The U.S. Patent and Trademark Office has reversed course on its earlier move to grant Dell trademark rights to the term "cloud computing."

Dell received a preliminary notice on July 8 saying it could have the trademark, but it was withdrawn on Thursday.

Dell spokesman Jeff Blackburn said the company could not speculate on the likelihood of the trademark being eventually approved. "We are waiting just for the decision," he said.

The Patent Office declined to comment on the specifics of Dell's application, but Cynthia Lynch, an administrator for trademark policy and procedure, said the notification said it was an indication that her employer will deny a trademark or offer an "explanation of what [problems] were identified and give the applicant a chance to respond to that."

Lynch said that process usually takes a few weeks. She said, "...it's not unheard of, but it's definitely unusual," for a so-called Notice of Allowance for a trademark to be cancelled.

Dell's attempt to trademark the term has stirred rancor among others involved in cloud computing, including Jon Brody, vice president of marketing for TriCipher.

"I'm surprised and disappointed," by Dell's trademark application, said Brody, whose company provides a unified authentication infrastructure for software as a service customers and providers. "Vendors need to name their products, there's no question about that, and there's unfortunately product-specific taxonomy. But broad terms like cloud computing--those are canvasses that we should all be able to paint our piece of the mural on."

Blackburn explained that when Dell applied for the trademark on March 23, 2007, it had just announced its Cloud Computing Solutions, which now bears a trademark symbol. "The application was to protect the use of the term 'cloud computing' as it relates specifically to our offering," he said. "At the time when we announced our solution, it was not quite as pervasive a term. We sought to protect our intellectual property, and we certainly respect the intellectual property of other people and would not infringe on that of others."

Dell's definition of the term "cloud computing" includes the "design of computer hardware for use in data centers and mega-scale computing environments for others" and "consulting services for data centers and mega-scale computing environments in the fields of design, selection, implementation, customization and use of computer hardware and software systems for others."

Trademarking the term could impact a market growing at a furious rate: the consulting firm Gartner reported in October of last year that software as a service is expected to have a compound annual growth rate of 22.1 percent through 2011 for the enterprise application software markets, which is more than double the growth rate for total enterprise software.

"If you have a federal registration, it gives you some legal presumptions and benefits you don't have otherwise," Lynch said. "You're presumed the nationwide, exclusive owner of the goods that you have marks registered for."

Though the trademark refers to the term itself and not to the underlying technology, Dell's registration would still impact his business, Brody said.

"We're an enabler for the cloud computing businesses, so we'd have a hard time talking about the space we're in and the specific product we deliver," he said. "Rather than thinking about what a customer needs, marketers have to think long and hard about the words they use--what a waste of time."