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The X Files

September 2023

No, it’s not quite what you think, and unfortunately not another case for Mulder and Scully.  Nor is it an article about Gen X or the American punk rock band X. As you may have guessed this is yet another article about the Twitter rebrand!

The sudden announcement came as quite a surprise to most people, although with Elon Musk at the helm, anything is now possible at Twitter….oops sorry X. But for those of you who missed out here is a very short recap:

On 23 July Twitter was quite suddenly rebranded to “X” seemingly overnight. Shortly thereafter even the headquarters of the social media platform was now receiving a facelift as workers moved in to remove the iconic Twitter logo from the outside signage.

It was reported by Forbes that the rebrand wiped out an estimated $4 billion worth of brand value once associated with “TWITTER”, over and above the plunge in value since Musk’s takeover.

It is unclear how long Elon Musk had been considering the rebrand to “X”. What we do know is that Elon Musk has owned the X.COM domain since 2017 after buying it from his former employer, PayPal and he is reported as previously stating that buying Twitter was “an accelerant to creating X, the everything app”.  ICANN WHOIS shows that the X.COM domain name was updated on 24th July and Wayback Machine confirms that from this date the domain name was redirected to twitter.com. It is likely that the domain name was merely parked waiting for the right moment and/or opportunity since its purchase in 2017.  Wayback Machine does not shed much light as to the status of the domain name over this period.

Reviewing the USPTO records we can see that some Twitter, Inc. registrations were the subject of a recordal of merger with and into X Corp. as early as 15 March 2023, so perhaps the rebrand has been on the horizon for a lot longer than it appeared on the outside.

It would be interesting to know how much involvement Elon’s legal team had and whether they had the capacity (with everything else blowing up around them) to inform their trade mark colleagues what was about to happen. As of today’s date, we have been unable to locate any pending trade mark applications for the “X” logo in the name of Twitter, Inc. or X Corp. but that could just be a delay at the USPTO end or maybe the sign of something else…

Under normal circumstances a trade mark team and/or outside counsel would have a few months (or likely longer) to prepare for a rebrand of this scale. Giving everyone ample opportunity to sift through the landscape potentially pre-empting any obstacles or potential pitfalls along the road ahead. The social media platform operates in over 200 countries. That is a monumental and costly clearance undertaking. Not to mention the unregistered rights holders who might pop out of the woodwork, obviously only where unregistered rights are recognised under local laws.

You do not have to have a wild imagination to guess the vast number of “X” brands and/or trade marks already existing out there (you should Google it!). Elon Musk already has experience in this field with his Space Exploration Technologies Corp. (i.e. SpaceX) which owns a number of “X” logo registrations around the world. It is also worth bearing in mind that Elon Musk wants “X” to be somewhat like WeChat, so it is not simply a case for the legal team to clear current classes of interest but also looking to the future.

There are already over 250 Xs registered at the EUIPO and over 34,000 at the USPTO. Some of the entities that own such rights include those known to have fairly robust trade mark enforcement policies, including Metallica, Microsoft, and Adidas.

The rebrand!

So, unconventionally for a large multibillion-dollar company, the new corporate “X” logo was crowdsourced via Twitter, as it was then known. We can only presume, from a legal point of view that X Corp. now owns the copyright and that a suitable agreement was entered into with the designer and/or a suitable licence agreement has been agreed. It seems obvious, but this is a major pitfall for many small and/or startup businesses that fail to secure ownership of their company logos at their inception. This can cause serious issues later on if not addressed at the time.

We already know that Elon Musk has quite an affinity with the single letter “X” and to him it may hold more meaning than the average person. From a trade mark perspective, although trade marks containing a single letter can arguably be inherently distinctive, it can be incredibly difficult to enforce such rights, as was the case in the EU General Court decision “K WATER” (Case T-610/21). Nevertheless, given the media frenzy around “X” and the sheer number of global users, there is an argument that “X” would have acquired enhanced distinctiveness.

The main obstacles now facing the X Corp. legal team will be (1) running clearance searches and (2) ensuring trade marks are registered in key jurisdictions.  This all sounds simple enough, but it is clear that the legal team is going to be quite busy over the next few months (possibly years…).  If we look at the Facebook, Inc. rebrand from 2021 we would presume that the strategy was slightly more corporate and legally involved than X Corp. but even at today’s date, Meta are still facing trade mark battles in the courts over “Meta”.

On the flip side, the inherent weakness of a single letter, together with dilution in the marketplace with numerous entities owning rights in an X, the rebrand could work in Musk’s favour. Although we look forward to seeing who is the first to formally challenge his position (and his pockets).

Whilst the legal position is not certain, the rebrand has certainly given X a lot of publicity, and we all know there is no such thing as bad publicity.

Rebranding Rollercoaster

Rebranding can rejuvenate a brand and bring it into the modern era, including creating appeal amongst a broader customer base, but this is no dropping the ‘Donuts’ from DUNKIN DONUTS or a logo refresh. There are not many complete rebrands on this scale, especially when you look at the Retail sector or FMCG brands. The most famous is probably the American clothing company GAP, who refreshed their brand in 2010, only to revert to the old logo after six days. The closest example is probably the Royal Mail consolidation of its delivery and logistic services, rebranding to CONSIGNIA. The name lasted less than two years; not only did they fail to conquer foreign markets, but the brand loyalty customers had to ‘Royal Mail’ and British heritage had not been properly considered.

There are lessons to be learnt from seemingly rash decision making and only time will tell what troubles X face on the long road ahead. Brands should not underestimate the consumer’s emotional bond with the brand, especially when you look at retailer brands.

We also could not mention rebrands without noting the unfortunate “modernisation” of a Hershey kiss….:

The closest in the tech sphere is that of the Facebook/Meta name rebrand. But from a consumer perspective, it is still “Facebook” with the known interface, likes, posts and groups.  To consumers, it is likely more palatable than a full overnight rebrand.   Some may also recall that NETFLIX considered dividing the (then) DVD-mailing service and its online content streaming service, with the streaming service to be known as QWIKSTER.  The concept was not popular with customers and it was decided to leave all under the NETFLIX banner.

Refreshes and updates are commonplace; make brands look more modern and in line with brand values and customers.    They can be steep learning curves, and often will be divisive amongst the consumer base.  We shall have to wait and see how X prevails.

 


This article was prepared by Trainee Trade Mark Attorney Gregory Combrinck

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