In trademark speak, “reverse confusion” occurs whenever the junior user of a trademark dominates the market such that the senior user of the same or a confusingly similar mark loses its accumulated goodwill in the marketplace. This was the subject of our recent article about the case of Ironhawk Technologies, Inc. v. DropBox, Inc. in which the U.S Court of Appeals for the Ninth Circuit determined that DropBox’s “SmartSync” technology infringed upon Ironhawk’s software product named “SmartSync.” This was a case of reverse confusion. Ironhawk developed its technology before that of Dropbox, registered its mark first, but was later dominated in the marketplace by DropBox, which used the same trademark.
Cases of reverse confusion are not uncommon. In fact, a recent reverse confusion trademark infringement case, X Social Media LLC v. X Corp., filed in the Middle District of Florida involves two parties – one you’ve definitely heard of, and one that you may or may not have heard of. The plaintiff, X Social Media LLC, is a social media marketing technology company that specializes in connecting consumers with legal services under the X SOCIALMEDIA trademark. The defendant, the company that nearly everyone has heard of, X Corp. is the parent company of X, formerly known as Twitter. So, what has Mr. Musk done now?
First, some background. In an article entitled, “X-treme Rebranding,” we wrote about Elon Musk’s seemingly overnight rebranding of Twitter. At the time, we were unable to identify a U.S. trademark application for X. We also anticipated that if the company attempted to register X, given the number of existing X trademarks, there would be issues. In March 2023, X Corp. apparently registered or applied to register the X trademark in several foreign jurisdictions. Then, in September 2023, after we published our newsletter article, X Corp. filed several U.S. trademark applications based upon the foreign registrations, giving X Corp. a U.S. priority date of March 2023. This is an advanced trademark strategy that we have written about previously. Trademark application filings in the USPTO based upon a foreign registration can serve to “hide” a company’s branding intentions in the United States while giving it the ability to preserve the earlier foreign priority date when it registers in the U.S. Now that X Corp. has filed in the U.S., it is running into the very problems that we anticipated earlier. X Social Media LLC v. X Corp. is illustrative.
X Social Media was founded in 2015 when it began using the X Social Media mark and well before Elon Musk’s Twitter rebranding. According to X Social Media’s complaint, it “frequently emphasizes the X portion of the mark around its advertising, blogs, and newsletter highlighting its work.” It also claimed to be the 159th fastest-growing private company in the U.S. in 2020. The complaint goes on to describe X Corp.’s Twitter rebranding and, importantly,
the media coverage and attention generated by the launch has quickly caused reverse confusion and led consumers to believe that X Social Media’s advertising services are being offered by or associated with X Corp.… Even media outlets covering twitters rebrand are using the X Social Media Mark in its entirety in headlines while referencing X Corp.
X Social Media claims that it has already suffered financial loss and that the reverse confusion caused by the Twitter rebranding “will continue to X Social Media’s financial detriment and to the detriment of the consumers who use and benefit from its services.”
Not only does X Social Media claim reverse confusion, it claims that X Corp.’s infringing activities were intentional:
As a sophisticated company with a substantial intellectual property portfolio, including numerous federally registered trademarks and applications for its “X” marks, X Corp. would have conducted due diligence clearance searches and been aware of X Social Media’s pre-existing rights.
To emphasize the point, X Corp. apparently ignored X Social Media’s cease-and-desist letter — an attempt at pre-litigation resolution — which certainly suggests that X Corp. intends to bully its way to a trademark registration, other trademark owners be damned. The events of this lawsuit are too recent to draw any conclusions but when we learn more it will certainly be fodder for another newsletter article.