Microsoft Will Rename SkyDrive to Avoid Trademark Dispute

Microsoft confirmed on Wednesday that it will not fight a July ruling by the England and Wales High Court in which it was found to have infringed on British Sky Broadcasting (BSkyB) trademarks for the term “Sky.” As a result, Microsoft has agreed to rebrand its SkyDrive cloud storage service with a new, as yet-unknown name.

“According to the settlement, Microsoft will not pursue its planned appeal of this decision and 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,” a joint statement from BSkyB and Microsoft notes. “The agreement also contains financial and other terms, the details of which are confidential.”

BSkyB is a UK-based satellite broadcaster, Internet provider and telephone services firm. It does not make or sell any cloud-based storage services, nor is it clear how the firm could have obtained multiple trademarks for a term as general as “sky.” Its legal victory over Microsoft in early July was unexpected, and at the time Microsoft said it would appeal the decision. It’s unclear what changed.

In its July ruling, the UK court noted that a survey of consumer found that some people did indeed assume that SkyDrive was a BSkyB brand and that such people “should not be regarded as especially unobservant or lacking in ‘circumspectness’.” “It would confuse me actually,” one surveyed consumer is quoted as saying of the two brands. “The ‘sky’ made me think about the Sky TV package.”

One has to wonder whether Microsoft’s dubious trademark of the equally general term “windows” played a role in this decision. It’s not hard to imagine Sky lawyers arguing that Microsoft’s ownership of that term was at least as tenuous as its own trademark. And perhaps the courts should take a moment to examine that while we’re at it?

Whatever the reason, we can expect Microsoft to rebrand SkyDrive—to something—sometime this year. But if you care about good product names—an area in which Microsoft has rarely excelled—this one has to hurt. Like Metro, the real name of the new mobile environment in Windows 8 and RT, SkyDrive was a good name.