Financial technology company Block Inc. can continue using its name in connection with its tax preparation services after a split Eighth Circuit reversed a trademark injunction won by
The ruling comes in a battle following Block Inc.'s 2021 “rebrand” from Square, offering guidance to practitioners seeking to secure early court orders blocking trademark use during legal disputes.
H&R Block was unable to show that Block Inc.'s name change would cause “substantial consumer confusion,” so an injunction at this early stage of the case isn’t warranted, Circuit Judge
“We are disappointed in the ruling and believe the dissenting judge was correct in his assessment of the appeal,” H&R Block said in a statement to Bloomberg Law. “We remain confident in the strength of our brand and trademark rights and are evaluating next steps.”
Block Inc., founded by former Twitter Inc. CEO
A federal district judge in Kansas City, Mo., granted H&R Block’s motion for an injunction in April, ruling that Block Inc. can’t communicate through advertising, press releases, or social media that it’s connected to Cash App Taxes.
The 67-year-old H&R Block was likely to succeed on its claims that Block Inc.'s new name would confuse consumers based on a six factor legal test, District Judge
Block Inc. appealed the order, telling a three-judge panel that forcing it to change its name again would cause irreparable damage.
The majority found that the lower court “committed clear error” in evaluating two of six different legal factors used to evaluate the likelihood that consumers would confuse the two brands. H&R Block failed to provide evidence that customers who used Cash App thought it was an H&R Block product, a factor known as “actual consumer confusion.”
The lower court also made in error in finding that the “similarity of the marks” factor weighed “strongly” in H&R Block’s favor. While there are visual similarities between the green H&R Block logo and the green Cash App icon, the “products are available through different means,” the opinion said.
Cash App is only available as a phone app, while H&R Block has in-person, online, and retail software services. Block Inc. argued that its name only appears in the terms of service agreement for Cash App Taxes, not as a publicly facing brand name.
The majority opinion said H&R Block may be able to win an infringement verdict at trial, but it failed to show that it would face irreparable harm without an injunction.
“H&R Block’s worry about potential negative publicity and loss of intangible assets, such as reputation and goodwill, is speculative and inadequate,” Erickson wrote. Judge
In his dissent, Melloy said the lower court’s opinion was “well-reasoned” and lacked any clear errors. Block Inc.'s social media posts and website connect its brand to Cash App Taxes, its employees publicize that they work for “Cash App at Block Inc.,” and media stories have connected the names, Melloy said.
Quinn Emanuel Urquhart & Sullivan LLP and Armstrong Teasdale LLP represent Block Inc. Debevoise & Plimplton LLP and Berkowitz Oliver LLP represent H&R Block.
The case is H&R Block Inc. v. Block Inc., 8th Cir., No. 22-2075, 1/24/23.
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