Elon Musk's Brand Protection Venture With "X"
Elon Musk is no fool. Whether you love him or hate him, he is undoubtedly good at business. That’s why the recent story about the rebrand from Twitter,Inc. to X has me a bit confused. Could you imagine The Coca-Cola Company stopping its use of the color red, or the iconic shape of its bottle? Could you imagine The Walt Disney Company telling Mickey to take a hike? These acts would be similar to what Elon has done. Now he is embarking on the journey towards brand protection for X. It won’t be an easy one.
The Twitter brand has many things going for it. From a legal perspective, it has a portfolio of international registrations plus many suits and settlements showing it has actively enforced its rights. From the marketing vantage, the
brand is widely recognized and well-regarded. These lead to the financial valuation of the brand, which has been placed at over four billion dollars. I don’t think I’ll ever be able to explain why he did this. I’ve read articles suggesting that he wants to have a consistent X branding on his business interests. However, $4,000,000,000 seems like a lot to give up for a want. Maybe time will show that I’m wrong.
Building Legal Rights in The X Brand
Twitter, Inc. actually merged into X Corp. in March. This means that the rights in the “Twitter” brand are now owned by X Corp. While this merger did not get much press in the Spring, the announcement that the social media platform would drop the iconic name “Twitter” in favor of X has made massive news.
According to records in the US Patent and Trademark Office (USPTO), Twitter, Inc. started using its “Twitter” brand in 2006 and filed the first application to register its rights in that brand in 2008. The initial application covered three classes of services. Since that first application was filed, many additional applications containing the word “Twitter” were filed. These newer applications include “Twitter” along with five other branding elements (e.g., “Twitter Flight”) and/or included eight additional classes of goods or services (For more on Classification See This Blog Post.)You’ll see a similar story when you look at the iconic Twitter Bird Mascot.
X Corp wants to replace the Twitter brand with X and the bird logo a stylized X design. However, X Corp won’t be able to “own X” as many people point out. Only famous brands are “owned.” For example, Coca Cola has broad rights in Coca Cola, while Delta has more narrow rights in Delta. Although X Corp will lose its “famous brand” status, it could gain rights in X similar to those Delta holds in Delta.
X Corp will likely file new applications for both brands, plus the five sub brands in a combination of eleven classes. This math ((2+5) x 11) could mean that an additional 70+ applications will be filed. A conservative estimate in getting this many ordinary applications through to registration is between $200,000 and $250,000.
The Cost of Protecting “X”
X Corp’s applications will not be ordinary. Many parties own rights in brands that include X. Accordingly, X Corp will be forced to cancel the rights of some parties, while also fighting a plethora of inbound oppositions against their applications. Coinciding with this will be many negotiations leading to settlement agreements. Many of these actions can cost $250,000 as a standalone item. A reasonable estimate to move through the registration process would be $25-40 million.
The numbers I provided are just for the US. A brief search revealed that Twitter has registered rights in at least 35 countries. I imagine some of the settlements I referred to above would cover multiple jurisdictions, but I could easily see a global cost to pursue trademark registrations in the US and several dozen other countries costing $1 billion and taking over a decade.
While $1 billion may be pocket change for X Corp, these numbers are only looking at obtaining registrations. Complete Brand protection for X will be quite a feat. In another blog post (link) I will talk about the costs related to their use of the X and stylized X design brands. Want to know more about Elon Musk’s complicated situation with X? See my next blog post.