BOISE, Idaho - Software company Extended Systems will pay $2 million to California's Intellisync Corp. to settle a patent infringement lawsuit.

The settlement announced Thursday ends a two-year legal battle that was scheduled for trial next month. Last month, company executives warned investors that attorney fees would rise by another $1 million as the trial date neared.

"We are very pleased this is behind us so everything our employees work on going forward is to the benefit of our customers and shareholders," Extended Systems President Charles Jepson said.

Intellisync, a San Jose company formerly called Pumatech, sued the Boise wireless software firm for patent infringement in April 2002.

In a press release issued jointly by both companies, Extended Systems acknowledged the validity of Intellisync's patents.

The $2 million payment represents nearly a fourth of Extended Systems' total sales for its last quarter. The firm, which has reported just two quarterly profits in nearly five years, reported annual revenues of $27.5 million for 2003.

The settlement releases Extended Systems customers from any past or future claims of infringement. Both companies also agreed there will be no further patent litigation for five years.

Extended Systems stock was up 17 cents at $5.85 a share in early trading on Friday on the NASDAQ exchange while Intellisync stock slipped a penny to $3.37.