The bug is a character who only appears in the episode "Company Picnic."
It is a centipede-like creature with a red body that has some bulges with hair on it. It has yellow stripes, two green eyes with red pupils, and nine olive green legs. It also leaks green translucent slime and holds the tip of a pen with its olive green mandibles.
Plankton used holograms to make this bug look like a pen, but when SpongeBob turns them off, it is revealed to be a bug.