Wayne Beynon, an Intellectual Property lawyer at London and Cardiff based law firm, Capital Law, analyses the situation between the two technology giants.

Sky has won a trademark infringement case against Microsoft for using the SkyDrive name for its cloud storage service.

The High Court case was the first round of what is likely to be an ongoing legal battle in the UK and Europe, as Microsoft prepare to appeal the decision.

In 2011 BSkyB initiated an action against Microsoft for passing off and for infringement of two registered Community trade marks (CTMs) and two UK registered trademarks (UKTMs) for the mark ‘SKY’.

The Judge in the case, Mrs Justice Sarah Asplin ruled that the inclusion of ‘Sky’ in the name ‘SkyDrive’ was likely to confuse customers.

BSkyB has trademarked the Sky name across a range of different goods and services, including computer software, e- storage and file sharing facilities, and so when Microsoft launched SkyDrive in 2007, Sky objected immediately.

However, it wasn’t until 2011 that BSkyB issued legal proceedings, a decision that was no doubt influenced by Microsoft’s decision to start using the SkyDrive programme as one of the main tiles on its “Windows 8” operating system.

In reaching her decision Mrs Justice Asplin pointed out that if one was to undertake a global profile of the Sky and SkyDrive brands there was every reason to speculate that the similarity of the two brand names would cause confusion in the minds of the average customer, meaning that consumers may believe that SkyDrive is a subsidiary of BSkyB, which provides satellite TV services, as well as services including Sky+, Sky Digital, Sky Broadband, Sky Sports and numerous others. In this context it is easy to see why Sky felt they had a valid argument.

Mrs Justice Asplin pointed out that the use of the word ‘Sky’ in SkyDrive effectively acted as a trademark function, especially when you consider the scope of BSkyB’s trademark reach, linking SkyDrive to BSkyB in the mind of the consumer.

Undoubtedly another nail in Microsoft’s coffin was the fact that Sky were able to demonstrate actual evidence of customer confusion with regards consumer calls to the Sky helpline in relation to the SkyDrive product, helping Sky to exhibit that there was a serious risk to not only their brand identity, but their reputation as well.

Microsoft contested that the word ‘sky’ is commonly recognised as relating to cloud storage and thus cannot be trademarked, however, the judge disagreed.

In addition to this, Microsoft counter claimed that four BSkyB trademarks should be invalidated based on “grounds of descriptiveness for cloud storage services”, under the assumption that cloud services and pay-TV services are not difficult to differentiate in the modern age.

Microsoft are currently said to be preparing their appeal. One wonders how heavily the cost implications of a potential rebrand of the SkyDrive name in Europe, not to mention the legal fees and possible fines are weighing on their minds.

Wayne Beynon is an Intellectual Property lawyer specialising in trademark infringement, passing off, design right infringement and patent infringement. For more information visit www.capitallaw.co.uk

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