Nov. 6 (Bloomberg) -- Yahoo! Inc. settled a lawsuit by cosmetics distributor Mary Kay Inc. that accused the Internet search firm of letting unauthorized resellers of Mary Kay makeup products use its logos in pop-up advertisements.

The trademark-infringement complaint was resolved by a confidential settlement agreement signed Oct. 21, the companies said Nov. 4 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 Inc. in which the world’s most popular search firm was accused of wrongfully selling ad rights to keyword searches.

The case is Mary Kay Inc. vs. Yahoo! Inc., 09-cv-01278, U.S. District Court, Northern District of Texas (Dallas).

To contact the reporter on this story: Erik Larson in New York at elarson4@bloomberg.net.

Last Updated: November 6, 2009 00:01 EST