Swiss firm Ethical Coffee Company said on Monday it had lodged a complaint in a Paris court against Nestle for patent infringement with its Nespresso coffee machines.
Ethical, which makes coffee capsules that can be used in Nespresso machines, said in a statement that it had suffered losses of at least 150 million euros ($174 million) since 2010 as a result of the move.
Nestle, the world's leading food company, has a lion's share of the multibillion-dollar single-serving coffee market.
Nestle is accused by ECC of modifying the Nespresso machines to keep competitors’ capsules out of them with a "harpoon" device in its new Pixie range which jams the capsules.
ECC said this move went against its patent.
The company added that a decision by the Paris court would only apply to the ECC patent violation in France, but it could launch similar legal action in other countries.
Nespresso in an email to AFP denied any patent infringement and said it would fight the case in court.
In June last year, ECC won a legal suit against Nespresso in France when a Paris trade tribunal ruled against the giant in an unfair competition suit filed in 2012.
It ordered Nespresso to pay 500,000 euros to ECC and 40,000 euros more to cover legal fees.
Jean-Paul Gaillard, chairman and chief executive of Ethical Coffee, helped create the single-dose coffee market as chief executive of Nespresso.
He then launched the cheaper Ethical brand to counter Nespresso, which is aimed at more top-end consumers.
After a sluggish start following its launch in 1986, Nespresso suddenly took off in the late 1990s, fuelled by an advertisement blitz featuring Hollywood superstar George Clooney.