark, the Fifth Circuit also affirmed the district court’s finding that IJR’s use of the mark created a likelihood of confusion.33 Under the Fifth Circuit’s traditional factors for assessing likelihood of confusion, the court found that THE KRUSTY KRAB was a strong mark and that IJR’s verbatim use of it spawned confusion.34 The involved goods and services were similar because Viacom’s fictional use of the mark and IJR’s intended actual use of the mark were both for restaurants, and it was common practice in the entertainment industry for franchises like SpongeBob SquarePants to commercialize real-world embodiments of their fictional elements.35 Case in point: Viacom’s subsidiary, Paramount Studios, licensed BUBBA GUMP SHRIMP CO. for seafood restaurants modeled after the fictional business created in the movie Forest Gump.36 Viacom also submitted anecdotal evidence of actual confusion and a consumer survey showing approximately one out of every three respondents associated IJR’s proposed THE KRUSTY KRAB seafood restaurant with Viacom, or believed it was operated by, affiliated or connected with, or approved or sponsored by Viacom.37
The court agreed that no genuine issues of material fact precluded summary judgment as to Viacom’s trademark claims.38 The court admonished against construing its holding as conferring blanket trademark protection of THE KRUSTY KRAB mark to Viacom, but warned any future restauranteurs that using the mark would constitute infringement “absent a showing that the restaurant was developed in a context sufficient to avoid any likelihood of consumer confusion.”39
Sabacc—The High Stakes Card Game
“A long time ago in a galaxy far, far away . . .”40 a young Han Solo won the Millennium Falcon starship from Lando Calrissian during a card game known as “Sabacc”—or so the story goes.41 This narrative first appeared in a draft screenplay of the 1980 Star Wars movie The Empire Strikes Back and was thereafter included in several of the franchise’s novels.42 One volume published in 1983 explained the rules of the game, whereby contestants try to finish with a hand closest to positive or negative 23, all while their hands change at random or are revealed to the other players.43 During the last 35 years, the term SABACC has been included in card games, comic books, and television episodes within the Star Wars entertainment franchise.44
In 2015, Ren Ventures Ltd. and Sabacc Creative Industries Ltd. (collectively Ren Ventures) released a mobile app titled “Sabacc—The High Stakes Card Game.”45 The entities were not affiliated with the Star Wars franchise, but they intended to capitalize on its goodwill through the app.46 The app’s game rules mimicked those from the Star Wars novel, and the app’s content utilized Star Wars–inspired imagery, events, places, and dialogue from the movies.47 The app was free for download via the Apple App Store and Google Play platforms.48 In August 2016, Ren Ventures obtained a trademark registration for the SABACC mark from the USPTO in International Classes 9 and 41.49
The rights in the Star Wars franchise are owned by Lucasfilm Ltd. LLC and its affiliate (collectively Lucasfilm), which petitioned to cancel the SABACC registration at the USPTO and subsequently filed suit against Ren Ventures in December 2017 in the U.S. District Court for the Northern District of California.50 Lucasfilm pleaded claims for trademark infringement and unfair competition, among others, alleging that Ren Ventures’ use of the SABACC mark created a likelihood that consumers would be confused as to the source of the app.51
Ren Ventures promptly filed a motion to dismiss Lucasfilm’s trademark claims as implausible because, it argued, Lucasfilm could not have trademark rights in an expressive work used as the name for a fictional card game.52 The court disagreed. In his opinion, Judge Seeborg began his analysis by noting that Lucasfilm’s claims were not predicated on SABACC being a source identifier for a fictional card game.53 Rather, SABACC functioned as a trademark for Lucasfilm and the broader Star Wars entertainment franchise, “which are real entities that exist in commerce.”54 To be sure, the court noted the franchise’s “extensive licensing and merchandising arms” that used SABACC and other “fanciful elements” from the fictional Star Wars universe.55
