updated 4/11/2005 11:56:44 AM ET 2005-04-11T15:56:44

Microsoft Corp., the world's biggest software maker, has agreed to pay Gateway Inc. $150 million over four years to settle a legal dispute and the companies will work together on the marketing and development of Gateway personal computing products.

As part of the settlement announced Monday, Gateway will release all antitrust claims against Microsoft based on past conduct. (MSNBC is a Microsoft-NBC joint venture.)

Gateway expects to use the funds for marketing initiatives, including advertising, sales training and consulting, as well as for the research, development and testing of new Gateway products that can run current Microsoft products and Microsoft's next-generation operating system and productivity software.

"Gateway continues to enjoy a strong relationship with Microsoft and we're pleased to put these legacy legal issues behind us," said Wayne Inouye, president and CEO of Gateway. "We look forward to even greater collaboration with Microsoft going forward as we work together towards the future of computing."

Gateway's claims arose from the United States v. Microsoft antitrust case in the mid-1990s, where Gateway was specifically identified in U.S. District Judge Thomas Penfield Jackson's findings as having been impacted in its business by practices on which he ruled against Microsoft.

Under the statute of limitations, the time period for Gateway to bring claims against Microsoft based on these findings of fact expired in late 2003. Before the expiration date, Microsoft and Gateway agreed to extend the period in order to explore a mutually beneficial solution.

The companies said today's agreement resulted from a recent mediation. Microsoft denies any liability to Gateway, but said it is "very pleased to be able to resolve our past differences in a constructive manner that will allow us to continue our focus on the interests of our mutual customers."

Copyright 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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