So What’s the Real Reason Twitpic is Shutting Up Shop?

As regular readers will be aware, I do not usually write about trade mark matters on this blog.  However, I am completely mystified by Twitpic’s announcement this week that it will be closing down on 25 September 2014, allegedly because it lacks the resources to take on Twitter in a trade mark dispute, and so I want to put the question out there: what is really going on at Twitpic?

Twitpic, if you are unfamiliar with the company, launched in February 2008, providing a service to enable users easily to ‘attach’ photos or other images to their tweets on Twitter.  A tweet cannot actually contain an image, but it can include a link to an image which is stored anywhere on the internet.  Services like Twitpic (there are now many others, including Instagram, and Twitter’s own image-hosting platform) upload users’ images to their own servers, and post tweets on behalf of the users which contain links to the images.

The implication seems to be that Twitter is trying to deprive Twitpic of the right to use its name, and that this is why the service is shutting down.

The problem I have with this is that it is not true.

Twitter has no problem with Twitpic continuing to use the Twitpic name.  What Twitter will not do, however, is to allow Twitpic to register its name as a trade mark.

The Basis for Twitter’s ‘Demands’

What right, you might ask, does Twitter have to prevent someone from registering a trade mark they have been using for over six years?  Every right, as it turns out – in order to operate its service, Twitpic uses Twitter’s API (‘application programming interface’) to connect to Twitter and post tweets on behalf of its users.  And Twitter permits access to its API (as it is perfectly entitled to do) subject to compliance with its terms of service.  Those terms incorporate the Twitter Brand Policy, which provides (among other things) that users of Twitter’s services must not ‘Apply for a trademark with a name including “Twitter”, “Tweet”, the Twitter bird, transliterations or similar variations thereof.’

While ‘Twitpic’ is not the same as ‘Twitter’, its meaning is very plain to all users: it is a ‘picture’ service for use with ‘Twitter’.  That was, of course, the deliberate intention of Twitpic in choosing its name – it wanted prospective users to immediately appreciate the nature of the service.  It chose the name, incorporating a substantial element of the Twitter brand, in order to describe to users the purpose of its service.

And Twitter, to its credit, apparently has no issue with this.  Legally, it could no doubt have prevented the use of most variations of the words ‘Twitter’ and ‘Tweet’, on the basis that they are infringing its trade marks.  But, recognising the value of the ecosystem built around the Twitter platform by third-party service providers, Twitter has taken a broader view.  In particular, Twitter’s brand policy permits other parties to use its trade marks in promoting their own goods and services, subject to some rules to ensure that Twitter retains ownership of its trade marks, and control over the way in which they are used.

Twitter – Not So Much the Bad Guy?

This is actually quite smart, sophisticated and enlightened management by Twitter of its valuable IP assets.  And it is very generous to third-party service providers, who effectively get to use Twitter’s brand, trade marks and reputation, to promote their own services.  In the long run, any independently successful business is going to be better off having its own, unique, brand (like ‘Instagram’ for example, which managed to get itself acquired by Facebook for US$1 billion).  But for smaller, or less ambitious, service providers, being able to bootstrap off Twitter’s brand is a great advantage.

So what is Twitpic’s problem?  It does not have to stop using its name.  It does not have to rebrand or establish a new identity.  All it has to do is to comply with the Terms of Service by which it is bound by virtue of its use of the Twitter API, which include not applying to register its name as a trade mark.  If it is unwilling to follow Twitter’s rules, then Twitter is entitled to deny access to its API.

Conclusion – Did Twitpic Simply Miss the Boat?

Whatever the reason for Twitpic’s shutdown on 25 September, it is not the prospect of a long and costly legal battle with Twitter.  Twitpic has not had a registered trade mark up until now, and it does not need to have one in order to continue providing its service.

My guess is that, like the vast majority of start-up ventures, Twitpic has failed to establish a successful business model that will enable it to turn a profit.  While it was an early entrant on the Twitter platform, it has been overtaken by services such as Instagram, that add value on top of the basic ‘post a picture to social media’ functionality, and by Twitter’s own image hosting service that is integrated with Twitter’s apps and web interface.

Perhaps it is simply easier to blame failure on the alleged actions of the 900 pound gorilla, than to admit you missed the boat?

Tags: Intellectual Asset Management, Strategy, Trademarks