So, that's bullshit.
I'm guessing registering a trademark is different than simply putting out a product, but how is this rejected based on a cancelled 2005 show (that no one remembers), and yet Wipeout gets to make a game when there's been a ton of Wipeout racing games for about a decade before the show game came out?
Hopefully this doesn't put Microsoft off of still making it. I don't see the reason why they need a trademark anyway.
Also, isn't the phrase "Killer Instinct" just something that belongs to everyone? I'm pretty sure this came up before, where similar trademarks for common phrases were rejected on the basis of being too common.