Red Bull said the brewer, which employs eight staff and is named after a street in Norwich, had a name that was too similar and would confuse customers and “tarnish” the Red Bull name.
It ordered Redwell to change withdraw a trademark application for the name or face legal action.
They have now reached a compromise as Red Bull, which has thousands of staff across the globe, said it was happy for Redwell to use the name as long as it does not make energy drinks.
Jacqui Tolson, senior trademark attorney working on behalf of Redwell, said: "We've managed to negotiate a possible settlement which is now on the table, so it's a good commercial solution for both parties.
“Red Bull know that Redwell won't venture into their markets and Redwell will be able to use their trademarks without fear of further legal action.”