Apple and Amazon have settled their differences over the term "app store", with both companies promising to drop lawsuits against each other.

The move, which clears the way for both firms to use the name, ended in a U.S. District Court in California, when judge Phyllis Hamilton agreed to dismiss the case.

Apple, who were suing Amazon over the usage of the term, agreed to drop the case in a bid to avoid a counterclaim from the online retailer.

As a result, the warring tech giants have avoided a trial which was previously scheduled for August 19, over two years since the first claim was made in March 2011.

"We no longer see a need to pursue our case," said Kristin Huguet, spokeswoman, Apple.

"With more than 900,000 apps and 50 billion downloads, customers know where they can purchase their favourite apps."

Apple's decision to "unilaterally abandon the case, leaves Amazon free to use 'appstore'" according to Amazon's lawyer Martin Glick after the hearing.

Amazon has previously argued the "app store" is so universally generic it was not possible to mislead customers, or draw them away from Apple's iOS App Store.

"We're gratified that the court has conclusively dismissed this case," said Mary Osako, spokeswoman, Amazon.

"We look forward to continuing our focus on delivering the best possible appstore experience to customers and developers."

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