Microsoft has agreed to change the name of its SkyDrive cloud storage service after an embarrassing retreat from a trademark battle with UK media giant, British Sky Broadcasting Group (BskyB).

A UK court ruled against the US firm on June 28 in a case that dates back to 2011. BskyB had claimed that the SkyDrive name would cause confusion with the branding of its own online services.

Originally, Microsoft had said it would appeal against the judgment, a stance it has decided to abandon after the firms arrived at a joint agreement. The UK court judgment extends ot the whole of the EU, hence the global problem for Microsoft.

"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," BSkyB said in a statement.

"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 concurred. "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 will be given some time to change SkyDrive’s name. Microsoft has offered no clues as to the name change it has in mind but the case is the second time it has had to back down over branding in a year.

Last August, the firm abruptly dropped the ‘Metro’ moniker from its Windows 8 interface and apps after a rumoured clash with a European partner, Metro Group.

Regardless, Microsoft will have to think carefully about SkyDrive’s replacement, which many consumers have only recently become used to. It’s unlikely to be strongly connected to the Windows brand as it might have been in the recent past; the consensus is that Redmond wants to move away from channelling its entire identity through the waning power of its desktop operating system.