A small design company in America has filed a lawsuit against Microsoft, alleging that it is unfairly using the Bing name for its search engine.

Bing! Information Design, based in St Louis, Missouri, launched a legal action last week in a local court - alleging that the multibillion-dollar software corporation "had knowledge of the mark" and "intentionally interfered" when it relaunched its search engine with a new name earlier this year.

Lawyers for the Missouri firm said that the action damaged the smaller company's business, and would seek punitive damages to "punish" Microsoft and deter other companies from acting in a similar manner.

"For nearly 10 years my client has been using the Bing! mark," said lawyer Anthony Simon in a statement. "My client selected this unique mark to distinguish itself in the marketplace and invested substantial time and effort promoting its business using Bing!."

"Microsoft's use of the identical mark and its aggressive advertising have gutted all of my client's efforts to distinguish its business and created confusion that must be remedied."

The situation may not be clear cut. The company says it has been using the name since at least 2000, and an application for the trademark outlines the use of the name Bing! for advertising and services for the advertising industry.

However, a trademark application for the name was not filed until May - when rumours about Microsoft's new product had already spread widely across the internet.

Microsoft, meanwhile, filed its own trademark applications for the name in March - for a variety of uses, including search engine software, interface software, advertising, telecoms and for "providing a website and website links to geographic information, map images and trip routing".

In addition, two other companies are also taking action against Microsoft over what they say are trademark infringements: a web-based shopping service called BongoBing and software company Terabyte, which has a product called BootIt Next Generation, or Bing for short.

Microsoft lawyer Kevin Kutz said that he believed the case would be dismissed because there was little confusion between his company's business and the St Louis firm.

"We believe this suit to be without merit and we do not believe there is any confusion in the marketplace with regard to the complainants offerings and Microsoft's Bing," he told the Register. "We respect trademarks and other people's intellectual property, and look forward to the next steps in the judicial process."

That assertion, however, may ring hollow for some - coming after a difficult week for the Seattle-based software company in which it admit having stolen computer code from a Canadian internet startup.

After allegations that a site developed by MSN China had lifted code from messaging website Plurk, Microsoft apologised for the transgression and said it was the fault of an independent contractor.

"It was never our intent to have a site that was not respectful of the work that others in the industry have done," the company said.

Plurk responded by saying it is still considering whether to take legal action.

