Symantec sued software rival Microsoft on Thursday, accusing it of misappropriating trade secrets to develop its own competing features and products, including the next version of Windows.

The dispute centres around an August 1996 agreement between the two companies that granted Microsoft the right to use Veritas Software's volume-management technology in Windows product. The lawsuit filed in federal court in Seattle charges the world's biggest software maker with misappropriating intellectual property and breach of contract related to a licensing deal with Veritas, which Symantec acquired for $10.2 billion last year.

It also seeks an injunction that would block the further development, sale or distribution of Vista -- the already- delayed next version of Windows -- and other products until all Symantec intellectual property is removed.

"Microsoft's pervasive and continuing disregard of Symantec's intellectual property and contract rights has irreparably harmed Symantec and constitutes trade secret misappropriation," the complaint said.

Microsoft said in statement it worked hard to try to resolve the dispute and that it acted within its rights in the contract.

"We are confident that our actions are wholly consistent with the legal agreements between Veritas and Microsoft and that these claims will be shown to be without merit," Microsoft said.

The dispute pits two of the biggest consumer software makers against each other and centers on a Symantec product called Volume Manager, which allows operating systems to store and manipulate large amounts of data.

The complaint accuses Microsoft of improperly incorporating the technology into its own operating system products and seeks compensation as well as the removal of the intellectual property from the company's offerings.

The dispute centres around an August 1996 agreement between the two companies that granted Microsoft the right to use Veritas Software's volume-management technology in Windows product.