The Legal and Financial Implications of Twitter’s Rebrand to “X”

By: Haley Bernstein

History of Twitter

Twitter Co-founder, Jack Dorsey, sent the very first “tweet” on March 21, 2006. The tweet read, “just setting up my twttr.” While Twitter began as a side project stemming from a podcasting tool, the growth and impact of this social media platform went well beyond expectation. After going public in 2013, Twitter’s audience has expanded to over 200 million active users, including notable figures such as Oprah Winfrey and Barrack Obama. Now, 10 years later, Twitter has approximately 528.3 million monetizable monthly active users and is valued at $41.09 billion.

Twitter has been widely identified by its iconic blue bird logo. According to Jack Dorsey, Twitter’s name in fact stems from the sounds that birds make. Since the site initially only allowed 140-character tweets, status updates on Twitter were short bursts of information, akin to chirps from birds.

The Rise of “X”

In April 2022, Elon Musk, businessman and cofounder of Tesla and SpaceX, acquired Twitter for $44 billion dollars. Musk claimed his decision to own Twitter stemmed from his desire to “help humanity” improve free speech, citing Twitter as a “digital town square” in need of protection in order to maintain a functioning democracy. As one of Twitter’s largest shareholders, Musk already had significant stake in the company. Regardless of his true motives for the acquisition, and despite him trying to back out of the deal after the global markets tanked, the deal closed in October 2022.

Musk made immediate and dramatic changes to Twitter. He laid off over 6,000 Twitter employees within six months of the acquisition. He also introduced Twitter Blue, a paid subscription that allows subscribers to edit their messages after posting and provides paying users with a larger character limit and higher priority within the system’s algorithm. Additionally, Twitter removed its legacy verification system, originally implemented to verify public figures and those at heightened risk of impersonation.

Arguably, the most dramatic change Musk made was changing the universally-recognized name of Twitter to X. In July 2023, Musk wrote, “[a]nd soon we shall bid adieu to the Twitter brand and, gradually, all the birds” on his account. On July 23, 2023, Musk announced that X.com replaced Twitter.com, and an “X” logo went live later that day. The question thus remains: what are the implications of this major change?

Trademark Implications

         Trademarks are signs used to distinguish goods or services within the marketplace and help customers identify businesses. According to the World Intellectual Property Organization, trademark registration prevents third parties from “marketing identical or similar products or services under an identical or confusingly similar trademark.”

         Nearly 900 active U.S. companies have filed trademark registrations using the letter “X” in a wide range of industries. Global technology companies such as Meta and Microsoft already own intellectual property rights to the letter X. For instance, Microsoft has owned an “X” trademark for its Xbox video game system since 2003, and Meta registered for a trademark covering a blue-and-white letter “X” for their social media and software fields in 2019. Since “X” is so commonly cited in trademarks, companies, such as Meta and Microsoft, will likely accuse Twitter of trademark infringement. In fact, trademark attorney, Josh Gerben, stated that there is “about a 100% probability that Twitter/X will be sued by both opportunistic and legitimate plaintiffs over the new name.”  

According to the United States Patent and Trademark Office, to support a trademark claim, a company must demonstrate that (1) it owns a valid mark, (2) it obtained the rights to the mark first, and (3) the new mark is “likely to cause confusion in the minds of consumers about the source or sponsorship of the goods or services offered.” While no such claims have been filed against Musk’s company yet, the commercial popularity and commonality of the letter “X” and the indistinctness of the new black and white logo make it likely that companies will begin arguing that the new name and logo are likely to cause confusion within the marketplace.

Business and Financial Implications

Beyond facing trademark infringement issues, Twitter’s rebrand also poses significant financial challenges for the company. One significant problem with rebranding a widely recognized platform like Twitter is that it could ruin years of brand equity built by the company. In 2022, about 90% of Twitter’s revenue came from advertising, and most of its existing contracts were executed by Twitter, not by X. According to analysts and brand agencies, the rebrand has destroyed anywhere between $4 billion and $20 billion in value, which took Twitter over 15 years to earn.

Twitter is not the only Big Tech company that has attempted to rebrand. Facebook introduced its new identity as Meta in October 2021. However, Meta still kept Facebook as its “de facto social network” and did not completely alter its name or logo. Alternatively, Musk completely changed the entire identity of Twitter. The company’s “brand lexicon,” such as “tweets” and “retweets,” are intrinsically linked to the blue bird mascot and have no real connection to the letter “X.”

In conclusion, “tweeting” has become synonymous with blogging and sharing messages on the online platform now known as X. Twitter’s popularity has produced an entirely new sect of language that has become ingrained in modern culture. “X” will now require Twitter to “rebuild [its] cultural pull and linguistic consensus from scratch,” which already has and will continue to cause significant legal, financial and business challenges for the company.