Rupert Murdoch claims to own the Sky in Skype

Satellite TV company BSkyB has launched a bizarre legal challenge to a well-known IP telephony service provider, claiming it owns the 'Sky' in 'Skype'.

The broadcaster - part-owned by media mogul Rupert Murdoch's News Corp - is contesting the use of the name in the European Union, India, Norway and Brazil.

The news has come to light as Skype makes the first move towards being listed on the US NASDAQ stock exchange.

In a list of risk factors for potential investors, Skype said that it had received a negative preliminary ruling last month on an application to trademark its bubble logo in the European Union. The application had been contested by BSkyB, asserting its rights to the trademark 'SKY'.

BSkyB is believed to have been pursuing its legal challenge since as far back as 2006.

Skype acknowledged that if successful, the challenge from the Dirty Digger's lawyers could mean the Internet phone company would be powerless to prevent other businesses from using the word 'Skype' - and might even have to pay BSkyB a licence fee to continue using the name itself.

According to an employee on the Skype forum, Skype's name comes from the expression "sky peer-to-peer".

Skype has successfully registered its trademark in Switzerland, Turkey and Brazil.

Skype, formerly owned by eBay, recently became the biggest carrier of Internet telephone services, with 95 billion minutes of voice and video calls logged in the first half of 2010. It has 560 million registered users.