The Wooden clarinet is a musical instrument that was seen in the episode "Christmas Who?"
The wooden clarinet, as stated by Squidward, is a clarinet made out of driftwood that has his name on it. There is also a button on it, when pushed, shows three wooden Squidwards that play a tune (which is The Trepak).
Role in the episode
The wooden clarinet was given to Squidward by a depressed SpongeBob when he thought Squidward was going to be left out when Santa Claus came to Bikini Bottom. Squidward was touched by SpongeBob's gift despite the way he treated SpongeBob and decided to make up for him by portraying as Santa himself. This leads to Squidward giving away almost everything he owned in his house just to keep SpongeBob's morale up.
Squidward then receives a note from Santa and is shocked to see that he is real. Squidward then says that he is insane and goes back inside playing his new Wooden clarinet.