Square Inc. left feeling short-changed after General Court upholds EUIPO Cash App decision

The General Court affirms the EUIPO Board of Appeal’s decision that a mobile payment service’s figurative mark lacked distinctive character

13 December 2021

The General Court has affirmed the EUIPO Board of Appeal’s decision that a figurative mark pertaining to a mobile payment service lacked distinctive character, notwithstanding that its near-identical mark had been granted protection by the UKIPO.

Background

Square, Inc., a US company, sought to protect a figurative sign as an international registration designating the EU. The application was for goods in Class 9 including downloadable software for: ‘enabling the transfer of financial instruments’, ‘providing discounts on products and services’ and to ‘…enable transactions of value to be requested from or sent to others.’

In February 2019, the examiner refused protection pursuant to 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. Square Inc. appealed the decision to the EUIPO Board of Appeal (the ‘EUIPO’).

EUIPO decision

In its analysis of the figurative sign, the EUIPO determined that it consisted of four elements: (i) a square with rounded corners; (ii) the green colour of that square; (iii) the ‘$’ sign; and (vi) the expression ‘Cash App’. It took the view that the goods covered by the mark targeted both ‘average consumers’ and ‘specialised consumers’ in the finance industry, and that those consumers would be particularly observant and discerning. It also took the view that, as English is generally used in IT and finance, the ‘relevant public’ comprised consumers, both professional and non-professional, throughout the EU. Having examined each of its individual elements, the sign lacked distinctive character within the meaning of Article 7(1)(b). In particular, it would be perceived by the relevant public as indicating that the downloadable software made the receipt/transfer of cash possible, and not as an indication of the good’s commercial origin. The appeal was consequently dismissed.

General Court decision

Square Inc. subsequently applied to annul the EUIPO’s decision based on, inter alia, arguments relating to errors of procedure, infringement of Article 7(1)(b) and principles of equal treatment.

In relation to the former, Square Inc. alleged that the EUIPO had failed to carry out a ‘separate and independent examination’ of the 7(1)(b) and (c) grounds – it had assumed that the mark was descriptive and therefore lacked distinctive character. Whilst recognising that there was measure of overlap between the absolute grounds, the General Court agreed that each was independent, requiring a separate examination that must be interpreted in light of the general interest underlying it. However, as the EUIPO had concluded that the mark was not capable of distinguishing the origin of the goods, an independent analysis of 7(1)(b) was implicit in its decision.

In relation to Article 7(1)(b), Square Inc. argued that the EUIPO had:

  • failed to assess the distinctive character of the mark in relation to the goods concerned;
  • failed to back its definition of the ‘relevant public’ by evidence;
  • incorrectly assessed the distinctive character of the mark by focusing on its constituent components; and wrongly broadened the criteria for assessing the distinctive character in finding that the mark was capable of indicating the financial origin of the goods.

The General Court disagreed with all four grounds. In relation to argument (i), the EUIPO had listed the goods and expressly referred to their intended purpose, assessing the distinctive character of the mark by reference to the goods. As to (ii), the EUIPO’s finding that English was common in the financial sector was a sound one, and, in any event, it was sufficient for refusal of the mark that it be devoid of distinctive character for just the relevant English-speaking public. As to (iii), the EUIPO had first examined the mark’s individual elements but had then carried out an overall assessment of distinctive character. Its reasoning held that the relevant public would perceive the mark ‘as a whole’, indicating that the software made the transfer/receipt of cash possible as a result of a financial transaction. Finally, in relation (iv), the EUIPO had found that the sign was incapable of performing the essential function of a trade mark, namely that of identifying the commercial origin of the goods. Its reference to ‘financial origin’ was therefore incidental, since it held that the sign would be perceived as an indication that those goods are intended to be used to obtain a monetary advantage.

In relation to Square Inc.’s plea on equal treatment (the EUIPO had failed to take into account the UKIPO’s reasoning in relation to another, near-identical, registration by Square Inc.), the General Court emphasized the EU trade mark regime’s autonomy, which applies independently of national systems and by reference only to EU rules. The EUIPO was entitled to reach its own conclusions, notwithstanding decisions pertaining to national registrability.

The appeal was accordingly dismissed in its entirety.

Comment

The decision provides a useful overview of the various policy and legal considerations underlying the Article 7(1)(b) ground for refusal of registration. It also serves as a reminder that the registrability of EU trade marks must be assessed by reference only to EU rules, which, following the UK’s withdrawal from the EU, will no doubt continue to diverge from those of the UK as the two begin to develop their own distinctive, albeit related, jurisprudence in this field.

This article was written by Chloe Perea Poole and first appeared on WTR Weekly, part of World Trademark Review, in November 2021.

For more information or if you have any questions, please contact Emily Roberts or Chloe Perea Poole, or your usual IP team contact.

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