The long-running copyright dispute between Apple and Franklin has been settled out of court.

The struggle went into extra time last September when Franklin appealed against a federal court's decision in Apple's favour, and it seemed to be moving towards stalemate when the settlement was announced last week. Franklin will pay Apple $2.5 million, and in return it wins a period of grace to develop products that don't infringe Apple's copyright.

The case goes back originally to 1982, when Franklin started selling its Ace computers as Apple-compatible. Apple sued, claiming that the copyright of its Applesoft ROM had been infringed; Franklin, in the finest tradition of US litigation, counter-sued. In the meantime it has sold an estimated 100,000 computers and had sales of $70 million in 1983.

A spokesman for Apple UK said that the corporation was "very pleased with the settlement". He added: "It is Apple's policy to try to help third party suppliers but when it comes to people trying to rip us off it's a different matter."

Franklin is said to be moving into the crowded IBM PC-compatible market, where it will find a similar attitude on the part of IBM towards imitators.

An IBM spokesman said last week: "We do have an open engineering policy. This is quite different from encouraging people to copy the PC. Wherever our copyrights are infringed we'll act on it and act on it vigourously."