SkyDrive, Microsoft's popular cloud file storage service, will undergo a name change following the software giant's defeat in a trademark case brought by the British Sky Broadcasting Group (BSkyB).
BSkyB launched legal proceedings against Microsoft in the United Kingdom, asserting that Redmond's SkyDrive brand infringed on its Sky trademarks. On June 28, Justice Sarah Asplin of the England and Wales High Court ruled in BSkyB's favor.
In her judgment, Asplin cited consumer confusion as a factor in her decision. She stated that "if one undertakes a global assessment there is every reason to conclude that there is a likelihood of confusion in the average consumer in the sense that there is a risk that the public might believe that the services come from the same undertaking or one which is economically linked."
In effect, Microsoft's use of SkyDrive brand had been invalidated in Europe. The company originally planned to appeal the decision but has since reversed course.
Rather than revisit the issue in court, or come up with an alternative label for Europe, Microsoft entered into a settlement deal with BSkyB that will allow the software company to use the SkyDrive name as it prepares to launch a global rebranding effort.
In a press statement, the companies announced that "Sky will allow Microsoft to continue using the SkyDrive name for a reasonable period of time to allow for an orderly transition to a new brand." The deal's exact terms, which include a monetary component, are being kept under wraps.
BSkyB warned that Sky is off-limits, saying that it "will remain vigilant in protecting the Sky brand and will continue to take appropriate action against those companies who seek to use our trademark without consent."
Microsoft, meanwhile, signaled that the company is moving on. "We're glad to have resolution of this naming dispute, and will continue to deliver the great service our hundreds of millions of customers expect, providing the best way to always have your files with you."
The companies said that settlement "reflects the desire of both companies to focus on joint projects to benefit their customers." The companies have partnered to bring Sky programming to the Xbox 360, an agreement they plan to extend to the upcoming Xbox One console.
As an alternative to online storage services such as Dropbox and Google, SkyDrive has emerged as one of Microsoft's successes in the hot cloud services market.
On Feb. 8, SkyDrive group program manager Omar Shahine announced that the cloud storage platform had scored a major achievement. "Recently, we reached a big milestone; our customers are now storing over a billion Office documents on SkyDrive!" Tami Reller, Microsoft's chief marketing officer, announced on May 7 that SkyDrive had surpassed 250 million users.
Lately, SkyDrive has taken on a more prominent role in Microsoft's software and services ecosystem. The platform provides cloud file storage, share and syncing services for the company's cloud-enabled Office products, namely Office 2013 and Office 365. Windows 8 and RT offer deep SkyDrive integration and will become even deeper with the upcoming release of Windows 8.1.