Microsoft has lost a trademark battle against British Sky Broadcasting (BSkyB) at the U.K.'s High Court in London, which may force the software giant to change the name of its clouds storage service, or pay fines.
In a court ruling on June 28, Judge Sarah Asplin found that Microsoft had infringed the "Sky" trademark owned by BSkyB by using the "SkyDrive" name. As a result, the software giant could be barred from using the marketing term for its consumer and enterprise document and photo storage service in the 28 member state bloc.
Another hearing will be held in due course, which will allow Microsoft to put forward its case for an appeal against the judgment, as well as a decision on remedies that it will have to comply with.
Microsoft said it will be appealing the decision.
BSkyB remains one of the largest pay-TV broadcasters in the European Union, with a particularly strong presence in the U.K. Aside from satellite television, the part News Corp.-owned company has also worked to develop mobile applications and services for PCs and tablets that leverage the functionality of the cloud. The company also sported its own cloud storage service, which discontinued in 2011.
Microsoft has, however, submitted its own counterclaim to the suit, claiming that four BSkyB trademarks should be invalidated based on "grounds of descriptiveness for cloud storage services," under the condition that cloud services and pay-TV services are not difficult to confuse in this day and age.
While Microsoft accepted that there is some similarity between BSkyB's broadband provision and its cloud storage, according to the ruling, the judge argued that Microsoft's use of "SkyDrive" was ultimately detrimental to BSkyB's own trademarks, and therefore constituted an infringement.
The ruling comes just days after Microsoft showed off Windows 8.1, codenamed "Blue," at its Build developers' conference. The next-generation operating system will come with SkyDrive built-in, and is due out in October this year.
The cloud storage firm remains a popular product with consumers and enterprise users alike, sporting more than 250 million users worldwide.
In recent weeks, Microsoft added additional features to take on its rival in the outsourced cloud email and collaboration space by including Google messaging features to Outlook.com and the cloud storage service. SkyDrive also comes as a premium paid-storage service for users, further adding weight to Microsoft's bid to become a devices and services company.
This isn't the first time BSkyB has taken shots at products with similar sounding names. In 2010 when Skype was reportedly planning to raise money for an impending initial public offering, the broadcaster aimed at the voice-and-video calling service under similar circumstances. Skype won the trademark in a number of EU countries, and the case failed to go anywhere far.