UPDATE 2-US research firm countersues Web retailer Overstock

(Adds Overstock comment, trial date, byline)

NEW YORK, April 15 (Reuters) - Gradient Analytics Inc has countersued OSTK.O and the company's chief executive, Patrick Byrne, contending they waged a smear campaign after the research firm published unflattering reports about the online retailer.

In a 2005 lawsuit, Overstock accused Gradient of conspiring with hedge fund Rocker Partners, now known as Copper River Partners, to write negative research reports about the retailer and drive down its stock price. The hedge fund took a short position in the stock, which allowed it to profit from the stock decline, according to Overstock’s claims.

Gradient said it filed its lawsuit on Monday after the California Superior Court granted its motion to bring the counterclaims. It accuses Byrne of libeling the research firm in remarks made to reporters, money managers and market analysts during conference calls and media interviews from 2004 to 2006.

“Public companies cannot have license to libel research firms and use litigation to retaliate against analysts who are critical of their business,” Gradient President and CEO Brad Forst said in a statement on Tuesday.

The research firm accuses Overstock of defamation, tortuous interference with prospective business relations, and unfair business practices.

Overstock General Counsel Mark Griffin said there was “nothing new in this cross claim” and that the company was studying whether it could have the research firm’s lawsuit dismissed.

“We knew this was coming. It has been filed late in the proceedings,” he said. “We have been going more than two years defeating Gradient at every stage of the litigation. All major court contests Overstock has won. We fully expect to win this one.”

Overstock’s lawsuit is set to go to trial on Sept. 9.

Shortly after Salt Lake City-based Overstock brought the case in 2005, the U.S. Securities and Exchange Commission launched a probe into whether Scottsdale, Arizona-based Gradient helped manipulate stocks.

In February 2007, the SEC informed the research firm that it had ended the investigation and no enforcement action had been recommended, according to Gradient.

Overstock shares were down 2.3 percent to $13.49 in Tuesday afternoon trading on the Nasdaq. (Editing by Derek Caney and Tim Dobbyn)