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Company co-founded by Madonna settles suit

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A production company co-founded by Madonna settled a lawsuit on Wednesday with a competing firm over plans to make a movie about prisoner abuse.

The settlement allows Maverick Films to move forward with its film depicting a Stanford University psychology professor's experiment using a simulated prison setting to study obedience in humans.

Beverly Hills-based Inferno Distribution also agreed to drop a countersuit against Maverick.

The settlement did not involve the exchange of money, Inferno lawyer Jonathan M. Levitan said.

"I think both sides are happy to resolve the case outside of litigation," Maverick attorney Gary S. Raskin said.

Maverick sued Inferno in October 2006, claiming the firm unfairly represented itself to gain access to confidential information about a movie Maverick was making called "The Stanford Prison Experiment."

In its lawsuit alleging misappropriation of trade secrets, fraud and breach of contract, Maverick contended Inferno used the information for its own film about prisoner mistreatment.

Inferno countersued in December 2006, alleging slander, unfair competition and interference with contractual relations.

The countersuit said the company was making an English-language version of a German movie that examined the psychological effects of prison.

A judge ordered the two companies to enter into mediation to try to settle the dispute in February.

Maverick Films was founded by Madonna and Maverick Records executive Guy Oseary in 2001. Madonna no longer owns an interest in Maverick Films.