Elons Musk’s X: Avoiding Trademark Infringement

by Richard Rimer | Aug 18, 2023 | Infringement, Education

Elon Musk’s X: Avoiding Trademark Infringement

Twitter is rebranding to X. As mentioned in My Prior Post, it will cost up to $1 billion to get registration rights in the new X brands equivalent to those X Corp holds in the Twitter brands. We will be watching Elon Musk’s strategy for avoiding trademark infringement unfold for years to come. Now, I will discuss the risks related with using the new X brands. Trademark 101 states that you cannot use a brand that is likely to cause confusion with the relevant public. This is known as trademark infringement. Two main factors to consider are how similar are the brands and how related the underlying goods or services are. When a judge determines two brands are confusingly similar, the younger brand is forced to stop using its brand and pay

damages to the older brand. The damages are often equal to the profits made. Sometimes they are tripled to include the senior user’s attorney fees in extraordinary circumstances.

Trademark infringement is a serious matter, so clearing a brand is step one before you begin using it. A trained lawyer should perform a search to determine what infringement risks exist. Ideally, do this before you begin using a brand and exposing yourself to those risks. Smaller companies tend to avoid these risks. They will decide to adopt a different brand rather than risk becoming an infringer. Larger companies do this too. Though sometimes they think “how much would it cost to simply buy out the other companies’ rights?”. I have a strong suspicion that X Corp fell into this second group.

The Next Steps for X

It would require an exhaustive search to determine how many companies have been using the letter X (or a similar brand) in connection with goods or services related to X Corp’s. Further, it would require another exhaustive study to ascertain the reasonable value of those brands to those companies. I guarantee X Corp has performed this work and has these numbers. I further guarantee that X Corp is ready to pay something approaching this amount to simply acquire these rights from whatever companies may have legitimate claims to make X Corp stop using its new X brands.

Let’s take one example. Meta Platforms has a registration for X in connection with “online social networking services.” If Meta were to sue X Corp for infringement, it would need to show that the public would confuse them. X Corp would obviously argue there is no confusion by explaining the visual differences in the companies’ X brands and the ways the social media networks are different. This would be very risky. A more likely approach is for X Corp to negotiate with Meta to-

Take a license from Meta (not likely),
Enter a co-existence agreement and agree to certain limitations to reduce confusion (somewhat likely) or,
Buy all of Meta’s rights in the X logo.

The third option is a number that exceeds the valuation of Meta’s X logo brand. X Corp will need to go through this with many, many companies. This will easily cost billions.

Marketing X: The Road Less Traveled

So far, I’ve discussed the legal effort that X Corp will face. These include both gaining registration rights and the right to use its new X brands. A related question is why would X Corp do this? Why would it discard a four-billion-dollar asset in the Twitter brand? Why would it decide to incur billions in legal fees to be able to use and register these new X brands in connection with social media? I am not trained to answer these questions, so I turned to my friend Zachary Lemear.

Zack owns Pivot Creative Management where he serves as a marketing strategist. He also has a background in technology, which makes him uniquely qualified to weigh in on this topic. Zack first mentioned that people are overly focused on jettisoning a $4,000,000,000 brand. He admits this move is unconventional, “but maybe that is the entire point.” Elon is unconventional. “There is a tactic in marketing that sometimes works where you zig while other people are zagging. Take the road less traveled and you will get more focus. This seems to be the strategy with Elon and it’s working.”

Along those lines, Zack points out that Elon Musk is a “visionary.” Zack says, “Musk’s visionary status stems from his ability to identify industries ripe for disruption, set audacious goals, and drive his companies toward those objectives with a combination of technical innovation and market strategy. He often tackles fundamental human challenges, from sustainable energy to interplanetary colonization, positioning himself at the forefront of technological and societal change.”

You’ll need to visit Zack’s Blog Post to see his theory. According to Zack, “[t]here is a good possibility this is just one of many chess moves Elon is making.” Is X Corp simply operating in another dimension? Will this rebrand work out for them? Does it even matter? Only time will tell.

Elon Musk And Brand Protection For X

by Richard Rimer | Aug 16, 2023 | Brand Protection 101, Infringement, Education

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.

IP Bullies And Trademarks

by Richard Rimer | Aug 14, 2023 | Brand Protection 101, Office Actions, Cease & Desist, Education

IP Bullies and Trademarks

I’ve covered the other types of intellectual property bullies Patent Bullies and Copyright Trolls. Now it’s time to go over trademark bullies. The biggest difference in trademark law is that you do not need a registration to enforce your rights. However, you do need to use your brand (company name, mark, logo, tagline, etc) to enforce your rights. There are two main purposes behind trademark law:

To protect consumers
To foster commerce.

We want consumers to clearly know who is offering a product or service by the branding items placed on it. From a fostering commerce perspective, we want companies to know that they alone can profit from the branded product they develop and promote.

Avoid Confusing the Marketplace

My law firm is named Initiating Protection. People who see this should expect to find services offered by me or others at my firm. People who search for this should only find me or others at my firm. If my competitor used Initiating Protection or a confusingly similar name, this would confuse the marketplace. Consumers seeing a similar/identical brand used on related services would incorrectly assume my firm was behind those services. The law allows me to make the competitor stop using the name and take the profits earned by the competing firm from using my name.

Similarly to patents and copyrights, you can sell or license your trademark rights in your brand. It was these licenses or transfers that caused the “bully” situations in the patent and copyrights scenarios. Generally, this is not the case in trademark scenarios since you must be using your brand to enforce your rights.

