This is not the first legal clash between the two companies.
In 2014, Microsoft changed the name of its cloud storage service from SkyDrive to OneDrive after the High Court in London ruled Sky's trademark had been infringed.
However, a spokeswoman for Microsoft said it was not now facing the prospect of another imminent rebrand: "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.".
Microsoft believes it still has the means to prevent anyone else from trying to call their product Skype.
A further appeal is therefore likely, to the European Court of Justice itself, even if only on the basis that the Skype brand is now worldwide and must be of huge value.
The judgement prevents Microsoft from registering a trademark for Skype's name and bubble-design logo.The US company intends to appeal against the decision. Judges at the General Court of the European Union said: "Conceptually, the figurative element conveys no concept, except perhaps that of a cloud." "[That] would further increase the likelihood of the element 'Sky' being recognised within the word element 'Skype', for clouds are to be found 'in the sky' and thus may readily be associated with the word 'sky'."