Heelys, Inc. has agreed to settle its patent and trademark infringement dispute with Elan-Polo, Inc. for $1.4 million.

Under terms of the settlement, Elan-Polo will pay Heelys a total of $1.4 million, including $750,000 immediately, $250,000 in both April 2008 and February 2009, and $150,000 in February 2010.


 “We are pleased to have reached this settlement agreement with Elan-Polo,” said Heely's Interim CEO Ralph Parks. “We continue to be confident about the strength of our intellectual property and we remain committed to defending our leadership status in the industry.”

Heelys also announced it has signed a strategic licensing agreement with Elan-Polo. Under terms of the agreement, Heelys has granted Elan-Polo the rights to manufacture and sell a certain style of shoe skates with non-removable wheels both in the heel and in front of the heel to an approved list of retailers in the United State and Canada, in return for royalty payments. The licensing agreement runs until March 10, 2011.

“This licensing agreement gives us better control over the marketplace by providing us with a strategic vehicle to access and monitor the distribution of entry-level products, while at the same time maintaining the integrity and premium positioning of the Heelys brand,” said Parks. “We look forward to a mutually beneficial relationship between our two companies.”