British broadcaster BSkyB has won round two in its trademark infringement battle with Skype.

The European Union General Court found on Tuesday that the two names are too similar and could cause confusion. In 2012 and 2013 the Office for Harmonisation in the Internal Market (OHIM) upheld Sky’s complaint, but Skype then appealed to the EU court.

In today’s decision the court said that there were a number of contributing factors to its decision - in particular, their “degree of visual, phonetic and conceptual similarity”. Skype has attempted to argue that the “pronunciation of the vowel ‘y’ is no shorter in the word ‘skype’ than it is in the word ‘sky’.”

Skype also copped it over its cloud-shaped logo which the court found would be reminiscent of the standalone word "sky".

The argument that the word "skype" is highly distinctive and had even entered the lexicon for identifying voice over IP services was dismissed by the court.

Skype has one last lifeline - it can appeal to the European Court of Justice, but only on points of law and within the next 2 months. Calls to Skype and parent company Microsoft for comment were not returned at time of publication.