A US software company is threatening legal action against Microsoft after the giant chose its company name as the title for its next version of Windows.

Previously codenamed Longhorn, Microsoft announced late Friday that its upcoming operating system would be called Windows Vista - something that a company based in the same town as Microsoft's headquarters, Vista Inc. was not happy about.

John Wall, CEO of Vista Inc., said the company was "considering all of its options" for a potential case against Microsoft. Wall said the naming of Windows may violate a trademark his company has and potentially create confusion over the software and services Vista provides.

Vista provides small businesses with online information systems, including custom applications, as well as with consulting services. "If people call it Windows Vista, that’s not a problem," he said. "If people call it 'Vista,' that confuses it with our business and what we do."

Wall said Vista will be analyzing traffic to its website, www.vista.com, to see what effect the Windows Vista name may have on visitors to the site. If the effect is significant - that is, if a surge of visitors come to Vista.com looking for information about Windows Vista - the company may decide to take legal actions over the trademark.

One of the key tests for whether a new trademark can be challenged or not is if it creates confusion over another company's products and services, said Bill Lozito, president of Strategic Name Development, a brand naming consultancy in Minneapolis.

Vista potentially has a good case against Microsoft because its software and services are similar to what the software giant offers, he said. Because Microsoft is a larger, more recognisable company, the name confusion might drive some of Vista's potential customers to Microsoft.

The issue for Vista is particularly prickly because the company deals mainly in the small business market, a segment where Microsoft also figures prominently.

But then it can be guaranteed that Microsoft has already reviewed likely trademark issues surrounding the choice of its new Windows name and has a strategy in place. Not only that but there are dozens of businesses using the name "Vista", several of which work in the IT industry.

There are at least two other software companies named Vista Software, that might have a good argument against Microsoft, Lozito said. "Anyone using that name that’s doing business in this category runs the risk of being overshadowed by Microsoft Windows Vista," he said.

However, the presidents of the two companies called Vista Software, both of which provide add-on technology for Microsoft products, separately said their companies will most likely benefit from Microsoft's choice of name.

"Fortunately for our small company, all of our products are targeting the Windows platform, so I'm anticipating that the new 'Windows Vista' name will have a positive effect for us," said Steve Nerby, president of Arizona-based Vista Software Inc.

Anthony Carrabino, founder, chief executive officer and president of Lorant Corp.'s Vista Software in California, shares Nerby's sentiment. Carrabino said he "couldn't be happier" about Microsoft's choice of a name because his company's main product, Vista DB, is a database engine specifically engineered for Windows developers. In fact, the company has been working on the Longhorn release of Vista DB for more than three years.

Carrabino said the hits to his company's website have quadrupled since Friday when Microsoft announced the new name for Windows, and he hopes this increased traffic will introduce developers "in droves" to Vista Software's products.

A Microsoft product manager said his team came up with the name because it reflects the three main design principles of the next version of Windows, which is expected to be available in the last calendar quarter of 2006. The new OS would provide users with a higher level of confidence in the system; give them a clearer view of their information and files; and help them be more connected to other systems and other modes of communication. "When we take those all together, when I really think about my view into this world, my personal view of all this digital content, this is how we arrived at the name 'Vista,'" he said.

Even if Vista Inc. decides not to press forward with a trademark case against Microsoft, it will almost certainly benefit from the added exposure stories such as this one have given it.