Elon Musk's Twitter rebrand could land him in legal hot water with Meta CEO Mark Zuckerberg and others, experts say.
On Sunday, Musk announced that he was getting rid of the Twitter brand and logo. The social media platform is now known as "X," CEO Linda Yaccarino confirmed on Sunday.
"X is the future state of unlimited interactivity — centered in audio, video, messaging, payments/banking — creating a global marketplace for ideas, goods, services, and opportunities," Yaccarino, 59, posted on the app. "Powered by [artificial intelligence], X will connect us all in ways we're just beginning to imagine."
The problem: Meta, Microsoft and other companies already own trademarks for Twitter's new name.
Get top local stories in San Diego delivered to you every morning. Sign up for NBC San Diego's News Headlines newsletter.
Meta's trademark for a white-and-blue X relates to "social networking services in the fields of entertainment, gaming and application development." Microsoft's trademark relates to its Xbox gaming consoles. A legal battle over the intellectual property rights to X may be inevitable.
"There's a 100% chance that Twitter is going to get sued over this by somebody," trademark attorney Josh Gerben told Reuters on Tuesday, after reportedly discovering nearly 900 active U.S. trademark registrations already covering the letter X.
In that scenario, Musk's odds of prevailing are relatively high, says Stacy Wu, a New York-based intellectual property lawyer.
Money Report
"Given Musk's high profile and deep pockets, I wouldn't be surprised if he were sued by relatively smaller companies looking for good PR or a payout, based on likelihood of confusion," she tells CNBC Make It. "But it's unlikely they would prevail in the end."
Wu offers two reasons. First, Musk may be able to carve out "limited exclusive rights" to the specific X used in the company's new black-and-white logo, she says.
That could have its own complications. Despite being offered "for free" by a user, the logo appears to have been derived from a font set called Special Alphabets 4 that requires a one-time licensing payment of $29.99. It's unclear whether Musk or the designer acquired the proper licensing before the logo was published.
The company didn't immediately respond to CNBC Make It's request for comment.
Second, Musk's ability to financially outlast potential litigants gives him a strong chance against most challengers. "Trademark cases are often settled when one side does not want to spend any more money fighting," says Wu.
Legal questions aside, Twitter's shift to X ushers in a new era for the platform to become an "everything app," offering a plethora of services in one place, according to Musk. His publicly described vision is somewhat reminiscent of WeChat — an instant messaging, social media and payments app popular in China, owned by tech giant Tencent.
"There's absolutely no limit to this transformation," Yaccarino wrote on Sunday. "X will be the platform that can deliver, well ... everything. @elonmusk and I are looking forward to working with our teams and every single one of our partners to bring X to the world."
The announcement comes just weeks after the launch of Threads, a Meta-owned app seen by some as a "Twitter clone." It also follows a meeting last week between President Joe Biden, Vice President Kamala Harris and representatives of multiple large tech companies to discuss AI safeguards.
Amazon, Meta, Microsoft, Google, Open AI, Inflection and Anthropic all "agreed to voluntary commitments for responsible innovation," Biden announced in a statement.
"These commitments are a promising step but we have a lot more work to do together," Biden said. "Realizing the promise of AI by managing the risk is going to require some new laws, regulations and oversight."
X may be "powered by AI" in the future, as Yaccarino noted, but the first phase of Twitter's rebrand is simple for now. The platform's homepage can be accessed through the domain X.com, and some desktop users can see the new logo on their screens instead of Twitter's classic blue bird logo.
"And soon we shall bid adieu to the Twitter brand and, gradually, all the birds," Musk wrote in a post on Sunday.
More complex changes could arrive later, Yaccarino posted.
"It's an exceptionally rare thing — in life and in business — that you get a second chance to make another big impression," she wrote. "Twitter made one massive impression and changed the way we communicate. Now, X will go further, transforming the global town square."
DON'T MISS: Want to be smarter and more successful with your money, work & life? Sign up for our new newsletter!
Take your business to the next level: Register for CNBC's free Small Business Playbook virtual event on August 2 at 1 p.m. ET to learn from premier experts and entrepreneurs how you can beat inflation, hire top talent and get access to capital.
