British broadcaster Sky lodged a complaint with the EU trademark authority a decade ago, claiming that consumers risked confusing the Skype name and logo because they looked too similar to 'Sky'.
Judges at the General Court of the European Union, based in Luxembourg, have now upheld the 2012 and 2013 decisions by the trademark office – which sided with the Murdoch corporation.
Tuesday's ruling will prevent the Skype name from being registered in Europe, but will not block its use by the company.
“Conceptually, the figurative element conveys no concept, except perhaps that of a cloud,” judges said of the bubble-design logo.
“[That] would further increase the likelihood of the element 'Sky' being recognized within the word element 'Skype', for clouds are to be found 'in the sky' and thus may readily be associated with the word 'sky'.”
Skype was created by Danish entrepreneur Janus Friis and Swedish tech guru Niklas Zennström and was first released in 2003. The video calling service is used by millions of people worldwide for online video chats. The company was bought up by US corporation Microsoft in an $8.5 billion deal in 2011.
“The case was not a legal challenge to Skype's use of the mark, it was only against the registration. We're confident that no confusion exists between these brands and services and will appeal. This decision does not require us to alter product names in any way,” a Microsoft spokeswoman told BBC News on Tuesday and said the company intended to appeal the ruling.
It is not the first time Sky has been embroiled in a legal battle. Last year, the High Court in London forced Microsoft to change the name of its cloud storage service SkyDrive to OneDrive, citing trademark infringement.
“Sky notes today's decision from the General Court of the European Union,” the firm said in a statement on Tuesday.
“This relates to a long-running dispute with Skype over the extension of its trademark applications to cover a broad range of goods and services that overlap with Sky's own trademark registrations. (…) Our intention has been to protect the Sky brand with our research showing that similarities in name and logo have the potential to confuse customers,” it added.