Why is Facebook rebranding? What are the risks and rewards of rebranding?

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Why is Facebook rebranding? What are the risks and rewards of rebranding?

Last week Mark Zuckerberg announced that Facebook was changing its name to “Meta”. Such a major rebrand is likely to cost billions, so the inevitable question is: “Why?”

According to Mark Zuckerberg, the official reason is that the current brand could not "possibly represent everything that we're doing today, let alone in the future. We're now looking at and reporting on our business as two different segments, one for our family of apps, and one for our work on future platforms.". In short, it appears that the company is moving into different markets, and therefore the brand is changing too. This is often a good reason to rebrand; however, many will see the this as an attempt by Facebook to distance itself from its recent negative publicity, another good reason.

The revelation of the enigmatic name “Meta” has sparked many conversations. The name appears to be a nod to the future of Facebook, which seems to be the creation of a "metaverse": an online world where people can game, work and communicate in a virtual environment. Whether “Meta” will create any market traction remains to be seen, especially as the “metaverse” does not exist yet.

Brand owners will be keenly watching this space. Undergoing a rebrand is a big decision requiring a significant investment of time and costs, whilst entailing many risks which need to be carefully managed. Why might a business take on this burden? A costly rebrand may be necessary to reflect changes in how the company operates, such as changes in the customer profile, the product lines, or the marketplace and industry as a whole. Otherwise, it may reflect a shift in how the company wants to be perceived. For example, the marketing strategy may be outdated, or the business may want to distance itself from historic reputational issues.

In Facebook’s case it is likely to be a combination of the latter points. Undoubtedly, like any other business considering a rebrand, Facebook would have carried out substantive market research to understand its place in the market. All brands must ensure that they stay competitive and find ways of increasing consumer engagement whilst improving brand perception. Facebook also faces the risk of losing some of its goodwill due to customer confusion.

Aside from the challenge of a rebrand, Facebook have also faced a trade mark infringement claim by Meta PCs, an Arizona based company. Meta PCs applied for their trade mark, Meta, in the US just over a year ago. The mark was applied for under class 9 concerning computers, software, networking equipment etc. Meta Platforms Inc, the holding company of Facebook, does not appear to own any trade marks. However, on 1 November 2021, Facebook applied for a figurative mark in the US including the words “META”:

This mark also concerns class 9. Clearly as Facebook have adopted a figurative mark rather than a word mark, the marks in question are similar rather than identical. Both of the marks concern class 9 goods and some of the goods listed are identical.

Under UK law, even though there are differences between the marks, such as stylised typefaces, the marks are similar as Facebook have replicated the same word element. Given this, it looks like the scene is set for a trade mark battle.

Once again, this shows the value of undertaking prior rights searches before launching a brand. Prior rights searches can indicate the risk of future oppositions and trade mark infringement claims. It appears the rebrand won’t be plain sailing for Facebook.

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