A company’s branding and rebranding decisions are its prerogative, however, such moves carry legal risks that must be carefully considered. Twitter’s recent rebranding to “X” is an interesting one from a legal standpoint.
The Vision
Rebranding from “Twitter” to “X” may seem like a simple change of name on the surface, but the move likely signifies Elon Musk’s grander ambitions for the platform under his leadership.
Musk has voiced his vision for Twitter to become an “everything app”— a digital hub integrating multiple services and functionalities beyond its original focus on microblogging and social networking. Potential directions for “X” mentioned by Musk include:
- Facilitating financial transactions. Musk has talked about enabling direct consumer payments and transactions through “X”, turning the platform into a virtual marketplace. However, this would raise significant regulatory hurdles with financial authorities and require extensive compliance measures.
- Integrating messaging and communication tools. Incorporating features like direct messaging, voice and video calling could make “X” a more full-service communication channel. But this risks alienating Twitter’s core audience of casual users.
- Expanding into commerce and e-commerce. Musk hopes “X” can facilitate the sale of physical goods and services, though this venture would place the platform in competition with titans like Amazon and Alibaba.
- Becoming an “everything app” akin to WeChat. Musk has cited the Chinese super app as an inspiration, though replicating its all-encompassing ecosystem may be a lofty goal even for “X”.
Building an “everything app” of the scale he envisions would be an extraordinarily complex undertaking — both technically and from a product, legal, and regulatory standpoint. The rebrand to “X” may be just the first step in signalling this much broader transition, but a great deal of strategic clarity, focus and execution will be required to realize Musk’s vision.
Potential Legal Challenges
Foremost, is the fact that other technology companies already have products and services using the “X” brand. Twitter could potentially face trademark infringement lawsuits from these competitors if there is a perceived encroachment on brand equity, market overlap and consumer confusion between the brands. Courts weigh factors like brand similarity, product similarity, and actual consumer confusion in such cases.
For example, there is Apple’s iPhone X, which was released in 2017. The “X” in iPhone X stands for “ten,” as the device was released in honour of the tenth anniversary of the iPhone. Apple has a trademark on the “iPhone” name and logo, as well as the individual names of its various models, including the iPhone X. If Twitter’s use of the “X” branding is too similar to Apple’s, it could potentially be seen as infringing on Apple’s trademark rights. This could result in legal action against Twitter, which could in turn harm the company’s reputation and finances.
There are other companies that have products or services with the “X” branding, such as Microsoft’s Xbox gaming console and Google’s Project X, a research division within the company. Meta-formerly-Facebook has a federal trademark, which it registered in 2019, for a blue-and-white letter “X” — and it’s directly related to “social networking services. While it’s possible that Twitter’s use of the “X” branding won’t be seen as infringing on any of these companies’ trademarks, it’s also possible that it could result in legal challenges.
In order to mitigate these risks, Twitter will need to make sure that its use of the “X” branding is distinct enough from other companies’ use of the same brand. This could involve tweaking the design of the logo or using the letter “X” in a clearly distinctive way.
Final Thoughts
Trademark law seeks to prevent one brand from “free riding” off the goodwill and reputation of another established brand. With Norebase, you can trademark your business and protect your brand identity for as low as $230.
Twitter’s global brand recognition may give its new “X” brand an advantage, but that does not preclude valid legal claims from competitors who feel their brands are being diluted or infringed.
Twitter will also need to clear the “X” brand with trademark offices around the world as it expands the rebrand internationally. Other entities may have existing “X” trademarks for relevant product categories that could block Twitter’s applications. This is another legal hurdle to navigate that could force a second rebrand if not properly addressed.
While rebrands can be successful marketing strategies, they do create potential legal risks around trademark infringement, dilution and registration that companies must carefully evaluate and mitigate. For a brand of Twitter’s size and global scope, those risks are even higher. A well-planned and legally-vetted rebranding process is critical to avoid costly setbacks down the road. For Musk’s sake, let’s hope he doesn’t lose the legal battles and have to roll back the “X” rebrand just like he had to take down the “X” logo from X’s San Francisco HQ.
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