The Chicago-based Native American Arts Inc., representing Ho-Chunk tribal members, had demanded $8 million from Milne Jewelry Co. in a complaint filed in 2005.

A confidential settlement was reached on Aug. 6, according to court records. Company owner Irwin Milne did not admit guilt but agreed not to violate the Indian Arts and Craft Act, essentially a truth-in-advertising law that makes it unlawful to sell counterfeit Indian artwork.

At issue in the lawsuit were two Indian dolls marketed by Milne Jewelry manufactured in China by Timeless Collection, which sold porcelain dolls through companies selling collectibles and on eBay. Other items in question included five jewelry pieces labeled as Navajo, Zuni and Hopi.

Native American Arts named as defendants the company Web site, Milne Jewelry.Com Inc., and its officer Sherlynn Milne. Attorneys representing both sides did not return telephone calls for comment.

The suit was brought under the Indian Arts and Crafts Act of 1990, which allows tribes recognized by the federal or state governments, tribal members or American Indian arts groups to file civil actions. Plaintiffs may collect triple damages or $1,000 for each day a violation occurs, whichever amount is greater.

The original act, passed in 1935, provided no meaningful deterrent to those who sold counterfeit wares. But in 1990, Congress amended the act to include penalties of up to $1 million for each violation and prison terms.

Because there are historic discrepancies in government certification of tribes, however, the law is not universally popular among Native Americans. In the book The Arbitrary Indian: The Indian Arts and Craft Act of 1990, author Gail K. Sheffield argued that the law had unintended consequences of sanctioning discrimination against American Indians whose tribal affiliation has not been recognized by federal or state authorities.