G.ho.st, a startup that offers a hosted operating system, has accused Microsoft of violating a company trademark with its prominent use of the phrase "no walls" in its recently unveiled US$300 million Windows marketing and advertising campaign.

A letter from G.ho.st CEO Zvi Schreiber sent to Microsoft CEO Steve Ballmer last Tuesday asked the company to stop using the phrases "life without walls," "imagine without walls" and "imagine no walls" on its products, Web site, marketing materials, advertising and other promotions and agree in writing to stop using these phrases by the close of business last Thursday.

As of Monday, Microsoft was still using the phrases in its campaign. Microsoft spokesman Michael Marinello said via e-mail Monday that the company acknowledged it had received Schreiber's letter but "the allegation is without merit."

Schreiber said G.ho.st has been using the phrase "no walls" to describe its G.ho.st Virtual Computer product, which is a hosted OS that runs in a virtual environment and is what he calls a "conceptual alternative to Windows," since April 2007.

Microsoft's use of "life without walls," "imagine without walls" and "imagine no walls" and their prominence on the marketing campaign "are virtually identical ... to our trademark," he wrote.

However, according to a record with the US Patent and Trademark Office, G.ho.st has not yet officially trademarked the phrase and only filed an application to do so last Tuesday, the day it sent Microsoft the letter.

Schreiber also suggested in the letter that Microsoft's use of the phrase "is designed to scare off potential investors in G.ho.st or partners of G.ho.st and prevent us from giving our innovative Virtual Computer solution a fair chance in the market place."

In addition to no longer using the phrase, G.ho.st also has requested that Microsoft publish "in the same media where these marks were displayed or advertised" clarification that it has not licensed G.ho.st's technology or trademark and that it doesn't offer the same "features or benefits of the G.ho.st Virtual Computer. "

Additionally, G.ho.st is asking Microsoft negotiate a "good faith" license for the past use of what the company believes is its trademark.

G.ho.st did not respond to a request for comment Monday about whether it would take legal action against Microsoft to resolve the matter. The company was founded in 2006 and has about 40 employees in Israel and the West Bank.