This September Microsoft officially announced they were renewing the Killer Instinct trademark. The first solid piece of evidence that Microsoft were indeed considering a return of the old Rare fighter. However, what the legal department at Microsoft failed to realised that the trademark was already taken by a Fox TV series with the same name that aired 13 episodes in 2005. Oops.
The USPTO ruled that the TV series albeit cancelled after just 13 shows, and highly unlikely to ever be brought back still holds the trademark. You can read the full verdict here.
Whether this puts a halt to Microsoft's plans remains to be seen, but if they are bringing the game back a slight alteration of the title may be necessary.