By Tim Weber Business Editor, BBC News website

Google's Gmail account comes with 2.6 Gigabyte storage

Following a trademark dispute the mail account will be renamed Google Mail.

London-based Independent International Investment Research says it started using the Gmail name for a web-mail application two years before Google.

Current UK users of Google's service will be unaffected, but a separate trademark dispute forced Google to drop the Gmail name in Germany in May.

Talks between both companies broke down several months ago, after they failed to agree a financial settlement.

Gmail v Google Mail

Google's Gmail e-mail account is free, comes with just over 2.6 Gigabyte of storage space and allows users to view their e-mail with all messages on a single subject linked together.

We want to avoid any distraction to Google and to our users Nigel Jones, Google

In return, users have to live with the fact that Google's search engine analyses their e-mail and places small context-driven internet links next to their mail, some of which are paid-for adverts.

The service, launched on 1 April 2004, is officially still in "beta", a technical term to describe the test phase of a product.

In most countries Gmail accounts are available on an invitation-only basis, although existing Gmail users have been offered as many as 100 invitations to distribute to friends and family.

From Wednesday morning, new users in the UK signing up with the Google service will be given an e-mail address that ends with "@googlemail.com".

German users with this address report that e-mail sent to their username but ending with "@gmail.com" instead of "@googlemail.com" will still arrive at its destination.

Trademark dispute

The dispute between Google and Independent International Investment Research (IIIR) centres on who owns the Gmail trademark.

The London-based research firm, with a �3.24m ($5.6m) stockmarket value, says it has used the name "Gmail" since 2002 to describe the mail function of its online information tool Pronet, mainly used by investors in currency derivatives.

Companies like Citigroup, Deutsche Bank and Bank of America are among the British firm's clients.

After Google announced its Gmail plans in spring 2004, IIIR rushed to register the Gmail trademark with Ohim, the European Union's trademark office, and the US Patent and Trademark Office.

For our clients, Gmail is the most prominent function... it's a big green button that says 'Gmail' Shane Smith, Independent International Investment Research

Google, with a stockmarket valuation of $54.4bn (�31.1bn), disputes the trademark claim. IIIR "has failed to provide evidence of its common law rights to the name", said Nigel Jones, Google's senior European counsel.

But to "avoid any distraction to Google and our users", the company would switch to the Googlemail brand in the UK while the dispute was being resolved at the various trademark offices.

The case could still go to court, though. IIIR's chairman and chief executive Shane Smith told BBC News that Google broke off negotiations "unilaterally", and that his company was now investigating its legal options.

"For our clients, Gmail is the most prominent function of the Pronet tool, it's a big green button that says 'Gmail'," said Mr Smith.

Google's rival Gmail service had created confusion and uncertainty amid potential clients of his firm, said Mr Smith.

In Germany, Google is already in the courts over the Gmail name. On 13 September the US search firm lost an appeal against a court injunction that stops Google from using the Gmail brand in Germany.

There a Hamburg-based company had registered the term "G-Mail" five years ago, to advertise what it describes as a "hybrid mail service", bridging the gap between electronic and hardcopy mail.

Mike Lynd, partner at patent and trademark attorneys Marks & Clerk, predicted that "as a result of inadequate IP searching and protection" Google now had "a real battle on its hands in gaining the Gmail trade mark within the European Union".

'Exorbitant sum'

The breakdown of negotiations between Google and IIIR ultimately comes down to money and a disagreement about the value of the Gmail trademark.

IIIR boss Shane Smith points to an independent valuation of the brand, compiled in December 2004 by Valuation Consulting Limited, which suggests a value of between $48m and $64m, although he says his company would have settled for much less.

Google's Nigel Jones, however, says IIIR demanded an "exorbitant sum" in exchange for dropping its claim on the Gmail trademark.

Both sides are cagey about how much was at stake, but BBC News understands that a settlement worth millions of dollars had been discussed.

For now, though, Google will not be able to promote one of its most high-profile brands in two of Europe's largest economies.

Mr Lynd said Google might want to "cut their losses now and... look at re-branding to Google Mail within the whole of Europe".