Sportswear giant Nike Inc on Friday settled a five-year lawsuit brought by US consumer activist Marc Kasky over free-speech rights linked to a publicity campaign to counter accusations its footwear was made in Asian sweatshops.

As part of the settlement, Nike will make additional workplace-related program investments worth $1.5 million which will go to the Fair Labor Association (FLA) for program operations and worker development program.

In a lengthy statement, the Oregon-based firm said the two parties "mutually agreed that investments designed to strengthen workplace monitoring and factory worker programs are more desirable than prolonged litigation".

Patrick Coughlin, attorney for the plaintiff, stated: "Ultimately, both Nike and Mr Kasky agreed that this resolution benefits two key groups: factory workers and consumers worldwide.

"Given the FLA's collaboration across a wide spectrum of companies, universities and NGOs, it is an excellent vehicle for Nike to further develop its corporate responsibility efforts and allow interested consumers to measure the performance of Nike and other companies through public reporting.

"Mr Kasky is satisfied that this settlement reflects Nike's commitment to positive change where factory workers are concerned."

He added no liability is admitted in the settlement.

"We have learned a great deal in the five years since this case was first filed about the challenges we and others face in addressing issues in manufacturing environments," added Maria Eitel, vice president and senior advisor for corporate responsibility at Nike.

"Our approach to addressing these issues, our business and stakeholder engagement are continually evolving. Nike's integration of corporate responsibility into the framework of its business is integral to who we are as a company."

In 1998, Kasky sued Nike under a California consumer protection law aimed at ending unfair competition and false advertising.