The settlement announced Tuesday includes a pledge by the GOP not to use any musicians' work without proper permission in future campaigns, a statement that Browne said he hoped would benefit other artists.
Browne sued McCain and the Republican National Committee and the Ohio Republican Party last year over use of "Running on Empty" in a Web ad mocking Democrat Barack Obama's proposed energy policies.
"This settlement is really a great affirmation of what I believed my rights to be, and all writers' rights to be," Browne said in an interview with The Associated Press. "One would hope that a presidential candidate would not only know the law but respect it. It was a matter of bringing that issue to bear."
Financial details of the settlement were not announced.
McCain didn't know about the ad, which was created by the Ohio Republican Party and removed after Browne complained, said the statement, attributed to McCain and the state and national parties.
"We apologize that a portion of the Jackson Browne song 'Running on Empty' was used without permission," the statement said.
Browne said he hoped the lawsuit and its successful resolution would have an impact on future political campaigns by putting an end to cavalier attitudes about artists' copyrights.
"I would hope that they would think twice about taking someone's song without permission and understand that the law was put to the test and our rights prevailed," he said.
McCain's campaign ran afoul of several musicians during his presidential run, including the Foo Fighters, Heart and John Mellencamp. Obama wasn't immune either soul legend Sam Moore asked his campaign to stop using "Soul Man."
Browne released "Running on Empty" the song and an album by the same name in 1977. According to the lawsuit, the album has sold more than 7 million copies.
The lawsuit said Browne was concerned that use of his music would cause people to conclude that he was endorsing McCain, even though the 60-year-old singer-songwriter is a self-described liberal and contributed to Obama's campaign.
It remains a concern for Browne.
"Thousands of people come to an event or they see it on TV and they see John Mellencamp's song being used or Ann and Nancy Wilson's song being used and they assume a kind of solidarity and a kind of endorsement that simply does not exist," Browne said.
"Hopefully it will just go to illustrate there is a legal remedy for this."
Browne and his attorney both said they expect the settlement, apology and McCain and the parties' high profiles to prevent some future problems.
"The educational significance cannot be understated," said Browne's attorney, Lawrence Iser, a partner in the entertainment litigation firm Kinsella Weitzman Iser Kump & Aldisert.
"People like Jackson have the right to license the use of their songs for political campaigns, or to choose not to," Iser said. He noted that even though the ad using Browne's song played on the Internet, copyright law doesn't differentiate between those and other broadcasts.
Browne said the typical remedy to misuse of one's music is to file a copyright infringement lawsuit, but that not all musicians can afford that. He brought his lawsuit, he said, to help protect the next generation of artists.
"If you don't uphold the law that allows people to make a living from this, the result is you won't have people able to do this work," Browne said.
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