When is Rebranding a $4 Billion Mistake? Time Will Tell With Twitter’s Decline | Dorsey & Whitney LLP
The small blue bird adorning nearly every company’s social media section. The verbiage “tweet” and “retweet” working their way into the fabric of modern language. The creation of character-limited, short-form posts as a new method of communication used by presidents, dignitaries, celebrities, and everyday people alike. Even with the ubiquitous rise of social media over the last few decades, it is difficult to find a company and brand that has had more of an impact on society as a whole than Twitter.
Its roots date back to 2006 when a group of friends and coworkers conjured a new version of sending text messages. Instead of the one-to-one nature of text messages, Twitter allows people to share thoughts, ideas, and messages with larger groups of people all at once via the Internet. On July 15, 2006, this idea—originally called “twttr,” but soon after expanded to “Twitter”—was released to the public, and transmitted roughly 20,000 posts, or the now infamous “tweets”, per day. When Twitter was showcased at the South by Southwest Interactive Conference in 2007, up to 60,000 tweets were posted each day. By early 2010, a short four years after its public launch, Twitter was up to 50 million tweets per day.
Not only did Twitter revolutionize a new way of communication, but it gave new meaning to otherwise standard, infrequently used symbols. The pound symbol, #, has long been used in information technology systems to denote specific pieces of text—used after a number to denote “weight,” or used in front of a number to denote “number.” Twitter gave this symbol new meaning, redefining it as the “hashtag,” a systematic way of categorizing groups of information, wherein users can find specific content relevant to the mentioned hashtag. In 2014, the word “hashtag” was added to the Oxford English Dictionary, meaning “a word or phrase with the symbol # in front of it, used on social media websites and apps so that you can search for all messages with the same subject.” In addition, Twitter user handles, used to identify the account owner, begin with the @ symbol, which has now expanded into a common form of electronic speech to direct attention at a specific person, whether on Twitter or elsewhere. This is similar to the @ symbol as it was first introduced in 1972 as part of the first electronic message communication—now known as email—to indicate the location or institution of the email recipient.
In nearly twenty years, Twitter has changed how humans communicate, whether they use the social media service or not. And it is difficult to quantify this level of impact on society as a whole. Most small business owners and entrepreneurs may start their companies with the lofty goal of someday owning a regionally, or even nationally, successful and recognized brand. But the vast majority of these new companies never reach global status, and never reach a billion-dollar valuation. Twitter did.
By 2023, Twitter reached 500 million tweets per day and a market cap valuation of over $40 billion. Valuation experts value just the Twitter brand—not the company itself, but the TWITTER trademark, the TWEET and RETWEET marks, and the blue bird—anywhere from $4 billion to $20 billion. Most companies in the world will never achieve a trademark brand valuation anywhere near this number, and it is, without a doubt, an impressive feat.
Which is why, in July 2023, Twitter users, social media and tech companies, the trademark and branding worlds, and the consuming public in general were shocked to learn that new ownership had decided to rebrand away from this $20 billion asset to something arguably far less distinctive, and, as many trademark experts note, possibly generic: the letter “X.”
While curious to many, this rebranding to the X mark may be part of a larger branding scheme. The same ownership of X Corp. (formerly Twitter) owns Space Exploration Technologies, or “SpaceX,” an astronautics company founded in 2002. In July 2023, ownership founded xAI, an artificial intelligence company with the ultimate goal of “understand[ing] the true nature of the universe.” To date, xAI does not appear to have rendered any services, but has filed trademark applications for a stylized design of the xAI mark covering artificial intelligence-based computer services. Even the new Twitter domain name—x.com—is a nod to the old online bank that eventually became PayPal, founded by the same owner as these X-based companies.
Shortly after the rebranding announcement, the little blue bird and TWITTER trademark disappeared from the website and app, replaced with a slightly stylized letter X. Twitter’s renamed parent company, X Corp., filed a slew of trademark applications on September 22, 2023, all for the standard character X mark, covering a range of services in Classes 38, 41, and 42, among others, including U.S. Serial No. 98/193,533 for “Hosting an online website community for registered users to share information, photos, audio and video content and to form virtual communities; Providing user authentication services in e-commerce transactions” in Class 45. The current pace of examination at the USPTO means the applications will most likely not be reviewed until late spring 2024, but it is probable they will face hurdles to registration. The USPTO’s registry is replete with X-formative marks covering arguably similar services, including registrations owned by Comcast Corporation and Microsoft. While most of the existing registrations incorporate a design element, a standard character mark, like the one filed by X Corp. is likely to face objections based on prior rights.
Even if X Corp. were to refile new applications with the stylized version of its X mark, some experts believe that current stylization used by the company may not be sufficiently distinct. Further, mathematical scholars have noted the X mark looks strikingly similar to a generic Unicode character used in the international computing standard to denote an abstract geometric space or object. The mark is also identical to the lowercase X in the Monotype Special Alphabets 4 font set. As applied to computer programming, this could make the X mark generic, and under the Lanham Act, “generic terms are never eligible for trademark protection because they refer to a general class of products rather than indicating a unique source.” If found to be generic, not only will it be impossible for X Corp. to register its stylized X, but it won’t have any trademark protection at all, for at least some services.
Meanwhile, numerous new applications for the word mark TWITTER were filed in July 2023 by applicants seeking to seize upon the apparent abandonment of the TWITTER trademark. Many of these new applications (filed by individuals) cover similar computer-based goods and services included in the existing TWITTER registrations. Although these new applications are also unlikely to succeed and will be refused based on the existing TWITTER registrations, these individuals may be laying the groundwork for a cancellation action based on an intent not to resume use, all in an effort to stake a claim to this $20 billion brand. While any use of the TWITTER brand by a third party could, in all likelihood, be stopped based on a claim to residual goodwill, these efforts by third parties reflect the land grab created X Corp.’s decision.
The fate of the famous TWITTER brand and its high-profile rebrand to X will keep USPTO examiners busy for some time. Even federal courts will see some action. On October 2, 2023, X Corp. was sued by a social media and marketing company called X Social Media alleging trademark infringement and violations of Florida state law, including common law unfair competition and unfair trade practices, based on X Social Media’s alleged prior use of the X SOCIALMEDIA mark since 2016.
Whatever the outcome—whether X Corp. is able to ever achieve a federal registration for its X mark, or who becomes the successor to TWITTER trademark ownership—many will continue to question the motivation to rebrand away from such a famous, globally recognized, and arguably historic brand.
