Nike Unit, Sideout Settle $10-Million Lawsuit : * Retail: Side 1, a sports apparel division, will pay an undisclosed sum and use a redesigned logo that looks less like the Sideout Sport trademark.

Nike Inc.’s Side 1 women’s sports apparel division announced Friday that it had settled a $10-million trademark infringement lawsuit brought by sportswear maker Sideout Sport.

The settlement with the smaller, Pasadena-based Sideout Sport ended a two-month court-imposed ban on the sale of Side 1 products.

Under terms of the agreement, Side 1 will use a redesigned logo that looks less like the Sideout Sport trademark, the two companies said in a joint news statement.

Side 1 also agreed to pay Sideout an undisclosed amount of money, said Side 1 spokeswoman Anne Pottmeyer.

In return, Side 1 will be allowed to sell off its existing inventory carrying the old logo until the end of 1992.

The companies ironed out the final terms of the agreement Thursday night, enabling Portland, Ore.-based Side 1 to begin shipping its spring line of women’s shoes and sports clothing Friday morning, Pottmeyer said.

“With the new logo designed, our main objective was to resume business as quickly as possible,” Pottmeyer said. “Although we lost two months of sales . . . we feel confident we will be able to regain the momentum we had before.”

A federal judge in December banned Nike from selling Side 1 products pending resolution of Sideout Sport’s suit.

After the ruling, distributors such as J. C. Penney, Lady Foot Locker and Mervyn’s stores voluntarily took Side 1 merchandise off their shelves.

The new spring line is adorned with the new logo. The company will also attempt to sell two seasons’ inventory of clothes and one season’s inventory of shoes that bear the old logo, Pottmeyer said.

In December, Side 1 General Manager Deborah Johnsen estimated the value of inventory frozen by the judge’s order at $4.5 million.

The new Side 1 logo will be oval-shaped. Sideout’s trademark is rectangular.

“We are pleased that Side 1 has voluntarily designed a new logo and lettering style for its Side 1 name. Sideout is confident these changes will avoid potential confusion of customers in the future,” Sideout President Steve Ascher said.

Sideout manufactures and markets a line of beach volleyball sportswear.

In the lawsuit, Sideout argued that with its larger advertising budget, Nike’s Side 1 products would soon have been perceived as the originator of the disputed logo, and Sideout would have been seen as the copycat.