Under the terms of the confidential agreement, Savvysoft has agreed to change the name of its TurboExcel product to Calc4Web, although neither company admits any liability.
"Resolving this dispute is in the best interest of our customers," said Rich Tanenbaum, president and founder of Savvysoft.
"Much more can be gained by everyone if Savvysoft and Microsoft enjoy a mutually beneficial relationship."
The amicable settlement will see Calc4Web marketed on Microsoft's Office Marketplace website and at industry conferences.
Redmond originally filed the action against Savvysoft two and a half-years ago.
At the time Tanenbaum claimed that Microsoft had never been granted a registered trademark for Excel and that it had waited 19 years to apply for one.
He also pointed to the existence of more than 100 third-party products with 'Excel' in their name, a dozen of which were available to download on the Microsoft website.
A Microsoft official said: "This agreement protects Microsoft's intellectual property rights associated with the name of its trademarked Excel spreadsheet software, while ensuring that Savvysoft can continue to innovate."
Savvysoft's Calc4Web is an Excel-based robotic programmer that lets users write programs in C++ using only an Excel spreadsheet.
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iTnews Executive Retreat - Security Leaders Edition
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