A New Zealand library trust has won its bid to stop an American software company trademarking the name Koha.

In 2011, software company Liblime attempted to adapt and trademark a free software search system developed by the Horowhenua Library Trust 14 years ago named Koha.

Koha is now widely used by libraries, churches, schools and corporations around the world.

The trust and Catalyst IT, a company in Wellington which specialises in free and open source software, challenged the move.

Two years later, developer Chris Cormack said Catalyst was advised late on Wednesday it has won the fight.

"If the trade mark had been given, then potentially Liblime could have restricted the use of who used it so, the utter worst case was perhaps we would have had to rename the software in New Zealand which would have caused massive confusion."

Mr Cormack said the win is a relief.