Seems rather bizarre that Twitter doesn’t own the trademark to the word “tweet” doesn’t it? Well in fact, it doesn’t. The word is a registered trademark of a company called Twittad.

Twittad says it’s “the largest and most effective form of sponsored advertising on Twitter.” And, smartly, in 2008 the company trademark the word “tweet” after using the slogan “Let Your Ad Meet Tweets” for its company. The company managed to obtain the registration quite simply because nobody opposed it.

Last month, Twitter filed a lawsuit against Twittad in hope that this would force the company to cancel its trademark. Twitter also went to the extent of suspending Twittad’s twitter account, which strangely enough appears to currently be lifeless. Irrespective, Twittad and its chief executive James Eliason stood firm.

Eliason told the WSJ that because “Twitter’s users came up with “tweet,” the word is fair game.” On the contrary, Twitter believes “It is in the best interests of our users and developers for the meaning of ‘Tweet’ to be preserved to prevent any confusion, so we are taking action to protect its meaning.”

Today however, Eliason tells the WSJ that Twitter will drop a lawsuit and in return, Twittad would transfer its registered trademark of “tweet” to Twitter.

Twitter has reportedly also recognised the settlement by issuing a statement saying:

“We’ve arrived at a resolution with Twittad that recognizes consistent use of Tweet while supporting the continued success of Twitter ecosystem partners like Twittad,” Twitter spokeswoman Lynn Fox said in a statement.”

On the face of things, Twittad’s ownership of the word “tweet” seems to be its most valuable asset. With a Twitter account with no tweets since February, a very dated website and a Facebook page without a post since June 2010, acquiring the word “tweet” might just be Twittad’s most lucrative transaction.

On a slightly unrelated note… Have you checked out Tweet Speaker? The app speaks Tweets to you!