As part of the settlement, Amazon Bookstore will assign its rights to the Amazon name to Amazon.com. In turn, Amazon.com will license the Amazon name back to Amazon Bookstore.
In addition, the two sides vowed to work together to prevent the public from confusing their brands. In that line, Amazon Bookstore agreed to always refer to its company by its full name of Amazon Bookstore Cooperative.
The two sides did not disclose whether any money changed hands. As part of the agreement, Amazon Bookstore's suit against Amazon.com will be dismissed.
"This settlement allows an important, independent bookstore...to continue serving the local community and beyond using a name that is well known," Amazon spokesman Bill Curry said in a statement. "It also allows Amazon.com to continue focusing on providing the best shopping experience for its customers throughout the United States and the world."
Amazon Bookstore sued Amazon.com in April, alleging that the e-commerce giant had infringed on the company's trademarked name. Offering a collection of feminist books, Amazon Bookstore had been operating its brick-and-mortar store since 1970.
Amazon Bookstore president Barb Wieser said that prior to the lawsuit, the company was receiving 15 to 20 calls a day from people who were confusing the store with Amazon.com. Wieser said that until the lawsuit Amazon.com had ignored her store's complaints about the confusion between their respective names.
"I'm happy that we settled the suit," Wieser said. "It's good for the bookstore."
Although the two sides declined to discuss the details of the settlement, attorney Rich Gray of Outside General Counsel of Silicon Valley said Amazon.com probably paid Amazon Bookstore for the Amazon name.
"Reading the tea leaves, Amazon cleaned up a somewhat thorny legal issue and a public relations nightmare, but I suspect that they paid a sum of cash," Gray said.
News.com's Greg Sandoval contributed to this report.