Microsoft and Barnes & Noble have settled in their patent dispute and have become best buddies in the process. The software giant has invested $300 million in a new venture with the bookstore chain and Nook eBook reader manufacturer which will oversee the latter company's digital and college sides of its business.

Currently called Newco, the new offshoot will handle all manner of Nook-related digital products, including a branded application for Windows 8 and, presumably, Windows Phone. Microsoft president Andy Lees himself said that "complementary assets will accelerate e-reading innovation across a broad range of Windows devices".

It is too soon, however, to confirm rumours of a Windows 8-powered Nook tablet, with Lees having said that the company would not be talking about roadmaps at present.

For its $300 million, Microsoft will be taking a 17.6 per cent stake in the new business, with Barnes & Noble holding on to the rest of the company valued at $1.7 billion.

As part of the patent litigation settlement, Microsoft will be licensing the disputed patents to Barnes & Noble for its Nook range of eBook readers and tablets.