Last week, the U.S. Court of Appeals for the Eighth Circuit issued an opinion in H&R Block, Inc. v. Block, Inc., No. 22-2075 (January 24, 2023), reversing the grant of a preliminary injunction.
H&R Block offers financial services, including tax preparation software and in-person tax preparation. It has a registered green square mark and common law rights in the term “Block.” Square, Inc. was a holding company offering financial products under various brands, including Cash App. Its tax service “Cash App Taxes” is integrated into the Cash App platform. Cash App’s name and logo—a dollar sign within a green rounded-edge square—are federally registered trademarks. Square, Inc. changed its name to Block, Inc. in December 2021, and the company filed an application to register “Block” for certain holding company services. Shortly after the name change was announced, H&R Block sued for trademark infringement and subsequently moved for a preliminary injunction. The district court granted the motion. Block, Inc. appealed.
A majority of the Eighth Circuit panel reversed. The Court reviewed the district court’s ruling under an abuse of discretion standard. Addressing the probability of success on the merits, the Court evaluated each of the SquirtCo factors relevant to likelihood of confusion. The Court held that the district court clearly erred in finding that the “similarity of the marks” factor “strongly” favored H&R Block. Specifically, observable differences in the green square marks, differing means of accessing the products, and Cash App’s limited use of the term “Block” undermined the district court’s finding. The Court also held it was clearly erroneous for the district court to find in H&R Block’s favor on the “evidence of actual confusion” factor because H&R Block failed to present evidence of confusion by ordinary customers and because the social media posts presented, discussing potential for confusion, were split. On balance, the Court held it was “clear error to find a likelihood of confusion from the thin evidence here.” The Court further held that absent a showing of likelihood of confusion, H&R Block was not entitled to a presumption of irreparable harm and the record contained insufficient evidence demonstrating irreparable harm. The Court further held that the balance of the equities did not favor an injunction. Accordingly, the Court reversed and vacated the preliminary injunction.
Judge Melloy, writing separately in dissent, emphasized the high hurdle associated with a finding of clear error and would have affirmed.