How Microsoft blundered with the SkyDrive brand

Unbelievable that Microsoft did not see this coming, says expert, citing past Metro fiasco

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That leaves out a simple oversight, but puts the spotlight on a grievous error of judgment: After recognizing that Sky was a risk, Microsoft proceeded anyway, confident in the legal team's analysis that it was unlikely the U.K. communications company would prevail if a dispute went to court.

Christine Farley, professor of law at American University, said that made sense. "I'm sure [Microsoft] was aware of these marks, but the fact is, you really cannot choose a descriptive term or trademark that is clear worldwide."

But Microsoft blundered when it took that risk because, in the end, it lost in court.

"They could have avoided this at the front end by buying the mark," said LaMotte, referring to a deal, even a preemptive one, that Microsoft could have made years ago with Sky.

Microsoft's options

So what is Microsoft to do?

The joint statement notwithstanding, some bet that Microsoft would hand Sky a basket of money to retain the SkyDrive name.

"They could take that money [they'll spend on rebranding] and give it to Sky," Moorhead said. When asked about the joint statement, which said Microsoft was going to transition to a new brand, he scoffed. "You aren't going to lead with the notion that you'll pay for it," he said. Instead, Microsoft would say that it was planning on rebranding to gain what leverage it could for future negotiations.

LaMotte also thought it possible Microsoft would pay Sky rather than go through the hassle and expense of coming up with a new name for the service. "They may decide it will save them in the end to pay a sizable fee to Sky, or reach some kind of annual licensing agreement," said LaMotte.

Priest didn't agree. "I think it would be difficult for Microsoft to pay a fee and receive an ongoing license," he said. "Because you're not just licensing the mark, but also the good will of that name."

In other words, Priest believed it very unlikely that Sky would put its brand at risk -- especially since it's already taken the very expensive step of litigation and won the case in court -- by agreeing to put its brand's reputation in Microsoft's hands.

Assuming Microsoft does pull the rebranding trigger, Farley suggested how the company might avoid another fiasco. "Microsoft must be more creative in the trademarks that they select," Farley said. "Their brands typically say what they are, and as long as they continue using those kinds of trademark they are going to have trouble."

Such trademarks, called "descriptive trademarks," rely on words which have a dictionary meaning -- like "Sky" -- that have become associated with a product simply because of long use. Descriptive trademarks are among the weakest on the trademark scale.

"Microsoft needs to come up with a unique word or term, then spend money to educate consumers," Farley added.

Moorhead put it in perspective. "Microsoft really blew some basic brand blocking and tackling," said Moorhead. "This was a major gaffe, but I don't think it will leave a long-term scar. I really think this won't be a tremendous loss. SkyDrive is not ingrained in the minds of people, like Office and Windows are. In a few years, no one will remember this."

This article, How Microsoft blundered with the SkyDrive brand, was originally published at Computerworld.com.

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at  @gkeizer, on Google+ or subscribe to Gregg's RSS feed . His email address is gkeizer@computerworld.com.

See more by Gregg Keizer on Computerworld.com.

Copyright © 2013 IDG Communications, Inc.

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