The recent rebranding of Twitter to X has jolted users of the social media platform and the public generally. The move has been met with mixed reactions, with some praising the change as a bold new direction for the company and others criticizing it as a risky and unnecessary gamble.
From an intellectual property protection perspective, the change is puzzling both because of what Elon Musk gives up by abandoning the Twitter trademark and because of the costs and legal challenges he is inviting by changing to an arguably weaker trademark.
Twitter is a rare company to have developed such significant brand recognition and intellectual property protection across the globe. How many other brands have had their services become verbs? The company’s cost in time and fees to file for trademark registrations cannot be understated, not to mention the years of working to grow users in all corners of the world. These dollars and years of investment in the brand make the Twitter trademarks extremely valuable.
Now, the company has become even more unusual by taking the unprecedented action of suddenly abandoning its primary trademarks. Analysts suggest that between $4 billion and $20 billion in value could be lost by ceasing to use the Twitter trademark as seen on Time.com.
Elon Musk’s motivation to make the change may not be fully known but ostensibly includes his personal affinity for the term X (i.e., SpaceX, his child named “X Æ A-12,” and his former payments company X.com). The company has also stated that the rebrand opens the opportunity to expand to other goods and services that may not have fit as naturally under the Twitter trademark. Chief Executive Officer Linda Yaccarino has explained that the company has ambitions to be a global hub for “audio, video, messaging, [and] payments/banking.”
Obtaining global trademark registrations and brand recognition for X is not going to be easy. The company is unlikely to be able to obtain protections in each country for all the new goods and services to be provided. The company is likely to face lawsuits from legitimate and opportunistic plaintiffs. Moreover, with a less distinctive mark than “Twitter,” enforcing trademark infringement is going to be very challenging—particularly internationally.
As the rebranding from Twitter to X unfolds, it will likely include:
- Numerous lawsuits initiated by X to obtain trademark rights globally
- Numerous infringement lawsuits filed against X by plaintiffs who claim to own X already
- Potentially hundreds of new US and international trademark filings
- Tens of millions (if not hundreds of millions) of dollars in fees and settlement costs associated with the trademark filings and suits
The US headlines are likely to dominate in the coming weeks and months, but the international events will be just as important to X’s brand and intellectual property protection strategies.
If Elon Musk had been willing to stick with the Twitter trademarks, he would have been able to retain the value of the Twitter marks for the existing business and would have been far more likely to obtain trademark registrations for the expanded goods and services. Instead, he and the company face years of major legal and financial headaches.
You may not have a company as unique as Twitter/X, but this rebranding saga still has important lessons for small businesses.
- Know the value that is accumulated through strategic trademark filings – both in the US and internationally
- Research other uses of a mark you intend to use before implementing it
- Some trademarks are stronger than others
- Rebranding to weak trademarks or to trademarks that have not been vetted can backfile and result in unwanted legal costs and conflicts
- Know the value of brand recognition and customer loyalty. Who will you potentially alienate with a rebrand?
Overall, the Twitter rebrand to X is a risky move that could have major legal and financial implications. It is a reminder that your intellectual property is one of your most important assets. For more information on how to protect your trademarks and brands, please contact Ritchie Taylor, Carlie Smith, or John Kellam at Manning Fulton.