Houston SpongeBob SquarePants restaurant operators owe $6 million to Paramount

Owners of “The Rusty Krab” were accused of improperly using names and images from the popular cartoon.

Paramount Global

The owners of a defunct Houston SpongeBob SquarePants pop-up restaurant owe media giant Paramount $6 million in damages, a judge ruled.

Paramount said The Rusty Krab illegally used the popular cartoon series' name, characters and images.

ViacomCBS, now known as Paramount Global, filed an intellectual property suit against Pixi Universal, which operated the now-closed restaurant. The Rusty Krab was inspired by the television show and the establishment where SpongeBob SquarePants works, The Krusty Krab.

Viacom's original complaint in 2021 noted that the restaurant featured illustrations from the show and people dressed up as its characters in the restaurant, which it claimed was an intentional attempt to capitalize on SpongeBob's success. SpongeBob SquarePants, which debuted in 1999, is the media company's most widely distributed property.

At the time, Pixi stated that The Rusty Krab was a "parody restaurant" and claimed they had no connection with the SpongeBob brand.

"Ever since Pop-Ups by PIXI started, we have clearly stated that we have no affiliation with the brands we are parodying," said Sanju Chand, Pixi Universal.

A judge ultimately wound up disagreeing with Pixi's claims.

Law 360 was the first to report that U.S District Judge Ewing Werlein Jr. ordered the payment of $6 million in copyright damages to Paramount, as well as the transfer of The Rusty Krab's domain names and to the company. The June 8 ruling also prohibits new parodies or "confusingly similar variation" of any other Viacom shows or characters. Chand is not personally liable for the amount, the judge said.

Pixi Universal is not expected to appeal the ruling.