Twitter’s rebrand to X could worsen its legal and financial problems
Twitter’s rebrand to X is well underway. The name and iconic bird logo have been (mostly) stripped from the company’s San Francisco headquarters, and an “X” has replaced the blue bird atop twitter.com. Elon Musk has said the change is about more than just the name. He wants to turn the service formerly known as Twitter into an “everything app” that also encompasses banking and financial services.
But the rebrand could pose significant legal and financial challenges to the company, which has struggled since an advertiser exodus cut the company’s ad revenue by more than 50 percent. To start, there are hundreds of companies, including Microsoft and Meta, that own trademarks for variations of “X.” That could open the door to lawsuits and other legal headaches for Musk.
Shubha Ghosh, a law professor at Syracuse University, says that lawsuits are “quite common” when major companies rebrand and change their names and logos. “I’m kind of surprised he picked X because it’s not that distinctive,” he says. “It’s problematic in the sense that it’s not something you can just suddenly do without anybody noticing and possibly suing.”
Trademark attorney Josh Gerben told Reuters that he counted almost 900 other companies with trademarks on “X.” And while not all of them will be able to credibly claim that the company formerly known as Twitter is interfering with their brand, it makes X an easy target.
“There is about a 100% probability that Twitter/X will be sued by both opportunistic and legitimate plaintiffs over the new name,” Gerben tweeted. “The company could easily spend tens of millions (if not $100+ million) in legal fees and settlement costs attempting to acquire trademark registrations for ‘X’ and in dealing with the litigation that is likely to result from the rebrand.”
For the same reasons, Twitter’s new X branding could also prove difficult to defend, especially internationally. “The chance that @elonmusk will be able to successfully register a trademark for ‘X’ for all the services he intends to provide, in every country he wants to provide them in, is very low,” Gerben wrote.
Even if Twitter is able to fend off legal challenges, there are serious business risks to doing away with a brand as globally recognizable as Twitter’s. Bloomberg reported that some analysts have estimated the name change could wipe out billions of dollars in value from a brand that’s already been damaged by Musk.
Ari Lightman, a professor of digital media marketing at Carnegie Mellon University, says Twitter’s problems go far beyond potential legal headaches brought on by its rebrand. “There’s a lot going on that is diminishing the value, the utility, the uniqueness, that Twitter, now X, has in the space,” he says pointing to the rise of Threads and other Twitter competitors. “Tweets are synonymous with this idea of blogging, or microblogging, it’s going to be very difficult to resocialize a concept with the global population.”
Published at Tue, 25 Jul 2023 23:39:14 +0000
