Yahoo has settled a lawsuit by cosmetics distributor Mary Kay that accused the Internet search firm of letting unauthorised re-sellers of Mary Kay make-up products use its logos in pop-up advertisements.

The trademark-infringement complaint was resolved by a confidential settlement agreement signed October 21, the companies said yesterday in a joint filing in federal court in Dallas.

Financial terms of the deal weren't disclosed.

Mary Kay sued the second-most-used Internet search engine in July over claims that ads, generated automatically in Yahoo's Web-based e-mail program, confused consumers by using logos set aside for Mary Kay's independent "beauty consultants."

Closely held Mary Kay said the Yahoo ads "hijacked" e-mails from its consultants, allowing resellers to profit from their marketing efforts.

The dispute was similar to trademark lawsuits against Google in which the world's most popular search firm was accused of wrongfully selling ad rights to keyword searches.