Wait for Plankton to come down and land in front of you. Then, use Spongebob to make Bubble Bombs and throw them at Plankton when he is standing up and you can see his belly. This will knock him down for a little while so you can hit and weaken him. Repeat these steps until he is defeated.

When you first start, Plankton will drop down. Then, use either Timmy's or Danny's best attack until he jumps to the top get some energy and health orbs. Then, switch to SpongeBob. Before Plankton jumps down again use a Bubble Bomb on the shadow. That is where he will drop. He will inject it and cause him to flip over. Then, attack him. Get the health and energy orbs as invisible Danny. Continue doing this until Plankton is defeated. Note: After damaging him severely, he will start shooting an energy beam which will hurt you. If you watch where he goes you can easily avoid it.