Elon Musk’s X faces trade mark lawsuit from a social media ad agency

Last year Elon Musk acquired Twitter. The social media platform has undergone a series of changes but the major one must be its rebranding to X. Many felt the letter X was so generic, it could land the company into legal trouble. This happened this week when a social media ad agency launched a federal lawsuit against X Corp in Florida.

X Social Media was founded in 2015 by Jacob and Roseanna Malherbe. They have alleged Twitter’s new name, X, infringes the agency’s trade mark which also incorporates the letter ‘X’ and the platform’s recent rebranding from Twitter to X is likely to cause confusion among consumers.

In their lawsuit X Social Media have stated they have invested more than $400m in Facebook advertising to reach prospective clients. As there could well now be confusion within their market - which leans heavily on social media platforms like X/Twitter, Instagram and Facebook - the agency is now facing a significant loss of revenue. This is supported by the fact that X Social Media is now ranking lower in search results for its own name as Google now ranks X Corp.’s Wikipedia entry as the top result for similar searches.

This type of suit was predicted as soon as the rebrand became public. In the US alone there are nearly 900 active U.S. trademark registrations involving the letter ‘X’ across a variety of classes.

In the case of X Social Media, they have been using their name since 2016 having secured a federal trade mark for it.

As such they can show they have continuously used the X Social Media mark “in commerce” since at least early 2016. As a result, their legal counsel claims they have not only significantly invested in creating awareness of their brand within their target markets but also developed a distinctive ‘X’ mark that is now closely associated with its social media advertising services.

Despite this, there is an argument that X Social Media’s ‘X’ bears little similarity to Elon Musk’s ‘X’. X Social Media’s ‘X’ is a person whose arms and legs make the X shape whilst holding a pair of scales, a nod to their legal client base and heritage. X’s ‘X’ is very much a straightforward design of the letter.

That aside, the lawsuit argues that X’s rebranding does infringe the agency’s existing mark.

Their lawyers have claimed X Corp’s “recent attempt to register the mark in association with social media, business data, promotion and advertising, business consulting, market research services, and advertising services…necessitates this action” as it will cause X Social Media’s business and brand “serious irreparable harm”.

The suit also makes the point that X Corp.’s trade mark applications are for similar classes to X Social Media. These include promotional services, business consulting and information services, business data analysis and business, consumer, and market research.

In addition, the complaint alleges that there is even more confusion between the two brands because as Musk’s vision is to transform the company into an ‘everything app’, many of X Social Media’s clients now believe their advertising services are being offered by or in association with X.

The lawsuit follows the issuance of an earlier cease-and-desist letter to X Corp sent in August. Obviously, this was ignored.

Though X Social Media’s case may be the first, trade mark experts absolutely believe it won’t be the last. Some even expect this to be the start of a flood of legal action given how many companies are employing some sort of ‘X’ in their name and branding not to mention the multiple suits Meta received following its own rebrand from Facebook. Meta’s experience should have acted as some sort of warning to X Corp.

In fact, only last week UKTN asked Sarah Talland, one of Potter Clarkson’s trade mark partners, to comment on a UK case involving Yorkshire company Peel X. Sarah’s view seems to neatly overlap the basis of Social Media X’s lawsuit:

It appears to be the earlier user, having launched its branding over a year ago compared with Twitter’s rebrand to X taking place in July this year.”

This means that under UK law, Peel X would have “earlier unregistered rights which they could use to defend their position but also to challenge Twitter/X’s use if they needed to” even though, as Sarah was very quick to add, “challenging a large company such as X (formerly Twitter) is not easy”.

We will continue to monitor and report on this case.

If you feel your brand is being infringed and would like to take the required legal action, please contact Sarah today.