COLORADO SPRINGS -- This would have made a great story for The Wall Street Journal: A young company in the hinterlands comes up with a clever business idea -- and runs smack into the economic and legal clout of a New York corporate leviathan.

The only problem is that the tough guy in this business story -- albeit a somewhat reluctant tough guy -- is none other than The Wall Street Journal (or, more precisely, the Journal's corporate parent, Dow Jones & Co.).

It seems that a small publisher of educational materials here, Innovative Learning Concepts, started putting out a monthly newspaper for children last year. The firm hit on a catchy name for its publication: The Small Street Journal.

After the third issue, recalls Toni Knapp, "the Dow Jones legal department sent us a dry, crusty letter. They said 'We will take you to court to cause you to cease and desist publishing under that name.' "

The crusty letter complained that The Small Street Journal's name and masthead -- modeled on the front-page banner The Wall Street Journal has used for nearly a century -- constituted a violation of Dow Jones' trademark rights. The folks here gave some thought to the time and money it would take to get snarled in a lawsuit with a publishing titan like Dow Jones. Such thoughts prompted them to change the name of their children's newspaper to "Fun Day Times."

But some of the monthly's 50,000 subscribers complained. The editors, too, felt the new name lacked punch. This July, the publishers took a stand: They went back to The Small Street Journal. At the advice of counsel, though, they changed its front page banner to eliminate typographical resemblances to the famous Wall Street daily.

The initial reaction from Dow Jones was another crusty letter with another "cease and desist" demand. But this time the little guy stood firm -- and now Dow Jones has thrown in the towel. "Our concern was to protect our trademark and eliminate confusion," said Peter G. Skinner, a Dow Jones vice president. "We just received a copy of their new {banner} . . . and we think the chance of confusion with a Dow Jones publication is ameliorated."

At The Small Street Journal, the presses are rolling.