Trademark hurdles for Facebook's Meta rebrand

Leichtman Law PLLC Managing Partner David Leichtman joins Yahoo Finance to discuss social media giant Facebook's recent rebranding efforts.

Video Transcript

ZACK GUZMAN: Welcome in. Welcome back into Yahoo Finance Live. As we're picking up coverage here on the big Facebook name change, of course, as everyone's been talking about, Facebook changing its name to Meta, a nod towards the metaverse. And it is interesting to think about how Facebook got there in a world centered around trademarks, and the history, the backstory rather interesting, too, when you think about what Zuck's non-profit, of course, the one he runs with his wife, the Chan Zuckerberg Initiative, actually bought out a company called Meta back in 2017.

And that trademark was owned by them before being transferred to the Chan Zuckerberg Initiative. Rather interesting when me think about the path to arrive at the name, Meta. And for more on that, I want to bring on our favorite trademark attorney, David Leichtman, is Leichtman Law managing partner. He joins us once again here.

And David, I mean, when we're looking at it, it's interesting because I saw them change their name to Meta, was curious about what other companies out there might have tried to trademark the name Meta in the past. And there are a few, including one that's in the NFT space. But what do you make of that change and, I guess, the route that Facebook took to get there?

DAVID LEICHTMAN: Well, I think first of all, they more likely than not contacted people anonymously or pseudonymously or using a fake name for the purpose of trying to acquire as many of the rights as they could. Usually, somebody does that quietly or through shell companies and things like that. That's typically how that would have been done. But they would have had to try to really keep it a secret for as long as possible.

ZACK GUZMAN: Yeah, and then the other thing, too, I mean, as we've discussed before when it comes to, you know, trademark law-- it's always fun for me. I don't know if it's fun for our viewers, but I think it is to get into the nitty gritty when we talk about goods and services classification codes, because you can trademark something, but it's kind of reserved to exactly what you're doing.

The metaverse is very new and NFTs are very new, but it was interesting to see one filing out there, including Meta, focusing squarely on NFTs. When you think about maybe some challenges out there now by other companies that have had meta trademarks in the past, I mean, how important is that as maybe far as Facebook or the company now we're going to refer to as Meta carves out a niche for itself?

DAVID LEICHTMAN: Well, a couple of things that sort of come to mind, which is you can't own the entire idea of the Metaverse, right? And I don't think they're going to try to do that to the extent some smaller companies come along and say, hey, you took our name for this service or that service. I'm pretty sure Mr. Zuckerberg can write a big check to those companies and proceed because what he has in mind here really is what we sort of referred to as a house of brands, as opposed to a branded house in trademark law.

So you think about a branded house. Amazon, almost everything that they do, right, has the Amazon name on it., Amazon Prime, Amazon Web Services, right? They're trying to create a brand around Amazon. And when Jeff Bezos wants to have another company that's not named Amazon, he creates his own company called Blue Origin, right, which is not related to Amazon.

On the flip side of that, take Google, right, which changed its name to Alphabet because they want to have Google and YouTube and Waymo and all of these different brands under their company name. And I think that's what Facebook, now Meta, basically is trying to follow what Alphabet and Google have done.

AKIKO FUJITA: So, David, I think you make a good point. And they got a lot of money, this company. They can write out a check. What kind of, I mean, you know, I asked this question because I think there's still-- we don't know exactly how long, how extensive this footprint is going to look like. So while they may have trademarked it in certain platforms, certain areas, there's got to be questions about how much more they're willing to shell out. I mean, what kind of checks are we talking about?

DAVID LEICHTMAN: Well, again, I mean, they can't-- you know, they've made a conscious decision, right, that they know they're not going to be able to prevent people from using the term "metaverse" in a descriptive way to describe what's going on in the new internet. So they've made that decision. So they're not going to necessarily try to prevent other people from using the phrase metaverse in a descriptive way.

But what they're really trying to do is sort of set apart their different platforms and their different products, right? So that if you think about it this way, right, who uses Facebook? Who are most of the active users or people connecting with their relatives or their classmates? Who is using Instagram? It's mostly younger people. Who's going to be using Oculus? It's mostly gamers, right?

So what they're trying to do is sort of create an umbrella over all of those different things, right? And you can see it even in the logo, right, that they have attached to Meta, which looks like the infinity sign. And, you know, what's a Google plus one, is infinity, right? So they're really trying to sort of get out in front of who is probably their biggest competitor.

ZACK GUZMAN: Yeah, David, lastly, I feel like there are some people watching this here, like, ah, I could have thought of this. I could have gone out and trademarked Meta, or I could have done whatever here, or maybe thinking about other terms in crypto that they might want to trademark, too.

But I guess as one takeaway for any entrepreneurial viewers out there, just remind us, too, I mean, kind of what that looks like in terms of having the right or first claim to some of these things because you can't just go around trademarking everything. You've got to show you got something to back it up or actually working on something. That's, I guess, an important reminder here.

DAVID LEICHTMAN: Sure, well, actually, when the rumor first came out last week that they were going to change their name, I sent the lawyers in our firm an email with a contest. And I said, you know, whoever comes closest to Facebook's new name will win a prize at our holiday party. And actually, one of our young lawyers came up with Meta, exactly just those four letters. And so, kudos to him. So it wasn't too hard to predict, you know, the kind of thing that they were going to try to do.

But you can-- when you try to register a federal mark to get federal rights, there are two ways to do it if you're just starting out. You can file what's called an intent to use application, which means that you intend to use this mark in the future or you can get one that's actually based on use.

Now if you file it on an intent, you use basis, right? You have to have a good faith intent to use it, right? And on top of that, then you have to take steps towards actually using the mark in commerce. And so those are the steps you would take and you would want to do a search in the Trademark Office, both for already registered marks, as well as marks that have pending applications.

AKIKO FUJITA: So next time, David, we hear about a name change for a big tech company, we're going to call you up to see if you've got--

ZACK GUZMAN: You gotta hit us up.

AKIKO FUJITA: --any guesses on what it's likely to be before the big announcement. David Leichtman from Leichtman Law, PLLC managing partner there. It's great to have you on today. Really appreciate the time.