Court filings from Dec 30 reportedly show Microsoft and Datel reaching an out of court settlement in a suit which has stretched for over a year.
Although details of the deal have not been released, Bloomberg reports both parties are satisfied with the terms.
No mention was made of Microsoft opening the Xbox 360 to third party memory units.
Datel accused Microsoft of anti-competitive practices, a claim supported by the EFF.
Microsoft filed its own suit against Datel in 2010, alleging two of the latter company's control pads infringed on Microsoft's patents for wireless controllers. The suit ended after Datel ceased manufacture and import of the offending accessories.