X, Twitter, Elon Musk, IP, Intellectual Property, Rebrand, Intellectual Property Law, Tesla, Meta, Mark Zuckerberg
By Richard Uyok
Mark Zuckerberg may be moving on from his rumored cage fight with Elon Musk, but the Tesla CEO may not yet be out of the woods. While we may never see the two billionaire tech bosses square off in an epic cage battle, an intellectual property brawl is clearly in the works, and this, in my opinion, would be a more exciting bout.
In the traditional business playbook, companies get to the top in their chosen field by creating something useful that addresses a particular problem; protect it with intellectual property (IP), and then make money on their exclusive rights to use that IP. Most companies still operate this way to date. To maintain dominance in their respective industries, the most successful businesses guide their IP fiercely.
Like many other companies, Tesla Motors had played the traditional IP game until they didn't. The company’s CEO, Elon Musk, indicated it would not contest infringement on most of its patents. Not challenging Tesla’s patent infringement meant the maverick electric car company was granting Open-source access to some parts of its software.
Did Elon Musk become an open-source evangelist, or was this another unconventional business strategy?
OPEN SOURCE EVANGELIST ELON?
Not quite! After years of trying and failing to capture Twitter’s audience with identical feature updates, Mark Zuckerberg launched a new app called ‘Threads’. The app, which is practically Meta’s clone of the Twitter app, launched to much success, just enough to leave the Tesla boss rattled.
On July 5, 2023, a letter was written to Mark Zuckerberg, “On behalf of X Corp., as successor in interest to Twitter, Inc.” The letter stated that Twitter has severe concerns about Meta’s ‘unlawful misappropriation’ of Twitter’s trade secrets and other intellectual property. As an aside, there's no such thing as ‘lawful misappropriation’ anyway.
While Tesla's approach may have fit into a more significant trend towards business development in the automobile industry where IP is shared rather than hoarded, it is a very different game in the social network service market. Unlike Tesla's niched dominance in the automobile industry with its electric cars, competition in the market in which Twitter operates is fiercer, which may explain why Elon Musk is more concerned about intellectual property now. Or is he?
X: AN IP MINEFIELD?
On the 23rd of July, 2023, Elon Musk teased a rebrand, doing away with the ‘Twitter’ name, the word ‘Tweet”, which has become synonymous with the app and the bird logo. He later confirmed that the new brand name would be X, and if he found a new logo, the rebrand would take effect the next day. Obviously, coming up with the X logo didn’t take much time, and nearly 24 hours later, the rebrand was well underway.
Like many of Elon Musk’s business decisions since his check cleared for the acquisition of the company, Linda Yaccarino, the Company’s CEO, has had to make business sense of them after the fact; she explained that this is about giving the company ‘’a second chance to make another big impression.” Perhaps in a similar move to what Facebook did with META.
With a lot of uncertainty about Twitter’s rebrand, the only thing we all know for a fact is that the brand recognition, which seemed to be the only thing Twitter had going for it lately, has now been x-ed out.
Like with Elon deciding to release most of Tesla’s patents years ago, this rebrand has also generated a lot of debate in the Intellectual property community. The community, in their initial reaction, has described this move as a branding faux pas, and for two main reasons:
Accumulated Customer Awareness and Brand Goodwill: Over the years, the Twitter name and bird logo have become synonymous with the platform and tweeting itself. The years of accumulated customer awareness and brand goodwill developed over the years would cost the company billions of dollars in brand value. While the existing brand users will still recognize and associate it with the old brand, the rights, and reputation of the Twitter branding will not automatically transfer to the new brand.
A Minefield Of Potential Legal Difficulties: X, as the new brand name, certainly opens the latest brand to a minefield of potential intellectual property struggles. From an intellectual property perspective, X just became a new player in a densely populated playground and might very well not be able to stake a substantial reputational claim to enjoy the rights and benefits enjoyed by the old brand. Many third parties have acquired rights in various X trademarks before the rebranding of the Twitter brand. Microsoft Corporation owns a 20-year-old trademark registration for the letter X concerning communications for its Xbox video game system. At the same time, Meta also holds stylized blue and white X designs for various internet-related services, including social networking and digital messaging. These are just examples of some of the biggest companies that operate in the same or similar space to Elon’s X, who already own trademarks to the letter X.
TRADEMARK REGISTRATION: The United States Patent and Trademark Office (USPTO) has overtime shown reluctance in granting trademarks for single letters; you are often required to file it in a stylized way and not in the regular block form. Further complicating X’s trademark registration is simply the sheer number of similar applications and registrations for the letter X. Based on this, it might be problematic for the company to obtain a registered trademark protection for the X brand, and potentially, even a barrier to continued brand usage.
INTELLECTUAL PROPERTY LICENSING: This could become an issue if third parties have commercial agreements with Twitter that entail using its logo or other Intellectual Property assets. I would think that the agreements would not automatically transfer these rights to the X brand, as such agreements would have been predicated on the value of the Twitter brand or the goodwill that comes with it. This is another example of a potential Intellectual challenge resulting from the rebrand.
When Elon Musk decided to release the Patents for his maverick electric car company, some traditionalists noted he was making a dangerous strategic error in giving competitors access to its intellectual property and predicted that the company would suffer as a result. The reverse was the case; the company stock went up. It climbed more than 10% over the next two weeks. As Musk puts it in an article published on the Tesla website, ‘’Our true competition is not the trickle of non-Tesla electric cars being produced, but rather the enormous flood of gasoline cars pouring out of the world's factories every day.’’
While he might have made a strategic business decision by handling Tesla’s IP rights, which got rewarded, the game is different this time. His competitors here do not belong to the automobile industry, which already incorporates a great deal of open-source software into their systems anyway; neither are they infinitesimal in the grand scheme of things.
Ultimately, all might not be doom and gloom following the rebrand of Twitter. While many Intellectual Property commentators are validly concerned following the rebrand, like with the Tesla move, the commercial reality might be different.
Parallels can be drawn here from Facebook’s rebrand to Meta, abandoning Trademark that has over-accumulated customer awareness and brand goodwill and adopting a new name and logo that seems commonplace, with numerous earlier rights containing or consisting of the word ‘’Meta” or similar elements. Besides the predicted pending cases, the rebrand has been successful for Meta from a branding perspective. It has consolidated its place in the playground sufficiently to continue using its name for now.
In a similar move to Meta, a robust Intellectual property strategy, effective negotiations, and the adoption of out-of-the-box solutions would help Twitter and Elon navigate the seemingly impending chaos.
The take-home lesson here for business owners would be to always conduct a trademark search before establishing a brand name or before carrying out any rebrand; also, not to be so in love with a brand name that it clouds your judgment and makes you ignore all of the potential troubles you might be getting your company or business into.
This saga also highlights why working closely with Intellectual Property attorneys is essential to devise effective and robust strategies to achieve your business objectives.
At the end of the predicted impending IP chaos, would Elon Musk prove to be the misunderstood genius once again or the bored, self-centered, reckless billionaire who would tweak Twitter’s algorithm just so his tweets rank higher than anyone else in the feeds? Only time will tell.