"This is an action for passing off and for infringement of two registered Community trade marks (CTMs) and two UK registered trade marks (UKTMs) for the mark 'SKY' by which the Claimants seek to prevent the Defendants from using "SkyDrive" as the name for their cloud storage service throughout the European Union."
After an eight-day trial in April, the presiding judge Justice Asplin ruled that in relation to the "average consumer," there is a likelihood of confusion and it is possible that the general public may believe that Microsoft and Sky's businesses either stem from the same source or are economically linked.
Surveys, interviews and recordings of confused SkyDrive users who rang the Sky helpline were reviewed to analyze whether the "average consumer" could become confused by the opposing trademarks. When asked whether the SkyDrive trademark and Sky services were linked, some of the responses issued were:
"It's just SkyDrive so I would assume it is something to do with the Sky the company. Obviously I'd have to read what's there to know whether it is or it isn't with Sky tying into a major brand."
"Sky is one of the largest brands in the world at the moment. As simple as that."
"I guess drive indicates you're linking up with something on the Internet."
"Well you are storing on a virtual hard drive it's a play on words. Some people may find it confusing if they are not IT literate."
BSkyB is one of the largest providers of paid television subscriptions in the U.K. and Europe. Sky has begun providing mobile applications and online streaming services to try and expand its large customer base and remain competitive in consideration of what the average consumer now expects. These new services also happen to use cloud-based technology. In addition, the company used to offer its own cloud-based storage service, Sky Store & Share, before closing in December 2011.
Although Microsoft admitted there was "some similarity between broadband provision and cloud storage," the tech giant plans to appeal the ruling. Even if SkyDrive brings Sky's services to mind, Microsoft believes that "on grounds of descriptiveness for cloud storage services," four Sky trademarks should be invalidated, and so has issued a counterclaim.
As a consequence of the ruling, Microsoft may be forced to rebrand the cloud-storage service. However, as the businesses are distinct, a fee may be imposed instead -- which would allow the tech giant to keep its cohesive brand rather than start from scratch in the United Kingdom and Europe.