In April One Direction US sued the record mogul for $1 million in damages and demanded an immediate injunction to the use of the name, claiming that One Direction UK's foray stateside has resulted in confusion amongst fans. The band cited in particular a segment on NBC's Today where music from the US group was shown over footage of the British teen-pop band.
The Hollywood Reporter reports that Cowell's label Syco and Sony Music Entertainment have launched counterclaims that argue that the US band have "devised and perpetrated a scheme to exploit the goodwill" of their UK counterparts, and that the Brits are the real ones who are in genuine threat of missing out on revenue due to confusion.
In the original lawsuit, One Direction US pointed to the release of their album The Light on iTunes in February 2011, more than a year before One Direction UK launched their debut Up All Night in the US.
Syco and Sony Music Entertainment's counter-argument is that YouTube videos of the UK band's appearances on The X Factor UK had been circulating worldwide as early as September 2010.
The US band have been the subject of hate mail and death threats since the announcement of the lawsuit. However, the band insist that they will "not be pushed around" by Cowell and his label.
The UK band have so far proved a huge success Stateside, becoming the first UK group in history to top the Billboard 200 chart with their debut album.
Watch the video for the American One Direction's single '2012' below: