The dispute between two local companies over a patent used to make air source heat pumps has been settled.

Nyle Special Products LLC of Brewer and Hallowell International LLC of Bangor were in court battling over technology used to make similar heating systems that can extract heat from the outside air.

Nyle’s version is the Cold Climate Heat Pump and Hallowell’s is the Acadia, dubbed a low-temperature heat pump.

“A week ago last Friday we got a settlement check,” Nyle President Don Lewis said Tuesday. “I can’t talk about how much we got and I can’t talk about why we got it” because of the settlement agreement.

Heat pump systems have been around for years. They are the dominant method of heating and cooling homes in the Southern United States, but developing pumps that work in colder climates is relatively new, leaders from both companies have said.

Both heat pump systems are more efficient than conventional heating systems and can lower home energy bills considerably, they say.

Nyle Special Products is a division of Nyle International Corp. of Brewer. It was started in 2000 to develop and manufacture a heat pump that works in cold climates. Nyle Corp. is also a division of Nyle International.

Duane Hallowell, a Bangor native and engineer who started Hallowell International in 2005, is a former general manager for Nyle Special Products and started his company across the river in Bangor a couple of months after leaving Nyle in 2005.

The city of Bangor gave Hallowell a $200,000 loan, which required half to go toward rent and half toward machinery and equipment, with the stipulation that if the company reaches certain employment thresholds each year, the city would forgive the payment due.

A message left for Hallowell on Wednesday was not immediately returned.

Nyle, through its attorney, issued Hallowell a cease-and-desist order letter on Sept. 27, 2007, stating Hallowell was infringing on Nyle’s patent.

Hallowell denied the claims and asked on Feb. 11 for a ruling in U.S. District Court in Bangor, and Nyle filed a counterclaim March 20, alleging willful patent infringement.

Both companies are now allowed to move forward with producing their versions of the heat pump.

“It has been settled,” Lewis said.