Judge Seeborg also considered prior instances in which other courts found trademark rights in the fictional elements of an expressive work, including the GENERAL LEE muscle car from The Dukes of Hazard television series, the KRYPTONITE mineral from Superman, and THE KRUSTY KRAB restaurant from SpongeBob SquarePants.56 He rejected Ren Ventures’ attempt to liken Lucasfilm’s use of SABACC in Star Wars to Paramount’s use of the Romulans in Star Trek, which was found not to be a trademark when used as the predicate to oppose a rock band’s application to register the mark THE ROMULANS: “While the Board provided no explanatory reasoning for its conclusion that Paramount’s use of the name did not confer trademark rights, a reasonable consumer would not likely assume the rock band was affiliated with the Star Trek franchise on account of its name alone.”57 By contrast, the court found SABACC to be “associated with an important episode in the franchise’s storyline,” and that the game had appeared in Star Wars books, games, and television episodes.58 Consequently, Lucasfilm had adequately alleged that the term SABACC “signifies Lucasfilm and the Star Wars franchise in the minds of the consuming public.”59
Ren Ventures’ remaining attacks on Lucasfilm’s trademark rights implicated factual disputes.60 The contemporaneous use of STAR WARS as a trademark for the franchise’s products did not mean SABACC, too, could not also serve as a source identifier.61 And whether one of the franchise’s products actually used the SABACC mark when written in the Lucasfilm’s fictional Aurebesh language could not be resolved at the pleadings stage in view of Lucasfilm’s allegations that the characters translated to SABACC.62 Ren Ventures’ motion to dismiss was denied.63 The parties ultimately reached a confidential settlement in July 2018.64
The Limits of Protecting Fictional Trademarks
The unfettered ability to trademark a fictional brand name would represent a significant change and reorient the traditional goals of the trademark regime. Yet neither THE KRUSTY KRAB nor the SABBAC cases granted property rights in the marks in gross.65 Like the precedents on which they are based, these cases stand for the proposition that fictional brands merit protection only if they are so ubiquitous to an entertainment franchise that they may be viewed as inextricably linked to the franchise itself, and that such protection must be grounded in a likelihood of confusion—namely, that consumers will mistakenly believe a third party’s goods and services sold under the fictional name are sponsored by or affiliated with the entertainment franchise. This result makes sense both equitably and in terms of trademark law, for it would protect consumers by allowing them to assume the goods or services provided under the marks are backed by the goodwill of the trademark owners. In the absence of any likelihood of confusion based on popular fame, however, there is no justification for extending the weight and authority of the trademark regime to a creative idea untethered from a real-world brand.
Endnotes
1. See 1 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition §§ 5:3–5:4 (5th ed. 2017) (providing a history of United States trademark legislation and the legislative history of the Lanham Act).
2. 15 U.S.C. § 1125(a)(1)(A).
3. Id. § 1125(c)(2)(B).
4. Conan Props., Inc. v. Conans Pizza, Inc., 752 F.2d 145, 148, 150 (5th Cir. 1985); Processed Plastic Co. v. Warner Commc’ns, Inc., 675 F.2d 852, 859 (7th Cir. 1982); Warner Bros. v. Gay Toys, Inc., 658 F.2d 76, 77–79 (2d Cir. 1981).
5. See Conan Props., 752 F.2d at 150; Processed Plastic Co., 675 F.2d at 855–57; Gay Toys, 658 F.2d at 79.
6. See, e.g., Gay Toys, 658 F.2d at 79.
7. Viacom Int’l, Inc. v. IJR Capital Invs., L.L.C., 891 F.3d 178 (5th Cir. 2018); Lucasfilm Ltd. LLC v. Ren Ventures Ltd., 126 U.S.P.Q.2d 1515 (N.D. Cal. 2018).
