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skydriveIn a major change for one of Microsoft’s key online services, the company will rename its SkyDrive cloud storage service as a result of a trademark settlement announced this morning with British Sky Broadcasting, after losing a court case in the European Union.

Microsoft isn’t commenting beyond an official announcement (below), but the change appears to apply globally. The companies say the settlement “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.”

No word on specific timing, or the new name. SkyDrive has taken on added significance in recent months with tighter integration as the default storage mechanism in Windows 8.1.

[Follow-up: BallmerDrive, LiveDrive, MetroDrive: What should Microsoft rename SkyDrive?]

Here’s the full text of the news release announcing the settlement.

British Sky Broadcasting and Microsoft Reach Settlement in Trade Mark Case

Sky allows Microsoft temporary use of SkyDrive name during transition period following trade mark infringement judgement – while Microsoft agree to forego planned appeal

British Sky Broadcasting Group plc (“Sky”) and Microsoft Corporation (“Microsoft”) have today announced the settlement of trade mark infringement proceedings in the European Union brought by Sky against Microsoft in the English High Court. The settlement of this case reflects the desire of both companies to focus on joint projects to benefit their customers.

In June, High Court Judge Mrs Justice Asplin issued a judgment holding that Microsoft’s use of the name SkyDrive infringed Sky’s rights in the ‘Sky’ mark.

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. The agreement also contains financial and other terms, the details of which are confidential.

“We are pleased to have reached a settlement after Microsoft agreed not to appeal the trade mark infringement judgment in relation to its SkyDrive service,” said Sky. “We will remain vigilant in protecting the Sky brand and will continue to take appropriate action against those companies who seek to use our trade mark without consent.”

Microsoft said, “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.”

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