Microsoft has settled its trademark infringement suits against Lindows.com with a US$20 million payment to the Linux company which agreed to change its name to Linspire.
According to reports, details of the settlement were disclosed in documents Lindows filed with the US Securities and Exchange Commission in conjunction with the company's plans for an IPO.
In a statement, Lindows CEO Michael Robertson said: "We are pleased to resolve this litigation on terms that make business sense for all parties".
"Over the next few months, Lindows will cease using the term Lindows and transition to Linspire globally as our company name and primary identifier of our operating system product," he said.
The settlement agreement resolves all claims in this litigation in the United States and internationally, Microsoft said.
Tom Burt, Microsoft corporate VP and deputy general counsel, said "The case was centred on the fundamentals of international trademark law and our necessary efforts to protect the Windows trademark against infringement."
"This settlement addresses those concerns, and we are pleased that Lindows will now compete in the marketplace with a name distinctly its own," he added.
According to an Associated Press report, Lindows has 60 days to cease using the name on its products. The report said that Microsoft would pay Lindows US$15 million over the next 30 days and a further US$5 million once Lindows transfers control of most of its Lindows-related web site names over to Microsoft.
Lindows has four years to use its web addresses www.lindows.com and www.lindowsinc.com, the report said.
Lindows has been wrestling in the courts for the past two years with Microsoft over the trademark issues.
Microsoft first filed to sue the company in 2001 in the US District Court, alleging its name infringed on its trademark for the Windows operating system.
Similar complaints were filed in Canada and Europe and the software giant won preliminary injunctions in Finland, Sweden and the Netherlands.
In mid-April, Lindows changed the name of its Linux desktop operating systems from LindowsOS to Linspire.