AN American clothing manufacturer has agreed to make a six-figure donation to charity to settle a dispute with a Scottish golf course owner over the use of the name "St Andrews" on its products.

Streetwear Inc, a Boston-based firm that makes clothes under licence for such brands as Reebok, Adidas and Hasbro, found itself in a legal dispute with the St Andrews Links Trust after launching a golfwear range in the US that breached the Scottish organisation's intellectual property rights. The trust, which has enforced its trademarks in over 40 cases in the past few years, makes between £3.5-£4 million a year in royalty profits from an exclusive agreement with Brooks Brothers of New York to sell clothing using the "St Andrews" and "St Andrews Links Trust" trademarks.

Having found out about the new range because both organisations were due to exhibit at a clothing show in Florida late last year, the trust initiated legal proceedings against Streetwear.

Streetwear claimed it had been advised by a third party it could use the name, and had already commissioned a Chinese factory to make a range of items including polo shirts, trousers, jackets and sweaters with a retail value believed to have been around £2m.

Streetwear president William Cappiello had already been quoted in the American press, saying: "There is no stronger, more prestigious name in golf than St Andrews and we're honoured to have the opportunity to develop this premier brand."

The mistaken advice would have meant Streetwear would potentially have been badly damaged by reneging on a supply contract it had reached with a US retailer. In the end the two sides agreed it could sell the collection provided any profits were split 50-50 between charities in the US and the St Andrews Community Trust, and no further clothes were manufactured using the brands.

The trust, which oversees seven golf courses around St Andrews, including the flagship Old Course, has been enforcing its rights to the two trademarks since it won the right to use them in a court case almost a decade ago. Although this has raised hackles with local people, the trust has always stressed the rights only apply to golf-related goods and services, and do not give any claim over the name of St Andrews more generally.

Euan Loudon, the trust's chief executive, said: "The Links courses at St Andrews are the oldest and most renowned in the world. Their desirability has led to a number of individuals and businesses, both in Scotland and beyond, using our intellectual property and trading on local heritage, tradition and success without our permission.

"In order to protect our commercial interests we have a programme of trademark and brand protection. As part of that work we have a duty to track and enforce our intellectual property. We were alerted to a situation involving Streetwear and their marketing of a product bearing the St Andrews mark, which they were not permitted to use.

"We have made significant investment to promote our commercial interests and, like all businesses holding intellectual property assets, have a duty to monitor the marketplace for infringing activity and to enforce our intellectual property as necessary."

Streetwear, which was founded in 1994, was not available for comment.