Rupert Murdoch claims to own the 'Sky' in 'Skype'

Rupert Murdoch’s BSkyB is fighting a legal battle with the internet telecommunications pioneer Skype, claiming that it owns the “Sky” in “Skype”.

Skype yesterday announced that it plans to float on the Nasdaq stock exchange in New York. BSkyB’s legal challenge to Skype using its name within the EU was revealed in the 250-page document announcing the intended flotation.

Skype notes that its applications “in respect of the Skype name are being opposed by BSkyB plc”.

The company says that it has won the right to use its name in Switzerland, Turkey and Brazil, but that the European Union has ruled against it. Skype intends to appeal the decision “if necessary to the General Court at the Court of Justice of the European Community”.

If defeated in court, the company could be barred from trading under its own name if it is found to be in competition with Sky. The two companies operate in the field of telephony and could, therefore, be considered competitors, leading to possible confusion in the market-place.

The Name Inspector, a company name analyst blog, told paidContent:UK: “On the Skype forum, an employee reveals that the name was derived from the expression sky peer-to-peer.

“Some people might interpret Skype as a more conventional blend of sky with something that rhymes with Skype, like hype–or pipe, ripe, type, wipe.”

A spokesman for Sky confirmed that the company has been involved in a “five-year dispute with Skype” over trademark applications filed by the telecomms company. These are, the spokesman added: “including, but not limited to, television-related goods and services.

“The key contention in the dispute is that the brands ‘Sky’ and ‘Skype’ will be considered confusingly similar by members of the public. This was supported by consumer research conducted by Sky, and which was taken into account by the relevant authorities when they recently found in Sky’s favour.

Sky pointed out that, at this stage it has not brought any proceedings for trade mark infringement against Skype and its action is aimed at seeking assurances that Skype will not register trademarks in areas where it would come into competition with Sky.

In the document, filed earlier this week, Skype noted that, if it were unsuccessful in registering its trademark, it “may have a material adverse effect on our business. Moreover, a successful opposition to our application in one or more countries might encourage BSkyB or other third parties to make additional oppositions or commence trademark infringement proceedings.”

The document also carried the warning that, if BSkyB were to pursue litigation, the defence could be “costly and time consuming even if we were ultimately to prevail.

“If we were not ultimately to prevail in any such litigation to prevent our use of the Skype name or logo, we could be precluded from using the Skype name or logo in one or more jurisdictions without obtaining a license from BSkyB or such other third parties, which license may not be available on commercially reasonable terms or at all, which could have a material adverse effect on our business.”

This newspaper reported yesterday that Skype, formerly owned by eBay, has 560 million registered users, and has logged 95 billion minutes of voice and video calls in the first half of 2010.

It was bought by a consortium led by Silicon Valley venture capitalists Silver Lake with Andreessen Horowitz, a fund which was set up by the web browser pioneer Marc Andreessen.

A spokesman from Skype was unavailable for further comment yesterday.