The process of Twitter’s rebranding to X is currently in full swing. The company’s name and iconic bird logo have been stripped from their San Francisco headquarters, and the blue bird on top of twitter.com has been replaced with an “X.” However, this rebranding may present significant legal and financial challenges for the company, which has already been struggling due to a significant decrease in ad revenue after an exodus of advertisers. One major hurdle is the fact that there are numerous companies, including Microsoft and Meta, that hold trademarks for variations of the letter “X.” This opens up the possibility of lawsuits and other legal complications for Elon Musk and his rebranded company.
According to Shubha Ghosh, a law professor at Syracuse University, lawsuits are common in situations where major companies undergo rebranding and change their names and logos. He goes on to express surprise at Musk’s choice of the letter “X,” as it is not particularly distinctive and may invite legal action. In fact, trademark attorney Josh Gerben has identified almost 900 companies that possess trademarks associated with the letter “X.” While not all of them will have legitimate claims against the company formerly known as Twitter, the abundance of trademarks makes it an easy target for legal disputes.
Gerben predicts with near certainty that Twitter/X will face lawsuits from opportunistic and legitimate plaintiffs over the new name. He estimates that the company could potentially spend tens of millions, if not over $100 million, on legal fees and settlement costs while attempting to secure trademark registrations for the letter “X” and dealing with the litigation that is likely to arise from the rebranding.
Besides legal challenges, Twitter’s new X branding may encounter difficulties in its defense, particularly on an international scale. Gerben points out that Elon Musk’s chances of successfully registering a trademark for the letter “X” across all the services he intends to provide in every desired country are very low.
Even if Twitter manages to overcome legal obstacles, there are substantial business risks associated with abandoning a brand as globally recognizable as Twitter’s. Bloomberg reports that analysts have estimated the name change could potentially erase billions of dollars in brand value, further damaging a brand already impacted by Musk.
Ari Lightman, a professor of digital media marketing at Carnegie Mellon University, believes that Twitter’s problems go beyond potential legal complications caused by the rebranding. He emphasizes that there are other factors decreasing the value, utility, and uniqueness of Twitter, now X, in the digital space. Lightman points to the emergence of Threads and other competitors as significant challenges, highlighting the difficulty of reshaping the concept of microblogging that has become synonymous with Twitter among the global population.
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