Universal Tube & Rollform Equipment Corp, a small Ohio-based manufacturer that employs just 17 people, claims its website became a victim of YouTube's success after being engulfed by 68 million hits in August.
It says the cost of maintaining its own website - utube.com - exploded from $19 a month to more than $3,000 a month after users mistook it for youtube.com.
Ralph Girkins, Universal Tube’s president told Times Online: "We tried to talk to YouTube, but there wasn't very much conversation at all. I'm leaving it to the lawyers now."
His company this week filed a lawsuit in the US District Court, demanding that YouTube either abandon the youtube.com domain name, or stump up the cost of finding an alternative to utube.com, which it claims predates the video-sharing site by a decade.
The issue highlights the bandwidth costs facing YouTube, which Google has agreed to buy for $1.65 billion in shares. YouTube is yet to post a profit but analysts estimate that the site, which downloads more than 100 million videos a day, has had to pay at least $1 million (£524,000) a month to make its content accessible.
When millions of visitors mistakenly opted to go to utube.com, a portion of those costs were transferred to Universal Tube & Rollform Equipment, whose site suddenly became one of the most popular manufacturing destinations on the web.
The legal wrangle is the latest in a string to hit YouTube, which has faced action from a number of content owners who have alleged the site is hosting pirated material.
In Britain, the Premier League is taking action to prevent clips of football matches being posted on the site. YouTube recently pulled down around 30,000 clips after being asked to by copyright owners in Japan.
This week, Comedy Central, the US television group behind the The Daily Show With Jon Stewart, The Colbert Report and South Park, became one of the latest content owners to demand that YouTube remove thousands of clips of its material from the site.
Comedy Central has its own website, Motherload, where viewers can access material from its shows. It also sells programmes through Apple's online store, iTunes.
The move has sparked a debate among analysts on whether YouTube would be able to survive without the kind of "watercooler" clips that have played a large part in its meteoric rise. Many have suggested that Google has massively overpaid for the two-year-old company.
However, reports have since suggested that Comedy Central owner Viacom has relented on the request, allowing shorter clips to remain on YouTube, prompting speculation that Viacom and Google are exploring ways to win advertising revenues from the web.
Such a move would underscore the growing power of online video services as consumers alter their viewing habits and advertisers follow them by moving away from traditional broadcasters.
Viacom told the industry news website Red Herring.com: "We want our audiences to be able to access our programming on every platform and we're interested in having it live on all forms of distribution in ways that protect our talented artists, our loyal customers and our passionate audiences."
Piracy is a problem across the so-called web 2.0 sector, of which YouTube has been a posterchild. Earlier this week, MySpace.com, the social networking site said it had licensed technology from Gracenote, the online music database, which will aim to block copyrighted tracks being posted on its site.
YouTube has said it is exploring a similar system and has also forged agreements that allow it to carry copyrighted content legally in return for a portion of its advertising revenues.
My Space is owned by News Corporation, parent company of Times Online.
No responsibility can be taken for the content of external Internet sites.