Thursday, June 13, 2024

Twitter’s rebrand to X could worsen its legal and financial problems


Twitter’s rebrand to X is nicely underway. The identify and iconic hen brand have been stripped from the corporate’s San Francisco headquarters, and an “X” has changed the blue hen atop Elon Musk has stated the change is about extra than simply the identify. He desires to show the service previously often called Twitter into an that additionally encompasses and monetary companies.

However the rebrand might pose important authorized and monetary challenges to the corporate, which has struggled since an advertiser exodus minimize the corporate’s advert income by greater than 50 %. To start out, there are lots of of firms, together with Microsoft and Meta, that personal logos for variations of “X.” That would open the door to lawsuits and different authorized complications for Musk.

Shubha Ghosh, a regulation professor at Syracuse College, says that lawsuits are “fairly widespread” when main firms rebrand and alter their names and logos. “I am form of shocked he picked X as a result of it is not that particular,” he says. “It is problematic within the sense that it is not one thing you’ll be able to simply all of the sudden do with out anyone noticing and probably suing.”

Trademark legal professional Josh Gerben that he counted virtually 900 different firms with logos on “X.” And whereas not all of them will be capable to credibly declare that the corporate previously often called Twitter is interfering with their model, it makes X a simple goal.

“There’s a few 100% chance that Twitter/X might be sued by each opportunistic and legit plaintiffs over the brand new identify,” Gerben . “The corporate might simply spend tens of hundreds of thousands (if not $100+ million) in authorized charges and settlement prices making an attempt to accumulate trademark registrations for ‘X’ and in coping with the litigation that’s prone to end result from the rebrand.”

For a similar causes, Twitter’s new X branding might additionally show tough to defend, particularly internationally. “The possibility that @elonmusk will be capable to efficiently register a trademark for ‘X’ for all of the companies he intends to offer, in each nation he desires to offer them in, could be very low,” Gerben wrote.

Even when Twitter is ready to fend off authorized challenges, there are critical enterprise dangers to taking away a model as globally recognizable as Twitter’s. Bloomberg that some analysts have estimated the identify change might wipe out billions of {dollars} in worth from a model that’s already been broken by Musk.

Ari Lightman, a professor of digital media advertising and marketing at Carnegie Mellon College, says Twitter’s issues go far past potential authorized complications introduced on by its rebrand. “There’s lots occurring that’s diminishing the worth, the utility, the individuality, that Twitter, now X, has within the house,” he says pointing to the rise of Threads and different Twitter rivals. “Tweets are synonymous with this concept of running a blog, or microblogging, it may be very tough to resocialize an idea with the worldwide inhabitants.”

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