Ray Ozzie's plan to build a major software development operation in Cambridge, Mass., has run into a roadblock in the form of a lawsuit filed by database provider InterSystems which doesn't want the software colossus as a neighbor.

InterSystems, a longtime occupant in the building at One Memorial Drive in the shadow of MIT, maintains that it, and not Microsoft, has rights to space in the building that Microsoft is planning to use. Also galling to InterSystems is that Microsoft is planning to install a large sign on the outside of the building.

"We want to stay in our building," InterSystems' Paul Grabscheid, vice president of strategic planning, told the Boston Globe. "It's very much our home. The idea of coming to work every day under a Microsoft sign is not so appealing to us." InterSystems was founded in 1978 by Phillip "Terry" Ragon and has grown rapidly in recent years and has 22 worldwide offices and assets of more than $220 million.

In recent months, Microsoft has moved to beef-up its presence in Cambridge, following founder Bill Gates' retirement from day-to-day management and the appointment of Ozzie as Microsoft's chief software architect. Ozzie worked at Lotus Development Corporation in Cambridge for years and now maintains dual offices at Microsoft headquarters in Redmond and also in Massachusetts.

Microsoft has indicated that it plans to go ahead with its plans at One Memorial Drive in spite of the InterSystems litigation. A Microsoft spokesman said the company has a "valid lease" that it negotiated in "good faith." One filing in the case in Middlesex Superior Court maintains that InterSystems missed a deadline to retain rights to some space in the building.

Currently, the two firms occupy large swathes of space in the building. Microsoft's planned expansion would give it more space in the building than InterSystems has.

Cambridge is the cradle of modern computing with MIT and Harvard students and researchers contributing key innovations. IBM did pioneering work at Harvard with its Mark family of early machines and MIT contributed important work in the 1950s and 1960s that enabled IBM to move to the forefront of computing. And, of course, Microsoft founders Bill Gates and Paul Allen carried out their pioneering software work at Harvard using Digital Equipment gear.

Microsoft has been building its Boston Concept Development Center in the building under the direction of Reed Sturtevant, who worked at Lotus with Ozzie. The company has also recently established a major basic research center in Cambridge -- one of six the company operates around the world.