A UK court has ruled that Microsoft's SkyDrive product infringes on a trademark owned by the British Sky Broadcasting Group, which operates under the name Sky. The ruling is valid across the entire European Union and could force Microsoft to pay for use of the SkyDrive name, or in a worst-case scenario, to rebrand the service throughout most of Europe. In part, the ease of confusion between SkyDrive's cloud services and Sky's broadband services led the England and Wales High Court to rule in favor of Sky, which holds the the "Sky" trademark for matters of software and digital communications within the EU.

Microsoft doesn't always settle

Though the ruling could lead Microsoft to abandon the SkyDrive name throughout Europe, it's possible that the software giant will try to settle, forming an agreement with Sky that would allow use of the SkyDrive name to continue. But while that may seem likely, Microsoft has decided against going down that avenue before. Just last year, Microsoft changed the name of its software design style from "Metro" because of a lawsuit brought by the retail group Metro AG.

Even if Microsoft wants to settle this time around, it's always possible that Sky won't agree to a deal. The broadcaster could force Microsoft to abandon the SkyDrive name, and it may have good reason to do so: Sky previously operated basic cloud services of its own, including one called Sky Store & Share that allowed its customers to hold files, photos, and calendar information online — not unlike SkyDrive itself.