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Originally published July 31, 2013 at 7:07 PM | Page modified August 1, 2013 at 10:53 AM

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Microsoft to drop ‘SkyDrive’ in trademark settlement

Seattle Times technology reporter

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Vista Drive. No one else wants that name! MORE

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SkyDrive, the Microsoft online storage service, is playing an increasingly big role in the company’s push toward becoming a devices-and-services company. But now, Microsoft must rename it.

The company said it would rebrand SkyDrive after reaching a settlement with British Sky Broadcasting Group, which had contended that Microsoft’s use of “SkyDrive” infringed on the British company’s “Sky” trademark.

An English High Court judge had ruled in June that Microsoft had indeed infringed on British Sky Broadcasting’s trademark.

The settlement Wednesday allows Microsoft to continue using the SkyDrive name until it comes up with a new one. The company also agreed not to appeal the judge’s decision, according to a news release.

A Microsoft spokesman declined to say when it will come up with the new name or what it is likely to be.

“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,” Microsoft said in the news release.

British Sky Broadcasting said that “we 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.”

The British communications company provides TV as well as broadband Internet services in the United Kingdom.

The company launched Sky+, a set-top box, in 2001 and over the years has trademarked other offerings that include the word “Sky” followed by another word, such as Sky Digital, Sky Movies, Sky Mobile and Sky Photos, according to a court document. From 2008 to 2011, the company also provided Sky Store & Share, an online storage service where customers could store their digital files and photos.

Microsoft launched SkyDrive in 2007 as an online storage service for users’ files, photos and other content. In May, the company said there were 250 million SkyDrive users.

The service gained increased prominence with the launch last year of Windows 8, which included SkyDrive as one of its main set of tiles that appear when a Windows 8 machine boots up.

And in the upcoming Windows 8.1 update, SkyDrive will become the default save location for users’ files and other content. (Traditionally, the default storage location was the local drive on a person’s PC.)

That’s because SkyDrive is at the center of Microsoft’s consumer vision of users having a number of devices (tablets, phones, PCs, consoles) that connect to an online central storage location. That allows the devices to remain connected to services, synced with each other, and serve as portals to personal files and content no matter where a person is.

Microsoft has dealt with similar naming and trademark issues before, including recently with “Metro” — the name it had given its Windows 8 tile-based user interface. Microsoft had already used the name “Metro” in many public presentations leading up to the release of Windows 8. But then it dropped it after German company Metro AG raised the issue of trademarks. Microsoft is now referring to that tile interface as “Modern UI” or “Windows 8 UI.”

A Microsoft spokesman declined to comment on whether or how the company discussed trademark issues when the SkyDrive name was decided upon.

“Trademark owners have become increasingly aggressive, making more and more outrageous claims,” Stanford University law professor Mark Lemley said.

“The idea that consumers would be confused into thinking that SkyDrive and British Sky Broadcasting were the same thing is ludicrous. ... I think Microsoft simply decided that keeping the name wasn’t worth the additional time and uncertainty of an appeal,” Lemley said.

Sean O’Connor, a University of Washington law professor, said Microsoft may have settled because it’s unpredictable how courts will decide on the question at the heart of trademark disputes: whether consumers will be confused and get the wrong product because the names sound similar.

Also, at least under U.S. trademark law, if a company can show that the public recognizes a certain word, such as “sky,” as a trademark, it has a stronger case.

And in the U.K., where some 4.1 million households use Sky’s broadband services, according to court documents, many people would likely associate “Sky” with the broadcast company. (The company also has about 10 million TV customers, according to its website.)

Microsoft’s decision to launch with the SkyDrive name was probably made as a calculated risk.

Microsoft may have thought that similar names in their trademark category wouldn’t be strong enough to merit lawsuits or to hold up in court battles, O’Connor said.

Also, because Microsoft’s products tend to launch globally, trademark searches would likely have to be global as well.

“Even companies with extensive resources have to make tactical decisions on how extensive to make their trademark searches,” O’Connor said. “Like everyone else, they live in a world of imperfect information.”

Janet I. Tu: 206-464-2272 or jtu@seattletimes.com. On Twitter @janettu.

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