Microsoft made to rename Skydrive after BSkyB victory
Microsoft is changing the name of Skydrive, its cloud storage service, after a legal challenge by BSkyB.
It follows a High Court ruling in June that the name infringed the broadcaster's trademark.
The judge had said there was evidence Skydrive's name had caused confusion among the public.
Microsoft had originally said it would appeal. The tech company said it has now agreed to change the name worldwide after a "transition period".
In a joint statement, Microsoft and BSkyB said: "The settlement of this case reflects the desire of both companies to focus on joint projects to benefit their customers."
UK owners of Microsoft's Xbox 360 can access Sky's channels via the games console and there have been reports that the two are in talks for a deeper tie-up with the forthcoming Xbox One.
Although BSkyB ended its Store & Share cloud storage service at the end of 2011, it had argued that Microsoft's use of the word "sky" in its brand posed a problem since it still ran other digital services including its Sky Broadband and Sky Go video streaming products.
In her ruling, the judge noted that customers having problems with Microsoft's product had ended up calling the broadcaster's helpline in the mistaken belief it was responsible for the service.
It marks the second time in recent months that BSkyB has successfully defended its trademark against a tech company.
At the end of last year Livescribe - the US maker of products that record a digital version of their owner's handwriting - pulled its Sky pen from UK stores after receiving a legal challenge from the broadcaster.
In February it announced that it was rebranding the device as the "Livescribe wifi smartpen" and had agreed to recall stock using the old name.
Microsoft had to make another name change to one of its products recently.
It had originally called its Windows 8 tile-based user interface Metro to distinguish it from the more traditional desktop option.
However, last August it began calling it the "Windows 8-style UI" instead. There were reports that the German retailer Metro AG had objected to the name.
Neither side confirmed this, but technology news site The Verge did report seeing an internal Microsoft memo that ordered staff to stop using the term after "discussions with an important European partner".