Irvine Computer Game Maker Resolves Trademark Dispute : Settlement: Firm in Minnesota agrees to stop making software based on Interplay’s products.

Resolving an unusual turf battle in the computer game business, Interplay Productions Inc. said it has settled a trademark dispute with a company that had been selling software based on one of Interplay’s most popular titles.

LaserSoft Inc., a tiny company based in Eden Prairie, Minn., admitted it had infringed on Interplay’s intellectual property rights and agreed to stop selling add-on software linked to Irvine-based Interplay’s products.

But LaserSoft did get a consolation prize. The company will get the rights to distribute a CD-ROM preview of the upcoming sequel to Interplay’s popular Descent game and perhaps other games in the future.

Officials at Interplay said they embraced the settlement because it ends what had become a pesky trademark squabble, while generating new revenue through the licensing fees LaserSoft will pay on each demonstration disc it sells.

“I think it’s a good deal for Interplay and will probably help both companies,” said Kevin Baxter, Interplay’s attorney.

LaserSoft officials were similarly pleased, saying the deal gives them what they wanted from the very beginning: a chance to hitch their company to a well-known software producer that has dozens of lucrative game titles.

“Now we’re on a first-name basis with half a dozen people in their organization,” said Terry Welcome, chief financial officer at LaserSoft. “We’re smiling.”

LaserSoft will begin production of the demonstration disc immediately and hopes to sell up to 300,000 copies, at about $15 apiece, over the next two years, Welcome said. Preview discs generally feature the first few levels of a game for a fraction of the cost of the full title, and they are increasingly popular with consumers.

The settlement ends a dispute that began in September, when Interplay filed a lawsuit accusing LaserSoft of violating trademark laws by selling a program that added new levels of competition to Interplay’s Descent game, a spaceship simulation program.

Arguing that LaserSoft’s package for its product looked so much like the regular Descent game that it would confuse consumers, Interplay obtained a federal court order forcing LaserSoft to stop selling the product and call back packages already sent to retailers.

LaserSoft officials said they will continue to make add-on products for computer games but will stay away from Interplay’s titles.