(Wired) SAN DIEGO — Lindows.com defiantly told Microsoft Tuesday it will not remove a website that offers to process claims for Californians entitled to proceeds from a $1.1 billion class-action settlement with the software giant.

San Diego-based Lindows, which sells a Linux-based operating system, said Microsoft sent it a letter Friday ordering it to take down the site, MSfreePC.com, claiming it is deceptive, mischaracterizes terms of the settlement and may cause consumers to have their legal claims rejected by a claims administrator.

The dispute is the latest squabble between the two companies.

In December, a federal jury in Seattle will hear Microsoft’s complaint that the Lindows name infringes on its Windows trademark. Lindows CEO Michael Robertson, a longtime Microsoft antagonist, has funded a $200,000 hacking contest centered around Microsoft’s XBox video console.

The letter from Microsoft lawyer Robert Rosenfeld, released by Lindows Monday, said the Redmond, Washington-based company threatened to take “all appropriate action to protect the integrity of the settlement claims process” if Lindows fails to explain how it will take “corrective actions.”

Lindows responded by saying it would continue to promote the service, which offers an “instant settlement” that can be used to buy Lindows products. The company also offers free computers to the first 10,000 respondents who qualify for the settlement.

“Our plan is to continue to offer the MSfreePC service in spite of your threats. If required, we will be a voice in the courtroom defending a consumer’s right to use technology and an online process to secure their settlement claims,” according to the letter signed by Robertson.

The settlement, reached in January, came in response to a 1999 lawsuit on behalf of California consumers and businesses that claimed Microsoft violated the state’s antitrust and unfair competition laws.

Proceeds from the deal were being distributed in the form of vouchers redeemable for computers that run on the operating system of their choice as well as other peripherals and/or software from any provider.