Microsoft and its advertising agency have reached a settlement with a company that accused them of copying its ads in a Windows Phone campaign lampooning society’s obsession with smartphones.

At issue was the “Really?” campaign that accompanied the launch of Windows Phone 7 last year. One Microsoft ad showed a man so engrossed in his smartphone that he ignored his wife’s overtures in the bedroom. Another showed a man dropping his phone in a urinal while trying to use the device in a public bathroom.

Microsoft and ad agency Crispin Porter + Bogusky were sued in July by the maker of Cell-R-Derm, a gag gift that spoofs nicotine patches as a way of passive-aggressively informing friends or significant others that they’re using their mobile phones too much.

Cellrderm LLC, based in Boca Raton, Fla., alleged that Microsoft’s ads copied its own ads for its product — albeit with a significantly larger budget than the novelty company.

According to the court docket, the case was settled for undisclosed terms after a Dec. 6 mediation, and the settlement was finalized by the court this week.

The settlement was reported this morning by PaidContent.org. Watch and compare the ads below.

Update: The ads focused on the bathroom and bedroom scenes have been marked private and are no longer available for viewing on YouTube. Could that be a condition of the settlement? Microsoft declined to comment on the deal. You can still get a sense for them in the overview ad below, with the Cellrderm ads below that.

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