In exchange for the payment, Lindows--which recently"Linspire" to work around European trademark suits--will give up the Lindows name and assign related Web domains to Microsoft, according to the registration statement Lindows filed with the Securities and Exchange Commission.
"We are pleased to resolve this litigation on terms that make business sense for all parties," Lindows CEO Michael Robertson said in a statement. "Over the next few months, Lindows will cease using the term Lindows and transition to Linspire globally as our company name and primary identifier for our operating system product."
Tom Burt, vice president and deputy general counsel for Microsoft, said in the statement that agreement meets Microsoft's goals for protecting the Windows name. "We are pleased that Lindows will now compete in the marketplace with a name distinctly its own," he said.
shortly after company founder came out with a version of the Linux operating system outfitted with a user interface intended to mimic the look and feel of Microsoft's dominant Windows. The software giant contended the Lindows name infringed on its Windows trademark, while Robertson claimed the trademark was invalid because "window" was a generic computing term long before Microsoft claimed it.
The U.S. trademark case has dragged on for more than two years, with the court refusing to impose an injunction on Lindows andon several other matters.
Microsoft has been more successful, winning injunctions from several European courts and forcing Lindows to adopt the Linspire name for most of its products.
Lindows will complete the transition under the terms of the settlement, which the companies agreed to Friday, according to the SEC filing. The deal calls for the company to permanently change its corporate name and drop all "Lindows" references from its products by Sept. 14. Lindows will also drop any petitions for trademark protection for the name, along with abandoning any legal cases based on the name.
The settlement also covers Windows Media components included in early versions of the Lindows OS. Lindows agreed to drop disputed files from its software in exchange for a limited four-year, royalty-free license to "certain Windows Media software components."
The SEC filing also revealed terms for Lindows', with the company set to offer 4.4 million shares at a price $9 to $11 per share.