8. Viacom Int’l, 891 F.3d at 183.
9. Id.
10. SpongeBob SquarePants (Viacom Media Networks television series May 1, 1999–).
11. Id.
12. Viacom Int’l, 891 F.3d at 183.
13. Id.
14. Id.
15. Id. at 183–84; see also U.S. Trademark Application Serial No. 86/470,477 (filed Dec. 3, 2014).
16. Viacom Int’l, 891 F.3d at 184.
17. Id.
18. Id.
19. See id.
20. Id. at 198.
21. Id. at 185.
22. Id. at 187.
23. Id. (citing Paramount Pictures Corp. v. Romulan Invasions, 7 U.S.P.Q.2d 1897, 1900 (T.T.A.B. 1988)).
24. Id. at 187–88 (citing Romulan Invasions, 7 U.S.P.Q.2d at 1897–1900; DC Comics v. Kryptonite Corp., 336 F. Supp. 2d 324, 332 (S.D.N.Y. 2004); DC Comics, Inc. v. Powers, 465 F. Supp. 843, 847 (S.D.N.Y. 1978)).
25. Id. at 188.
26. Id. at 189.
27. Id. at 191.
28. See 2 McCarthy, supra note 1, § 11:13.
29. See Innovation Ventures, LLC v. N2G Distrib., Inc., 779 F. Supp. 2d 671 (E.D. Mich. 2011), aff’d, 763 F.3d 524 (6th Cir. 2014).
30. Viacom Int’l, 891 F.3d at 189–90.
31. Id. at 190–91.
32. Id. at 191.
33. Id. at 198.
34. Id. at 192, 198.
35. Id. at 193–94.
36. Id. at 194. Other examples of such real-world commercialization of fictional brands include SEX PANTHER cologne from Anchorman and DUNDER MIFFLIN paper from The Office.
37. Id. at 197.
38. Id. at 198.
39. Id.
40. Star Wars (20th Century Fox 1977).
41. Lucasfilm Ltd. LLC v. Ren Ventures Ltd., 126 U.S.P.Q.2d 1515, 1516 (N.D. Cal. 2018).
42. Id.
43. Id.
44. Id. Readers will note that the SABACC game also appeared in the Star Wars movie Solo: A Star Wars Story, released in May 2018, and the term has been used in licensed merchandise in the wake of that release.
45. Id. at 1517.
46. Id.
47. Id.
48. Id.
49. Id.
50. Id. at 1516–17.
51. Id. at 1517.
52. Id. at 1518.
53. Id.
54. Id.
55. Id.
56. Id. at 1518–19 (citing Warner Bros. v. Gay Toys, Inc., 658 F.2d 76, 78 (2d Cir. 1981); Viacom Int’l Inc. v. IJR Capital Invs., LLC, 242 F. Supp. 3d 563, 569 (S.D. Tex. 2017); DC Comics v. Kryptonite Corp., 336 F. Supp. 2d 324, 332, 335 (S.D.N.Y. 2004)).
57. Id. at 1519.
58. Id.
59. Id.
60. Id.
61. Id.
62. Id.
63. Id. at 1520.
64. Bill Donahue, Disney’s Lucasfilm Settles IP Fight Over “Star Wars” Game, Law360 (July 25, 2018), https://www.law360.com/articles/1067099/disney-s-lucasfilm-settles-ip-fight-over-star-wars-game.
65. In Boston Professional Hockey Association, Inc. v. Dallas Cap & Emblem Manufacturing, Inc., 510 F.2d 1004, 1010 (5th Cir. 1975), the Fifth Circuit held that Dallas Cap infringed Boston Hockey’s trademark by selling loose patches depicting the Boston Bruins’ logo, which could be sewn onto articles of apparel. The court rested its holding, in part, on the fact that buyers knew that “the source and origin of the trademark symbols were in [Boston Hockey].” Id. at 1012. Courts since have often criticized Boston Hockey for granting “an extraordinary extension of the protection heretofore afforded trademark owners.” Int’l Order of Job’s Daughters v. Lindeburg & Co., 633 F.2d 912, 919 (9th Cir. 1980). Even the Fifth Circuit, itself, has since rejected the “notion that a trademark is an owner’s ‘property’ to be protected irrespective of its role in the operation of our markets.” Ky. Fried Chicken Corp. v. Diversified Packaging Corp., 549 F.2d 368, 389 (5th Cir. 1977).