Lady Gaga may call her fans "little monsters" but it appears she has no love for Moshi Monsters, after taking legal action in an effort to stop the children's social network using an animated character, singer Lady Goo Goo.

The Paparazzi singer gained an interim injunction against the parent company of the wildly popular Moshi Monsters, banning Lady Goo Goo from performing songs on YouTube, the Guardian has learned.

The Lady Goo Goo character became an internet hit in the summer with the release of a music video called The Moshi Dance on YouTube.

Moshi Monsters had planned to release the song on iTunes, via a new division, Moshi Music, designed to exploit its animated characters, and launch an album of Moshi music later this year.

The character also sings a song called "Peppy-razzi".

Justice Vos, in the High Court on Monday, said that Mind Candy, Moshi Monsters' British parent company, cannot play or offer the parody song for sale. But he also ruled that Lady GooGoo could still appear in the Moshi Monsters game – without the song.

Lady Gaga's injunction bans the company from "promoting, advertising, selling, distributing or otherwise making available to the public The Moshi Dance or any musical work or video that purports to be performed by a character by the name of Lady Goo Goo, or that otherwise uses the name Lady Goo Goo or any variant thereon".

Lady Goo Goo

The Lady Goo Goo character is one of dozens of "moshlings", characters that players can adopt and care for. Other familiar names include Dustbin Beaver of the "MopTop Teenybop" species, based on the floppy-haired teenage pop star Justin Bieber.

Lawyers said this was an important example of the use of trade mark law that could impact tribute acts and parodies.

"Tribute bands and parody songs have been around for years but what this case shows is the potential power of registered trademark law to put a stop to some of their activities," said Alastair Shaw, counsel at law firm Hogan Lovells.

"This may be particularly important for tribute acts or characters with names which are similar to the original acts, as they frequently are, who want to comercialise a track parodying a well-known song."

Last year's viral hit Newport State of Mind – a parody of Alicia Keys and Jay-Z's hugely successful single New York State of Mind – was forced off YouTube after the seven co-writers of the original song declined to give their permission for this use of their intellectual property.

However, under the recommendations of an overhaul of UK copyright law by Prof Ian Hargreaves this type of parody will become legitimate.

Solicitors Mishcon De Reya, representing Lady Gaga's Ate My Heart Inc, and Clintons, representing Mind Candy, confirmed the interim injunction but offered no further comment.

Lady Gaga submitted evidence that suggested some consumers had already been confused that there was an official connection – the American singer released the single Paparazzi in 2008 from her debut album The Fame.

Moshi Monsters has become something of a phenomenon since being launched in 2008, and has more than 50 million children registered as users. The brand has extended to a magazine – the first officially audited figures of the title in June revealed sales of more than 113,000 – and the development of Moshi TV.

Lady Gaga's move comes a month after Mind Candy announced the imminent launch of the TV initiative, described by the company as "YouTube meets Nickelodeon", which appears to have been a brand extension too far for her legal representatives.

Michael Acton Smith, founder and chief executive of Mind Candy, said the court ruling was a "huge disappointment".

"It's pretty obvious that kids will be able to tell the difference between the two characters," he said. "The shame is that millions of kids fell in love with Lady Goo Goo's debut single on YouTube and now won't be able to enjoy her musical exploits. It was all done in the name of fun and we would have thought that Lady Gaga could have seen the humour behind this parody."

Lady Gaga is developing a reputation for being tough on companies looking to cash in on her brand and image. Earlier this year she threatened legal action against Baby Gaga – ice-cream made from human breast milk, blended with vanilla pods and lemon.

The letter arrived at the Covent Garden store a week after Westminster Council's food standards department had cleared the shelves to test whether it met hygiene requirements.

Matt O'Connor, owner of the Icecreamists parlour in Covent Garden, said Lady Gaga claimed the company was trying to "ride the coattails" of her reputation.

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