GOOGLE, the giant internet search engine, has been forced to drop its “Gmail” brand for new users in the UK by a minnow company that claims first rights to the name.

The US internet group said that after a year-long legal battle with Independent International Investment Research (IIIR) new UK users of its free e-mail service would receive an address ending in “googlemail.co.uk” instead of “gmail.com.”

The change is an embarrassment for Google, which has a market value of $85 billion (£48 billion). AIM-listed IIIR is worth only £3.3 million.

Pronet, a subsidiary of IIIR, had been operating its G-mail service for two years when Google’s founders launched their e-mail service in April 2004, amid much fanfare. Pronet uses the name to brand e-mails containing financial analysis for its clients — which then send the e-mails to their own clients in the UK, US and Asia.

The service has a total audience of about ten million people, Pronet said. Google refused to reveal the number of users of Gmail but said that “millions” of people had signed up to the service worldwide.

Neither IIIR nor Google have secured the registered Gmail trademark from the European Union. But IIIR said that it had applied to register the trademark in the US in April last year — about ten days before Google.

IIIR said that the EU regarded trademark application in the US as a crucial date when considering ownership.

Google had already agreed to stop using the Gmail brand in Germany after legal action.

The company said yesterday that it had opted to drop the Gmail name to new users in the UK because it was “the most simple solution” to its dispute with IIIR. Google said that it wanted to ensure there was no uncertainty for new UK customers signing up to its e-mail service.

The parties first discussed a financial settlement to the dispute but Google said yesterday that the amount sought by IIIR was exorbitant. IIIR said an independent assessor had told it that the rights to the name were worth at least $43 million.

IIIR said it hoped that Google would return to the negotiating table and agree a settlement for handing over rights to the Gmail name.

Google said that it would continue to pursue its trademark applications. It emphasised that existing Gmail users in the UK could keep their current e-mail addresses.