WHITE PLAINS, N.Y. (AP) – The dispute between Martha Stewart and some of her neighbors over her bid to trademark the name of their village has been resolved with a compromise: Katonah furniture, OK; Katonah paint, no way.

Stewart’s company, Martha Stewart Living Omnimedia Inc., has agreed to seek a “Katonah” trademark only for furniture, mirrors, pillows and chair cushions. Those opposing the trademark have agreed not to challenge that application.

Stewart’s Katonah furniture line is already for sale but not yet trademarked.

Stewart agreed to drop trademark applications for additional products, “such as hardware, paint, lighting and home textiles,” according to a statement issued by Stewart’s company, the Katonah Village Improvement Society and two Katonah stores.

Some residents of the tiny hamlet in Westchester County, where Stewart has a 153-acre estate, objected to her using the name Katonah for commercial purposes and feared the trademark would harm existing businesses. Some American Indians had also objected, because the village, 40 miles north of New York City, is named for a 17th-century chief.

Lydia Landesberg, who is president of the Improvement Society but said she was speaking personally, said Wednesday, “The fact that a small group of ordinary citizens was able to persuade a huge corporation to significantly alter its marketing plans is remarkable. I believe that we have greatly minimized what could have been a tremendously restricting situation for the Katonah community.”

Bill Tisherman, who was vice president of the society when the complaint was lodged, said, “Martha Stewart caved. That’s my opinion. She gave up a huge chunk of what she was looking for, and that’s good for the future of this town.”

Stewart’s company would not comment beyond the statement, which was dated Nov. 2.

Stewart had said she was honoring Katonah’s heritage by using the name. In the statement, all parties expressed “mutual appreciation” for the town.

Stewart said the trademark would not interfere with the use of the name Katonah by others – such as Katonah Paint and Hardware and Katonah Architectural Hardware, the stores that challenged her – and said she “has never challenged the right of Katonah-based businesses to use their town’s name in their company names.”

Stewart pledged to challenge use of the name only if “a product (like furniture) were branded with the name “Katonah’ in a way that infringed the company’s trademark rights, which could cause confusion for consumers.”

AP-ES-11-14-07 1629EST