The General Court of the European Union has ruled in case T‑211/20 Square, Inc. v EUIPO.
The US company Square, which recently has been rebranded as Block Inc., filed the following combined European trademark for class 36 – Electronic transfer of financial instruments for others:
The EUIPO refused to register this sign on absolute grounds – Articles 7(1)(b) and (c) of Regulation 2017/1001 on the basis that the sign: (i) lacked distinctive character; and/or (ii) was potentially descriptive of the goods applied for.
According to the Office, the target consumers consist of professionalists (financial experts) and non-professional public (ordinary consumers), who are observant and discerning.
Taking into account the mark’s elements and the word part CASH APP, the Office concluded that consumers would perceive it as an application for transfer of money, that is to say, a sign that describes the service that is used for.
The decision was appealed. According to Square, the EUIPO made significant errors when assessing the sign applied for in relation to the service in class 36. Another point for the appeal was the fact that not every European knows English as a language. In addition, the same mark was successfully registered in the UK.
The Court dismissed the appeal in its entirety. According to the Court, the EUIPO assessment of the sign was correct and the sign is not distinctive in order to be a trademark.
The Court reminded that it is enough for the sign to be descriptive only in one language in the EU in order to be refused on that ground.
The fact that the same sign was registered in the UK was irrelevant because the EU legislation is independent especially in the light of Brexit.
The case is interesting when it comes to brand building strategy of different companies around the world. In this case, Square is one of the biggest fintech companies in the US but nevertheless, they preferred to select a name for their app that is quite ordinary and generic. Many other companies used similar descriptions for their services too. So the use of such names is not efficient when it comes to marketing purposes and trademark protection because such signs are just not distinctive enough. Of course, this can be changed if the sign acquires a secondary meaning which, however, will require more time and investment.