BIRMINGHAM, Ala., June 5 (Reuters) - "To Kill a Mockingbird" author Harper Lee has settled a lawsuit with a museum in her Alabama hometown she had accused of illegally profiting from her Pulitzer Prize-winning novel.

6 Jun 2014 - 10:23 AM  UPDATED 10 Jun 2014 - 11:21 AM

A federal judge dismissed the case on Thursday after lawyers
for Lee and the Monroe County Heritage Museum agreed to drop the
suit, according to Lee's attorney, A. Clay Rankin.

Lee, 88, said the museum never paid her a licensing fee to
use the book's title and a mockingbird image on merchandise
sold in its gift shop.

Details of the agreement were not made public, but court
documents said the parties agreed to pay their own attorney fees
and costs.

Last month, a judge reinstated the lawsuit at the request of
Lee, who argued the museum was attempting to change the terms of
an out-of-court settlement reached in March.

Lee's suit, first filed in October, alleged the museum
earned more than $500,000 in 2011 by selling goods including
aprons, kitchen towels, clothing and coasters emblazoned with
the title of her sole published work.

The museum is located in Monroeville, the rural town that
inspired the setting for Lee's 1960 bestseller about racism and

The tourist attraction includes the old courthouse that
served as a model for the courtroom in the book's 1962 film
version, which earned Gregory Peck the Academy Award for Best
Actor for his portrayal of small-town lawyer Atticus Finch.

Museum officials argued that Lee never requested
compensation for the souvenirs honoring her literary legacy
before filing the lawsuit.

Lee is in declining health after a stroke and lives in an
assisted living facility in Monroeville, according to court

(Editing by Kevin Gray and Peter Cooney)