Having just rebranded this month, Block, formerly known as Square, is in hot soup as it faces a lawsuit from a tax-prep firm named H&R Block.
Those prominent in the crypto space found the rebranded title for Square’s company to be amusing and were quite apt to suggest it’d be but a matter of time before the company would face an issue with it. True enough, turns out it was all but inevitable, as H&R Block’s filing is on the basis of infringement.
The H&R Block President and CEO Jeff Jones said “Today’s filing is an important effort to prevent consumer confusion and ensure a competitor cannot leverage the reputation and trust we have built over more than six decades.” The lawsuit filing occurred in the Western District of Missouri’s U.S. District Court.
The complaint details the fact that the company’s names and logos are way too similar to each other, which will lead to the clients being liable to confuse the two firms, now. The complaint criticizes their decision to rebrand, by stating that instead of focusing on “generating its own brand equity,” that Block’s “taking a shortcut to capitalize on the well-known block moniker.”
To make matters worse for the company, H&R Block noted that “numerous indications” have already indeed pointed to the confusion that was insinuated in the complaint.
Square’s decision to make a change like this stemmed from their desire to focus on all things blockchain technology and wanted their company title to reflect that hence settling on the name Block, which seems logical considering the firm is a payments company.
Jack Dorsey, who has since stepped down from his role at Twitter this month, serves as the CEO of Block. He’s also a pretty vocal advocate for Bitcoin. The company’s stock fell about 6% during the time the rebrand occurred.
H&R Block isn’t really a major player in the crypto space and hasn’t particularly shown any interest in the blockchain/crypto space either. But, in Block’s case, they have, as they expressed their desire to enter the tax-prep arena. In November 2020, Cash App announced the $50 million-dollar acquisition of Credit Karma’s tax division. Cash App is under the Block umbrella, and also allows people to buy and sell cryptocurrencies like Bitcoin with relative ease.
H&R Block stated it “is now under attack by a Silicon Valley fintech company.”
As of now, Block has yet to publicly respond to the lawsuit.