Twitpic’s Abrupt Announcement to Shut Down over Trademark Dispute: Convenient Excuse or Full Story?

Twitpic announced in a blog posting today that it will be shutting down on Sept. 25th over a trademark dispute with Twitter regarding the use of the name "twitpic." Various media outlets have also covered the announcement such as  Wall Street Journal and Time.

The reporting on this story has thus far not raised many questions over the rationale provided, but as an IP lawyer, it's hard to believe that this was the real reason to close down the business.  Twitpic has apparently existed for a number of years: it is hard to believe that the company would not have been advised years ago that it was never going to secure a trademark on the name "Twitpic" and that it would not have been warned that a trademark dispute with Twitter was in its future if it went forward with this particular trademark without working out a prior agreement with Twitter.  Yet, according to the Wall Street Journal, the company had attempted to register this trademark three times.  Really?

A quick search of the most recent trademark registration filing for "Twitpic" reveals that the examiner issued an office action on October 23, 2013, refusing the trademark registration for "likelihood of confusion."  In response, Twitpic filed a response to the office action, arguing that the trademark should be granted due to the execution of a coexistence agreement with Telly, Inc., which was executed by the parties April 22, 2014.  The examiner then approved the registration for publication.  At that point, Twitter filed the foreseeable opposition to the registration being granted.

Interestingly enough, the USPTO database reveals that in the prior two filings, the application never made it past the office action stage and thus never went to publication.

But it is hard to believe that the company never anticipated that Twitter would oppose the granting of the trademark if an application ever made it to the publication stage.  Moreover, even if a trademark application had never been filed, it was almost inevitable that "Twitpic" would have to change its name sooner or later if the company survived long enough to generate revenue and get on Twitter's radar screen.

So, one can't help but wonder if the real story behind all the media buzz was more about money and less about Twitter itself.   Could it be that the start-up had yet to come up with a successful revenue model and has thus just run out of money and was looking for a convenient excuse to close down?  Neither the media reporting nor Twitpic itself has released any information about any trademark infringement litigation being initiated against the company.  Thus, in all likelihood, simply dropping the trademark application and changing its name would have been sufficient to resolve its current legal issues with Twitter.   I would imagine any outstanding issues with Twitter could then have been easily settled.   But obviously, settling the issues with Twitter would not have resolved any underlying financial problems that existed with the company.  Those would have remained.  And perhaps the company would have been a little harder to find rebranded under a different name that was not so closely tied to Twitter.  However, I would assume its customer base would still have been intact.

The bottom line:  I think there is reason to suspect that the public explanation being reported on by the media is a convenient excuse for closing down rather than the full story.  What do you think?