What are Trademark Bullies?

The primary cause of trademark bullying comes from companies over enforcing their rights. Companies claim brands are similar when they are not, or they claim that products/services are related when they are not. While some of these companies simply do not understand the extent of their rights, others are trying to take more than the law allows.

An analogy might help. You have a neighbor who frequently tells kids in front of his house to get off his property. However, the neighborhood kids are goofing off on the sidewalk, not in his yard. In this case, the neighbor does not understand the extent of his rights. Others may be unbothered by the kids playing outside, but there’s always someone that thinks this violates his property rights.

The group that takes more than the law allows is much more conniving. This is akin to a toddler grabbing an older sibling’s toy and crying loudly enough until the older kid just lets them have it. These “grabby” companies know exactly what they’re doing. They are the bullies in the world of trademark law. The only people happy with their activities are their lawyers as they get great fees from all this legal activity.

Of the three types of intellectual property bullies, trademark bullies are probably the least offensive. However, it is frustrating to see them try to outspend companies to create these extra rights. How do you handle a bully? You identify them, call them out and don’t back down. I’m happy to help you if you feel you are the victim of a bully.

Copyright Trolls as IP Bullies

by Richard Rimer | Aug 11, 2023 | Brand Protection 101, Office Actions, Cease & Desist, Education

Copyright Trolls as Intellectual Property Bullies

Copyright law is a bit different from trademark and patent law. But beware, copyright trolls are lurking. In copyright law, you don’t need to make use of your work to prevent others from using it. You also do not need a registration to gain rights. However, you would need a registration to sue or claim statutory damages (A damage award specified within the statute rather than calculated based on degree of harm to plaintiff. Damages may be set by statute when calculating losses is difficult). The primary point of copyright law is to encourage artistic creation.

We want to reward the author/creator with the exclusive right to use and profit from their creations. This includes items that are substantially similar to or derived from their creations. For example, if I took a series of pictures, I would own the exclusive right to sell or distribute them. I’d also have the exclusive right to develop and sell photo books, publicly display the images or any similar item related to the pictures. Anyone other than me who did this would be violating my rights. With few exceptions, (e.g., fair use) I could sue for damages.

Many creators don’t have the interest and/or means to capitalize on these rights. For example, maybe I don’t want to make a photo book out of my pictures. The law allows me to sell or license my rights to others. In many cases these parties also have the right to sue for damages if an unauthorized party also sells a substantially similar work.

So, What are Copyright Trolls?

A troll is a party that collects the rights from others’ creations for the sole purpose of suing people who are using substantially similar items. One reason they have a bad reputation is that they often create traps. Going back to my example, I could sell all my rights in my pictures to a third party.

This party could then post my pictures online with words like “these would look excellent on a website.” The troll would then scan the web for that image to find anyone who copied the picture and placed it on their site. They often demand statutory damages of $30,000 per infringement plus their lawyer’s fees. Disgusting!

Don’t forget, there are two other types of bullies when it comes to Intellectual Property! Check out my posts on IP Bullies in The World of Patent and IP Bullies and Trademarks.

IP Bullies in the World of Patent

by Richard Rimer | Aug 9, 2023 | Brand Protection 101, US Registration, Office Actions, Cease & Desist, Infringement, Education

Intellectual Property Bullies in the World of Patent

As someone who represents smaller companies, I am frequently asked about the dangers posed by intellectual property bullies. In this context, a bully is a company that zealously or fraudulently enforces its intellectual property rights at the expense of other companies. Just like bullies in real life, intellectual property bullies come in many shapes and sizes. There are distinct differences between the entities who are overly protective of different types of intellectual property. That is, the variations between people enforcing copyright differ from those enforcing patent rights, and both are different from those enforcing trademark rights.

In patent law, you must have a registration in order to defend your patent rights. In some ways you can think of a patent as a deal between inventors and the government. The government will give an inventor the exclusive right to use (or practice) their invention if the inventor divulges how they made the invention/how it functions. For example, let’s say I run a frozen food company. I may have invented and patented 20 different ways to freeze food, but found that only one of those ways was the best for my business. I would still hold the exclusive rights in freezing food the other 19 ways, even though I was not using them in my own business. Accordingly, I could stop others from freezing food in any of those 19 ways, as they would be violating my patent rights.

Non-Practicing Entities (NPEs) and Patents

This situation creates a market of sorts. Many companies would not want to hold onto the 19 patents that they are not using. Often they sell these patents to other companies who never intend to actually use the invention that the patent covers. These companies are called non-practicing entities, or NPEs. They seek license fees or damage claims from other companies that are using infringing versions of the inventions. NPEs are often very aggressive about defending their patents, as this is their only source of income. They typically have spent a lot of money acquiring the patent registrations they own.

Back to my hypothetical frozen food company. My frozen food competitors might not be surprised to get a demand letter from my company asserting my patent rights. However, what often irritates my competitors is if an unrelated company, one that does not compete in the space itself, sends a cease and desist letter regarding patent rights related to freezing food. Because NPEs enforce rights in inventions from which they will never benefit, many people consider NPEs a bully. I am on the fence about NPEs being a bully, but I do understand the negative perception of them. However, NPEs serve a role in ensuring the original patent holder receives their deserved compensation for their inventions.

While this post focuses on intellectual property bullies in the world of patent, there are two other types of IP Bullies. I have two related posts on intellectual property bullies: IP Bullies and Trademarks and Copyright Trolls as IP Bullies.

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