Deal comes after judge refused to allow Paramount's "Godfather" contract to be canceled.

Paramount Pictures and the Mario Puzo estate have settled a legal war over a new Mario Puzo estate. On Thursday, the parties told the court about a deal and stipulated to the dismissal of the litigation.

Terms of the agreement have not been made public, but it resolves both a claim and counterclaim that were lodged this year in New York federal court. Both sides have agreed to bear their own legal costs.

Paramount sued first in February, alleging that it had a copyright interest in Puzo's famed novel The Godfather, and an agreement that granted "the sole and exclusive right to make and cause to be made literary and dramatic and other versions and adaptations of every kind and character."

The studio had alleged that prior "sequel novels" had tarnished the legacy over the Godfather franchise and that it was promised in writing that there would be no more literary sequels. It wanted confirmation to preclude the release of The Family Corleone, which was to detail Vito Corleone's rise to power in Depression-era New York.

In May, the two sides came to an interim deal to allow The Family Corleone to come out. Money from the book was to be put aside in escrow until the parties reached a conclusion to the litigation.

The judge allowed a breach of contract counterclaim to continue, and a trial could have clarified rights under deals made in the 1960s, but the two sides have now put the dispute to sleep.

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