HP has settled a lawsuit in which Canadian text-entry firm WordLogic had accused the company of using its software for handheld computers without a licence.
Terms of the settlement were not released.
Vancouver-based WordLogic had licensed its text-entry software to Compaq in the northern hemisphere autumn of 2001 for use in the computer maker's iPaq.
HP assumed the contract when it acquired Compaq the following year.
Under the contract, there was no charge for use of WordLogic's software for the first year.
HP, however, allegedly continued to use the software without paying, and WordLogic sued in December 2002 in court in the US state of California, a WordLogic spokesman said.
A trial was scheduled for later this year.
HP stopped using WordLogic software during the legal dispute.
"Whether or not we're going to have a working relationship going forward, I can't comment on that," the spokesman said.
A trial version of WordLogic software ships with the Dell Axim handheld.