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Microsoft settles trademark case

The software giant is paying $5 million to settle a trademark dispute challenging its use of the name "Internet Explorer" for its Web browser.

Microsoft said it has settled a trademark dispute that had challenged its use of the name "Internet Explorer" to market its popular Web browser. Sources close to the matter say the settlement will have the software giant paying $5 million for rights to the name.

"This will clear up any questions about Microsoft's right to use the name 'Internet Explorer,'" said Microsoft spokesman Jim Cullinan.

As previously reported, software developer Dhiren Rana sued Microsoft in late 1995 for trademark infringement a few months after the company began marketing its new browser under the name Internet Explorer. Rana alleged that, beginning in 1994, he had applied the name to a competing Web browser he had designed for SyNet, an Illinois Internet service provider that has since gone bankrupt.

Rana could not be reached for comment.

Microsoft had argued that the Internet Explorer name was generic--similar to terms such as "aspirin" or "database"--and therefore not eligible for trademark status. It had asked U.S. District Judge Charles Norgle Sr. of Chicago to dismiss the case, and had petitioned the U.S. Patent and Trademark Office (PTO) to block Rana's application.

Both Norgle and attorneys at the PTO denied Microsoft's requests. Norgle convened a seven-person jury and began hearing the case yesterday. The PTO published Rana's application yesterday, the first step toward its approval.

Under the terms of the settlement, Microsoft is to pay $5 million in exchange for Rana's agreement to dismiss the case and transfer to Microsoft the federal application, as well as a separate registration to the name already granted by the state of Illinois.

"We are confident we would have won this case on the merits, but we are pleased to put this issue behind us," Microsoft's Cullinan added. "It appears the events in the court room helped us achieve a settlement that is in the interest of all the parties."

Microsoft now is in the unusual position of applying for a registration it has vigorously opposed for more than two years. Although other companies that may have their eye on the mark are free to adopt Microsoft's argument that "Internet Explorer" is ineligible for trademark status, there is little doubt that the software giant will be able use the name, according to Mitchell Zimmerman, a trademark attorney at Fenwick & West.

For one thing, Microsoft stands a good chance that the application will be approved, he explained, giving the company the uncontested right to use the name. If the application is rejected, Microsoft is free to continue using the name as a descriptive term, and is even free to file a new application that would contend that the term has taken on "secondary meaning," given the millions of dollars Microsoft has poured into the marketing of the browser.

"One way or the other, they'll be able to protect it," Zimmerman said.