X Corp. has been sued for copyright infringement, wrongful termination and employment discrimination since Elon Musk acquired the company known as Twitter less than a year ago. Trademark infringement can now be added to its list of legal troubles, with the filing of a lawsuit from an advertising agency.
That ad agency, X Social Media, on Monday sued X Corp. in Florida federal court, arguing that the rebrand has confused consumers by leading them to believe that the company’s ad services are associated with the Musk-led company. It seeks an order that would block X Corp. from continuing to use its mark and treble damages for “exceptional” infringement.
The change from Twitter to X Corp. was made in July as part of Musk’s plans to expand the social media service into an “everything app.” But at the time of the announcement, there were nearly 900 trademark registrations covering the letter “X” across various industries. That included one belonging to Meta for social networking services in entertainment and another belonging to Microsoft for gaming.
X Corp. has filed to register “X” for use in association with social media, business data analytics, market research and advertising services, among various other areas. X Social Media, however, says it has used the mark in identical and closely-related services for over eight years.
“They also encompass services and market channels where X Social Media has labored for years to successfully cultivate brand awareness for its X SocialMedia Mark among consumers,” states the complaint, which describes the business as utilizing social media to connect consumers with legal services.
This allegedly infringing, overlapping use of the “X” mark has led to the perception that X Corp. is the source for services offered by X Social Media, the company claims. As “X” is a social media platform, “consumers naturally conflate” the two companies, according to the lawsuit.
X Social Media says it frequently emphasizes the “X” portion of its mark in advertising, blogs and newsletters, which are named “The X Blog” and “X Weekly,” according to the complaint. It says it has invested over $400 million in advertising, over $2 million of which was to build brand awareness.
The company advertises its services under the federally registered trademark “X SocialMedia” for use in association with advertising services. It says it’s exclusively used the mark since at least 2016, entitling it “to a presumption of incontestability.”
The lawsuit claims X Corp.’s adoption of “X” exemplifies exceptional willful conduct since it had a “legal duty to conduct due diligence and avoid infringing” on existing marks. X Social Media allegedly sent a cease-and-desist in August but was ignored.
“In a short time, X Corp. has wielded its social media clout, marketing resources, and overall national notoriety to dominate consumer perception of its ‘X’ mark,” the complaint states.
X Social Media claims trademark infringement, as well as violations of Florida competition and unfair trade practices laws.
To win the case, X Social Media will have to show that consumers are being confused by X Corp.’s use of an identical mark. The court will assess the degree of similarity of the marks and the proximity in the services offered by the two companies, among other factors.
The company formerly known as Facebook was also sued last year when it rebranded to Meta. Virtual reality company MetaX accused the company of purposely stealing its name as part of its pivot to the metaverse. A trial date has not been set.