8-K

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT
     Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934



         Date of Report (Date of earliest event reported) April 30, 2003



                       Commission File Number     0-15949


                   INTERNATIONAL MICROCOMPUTER SOFTWARE, INC.
             (Exact name of registrant as specified in its charter)




          California                                   94-2862863
(State or other jurisdiction of      (I.R.S. Employer identification No.)
incorporation or organization)


           75 Rowland Way, Novato, CA               94945
     (Address of principal executive offices)     (Zip code)




                                 (415) 878-4000
               (Registrant's telephone number including area code)





    Item 5.   Other Events
____________________________________________


International  Microcomputer  Software,  Inc.  ("IMSI") announced on May 1, 2003
that all litigation relating to a July 2001 settlement agreement the Company and
its  wholly owned subsidiary ArtToday.com, Inc. had originally entered into with
Imageline,  Inc. ('Imageline") and its president, George Riddick ("Riddick") has
now  been  restructured  and fully and finally resolved.  Under the terms of the
restructured  settlement  agreement,  IMSI  agreed  to  the  following:

- -     An  immediate  payment  of  $621,750
- -     A promissory note for $178,250 plus simple interest of 10% per annum due
      on or before April 18, 2004
- -     Licensing and republishing rights to certain intellectual property
- -     The issuance of 600,000 fully vested three year warrants with a strike
      price of $0.46 per share to purchase the Company's common stock

In  return,  the  restructured settlement ends all litigation among the parties,
eliminates  an  existing judgment against IMSI, and removes a lien on certain of
IMSI's  assets.   The  licenses  granted  in  this settlement agreement will not
negatively affect IMSI's ongoing operations and will allow the Company to end an
expensive  and  time  consuming  legal  dispute.

As  a  result  of this settlement, and, as will be disclosed in the notes to its
March  31,  2003  financial  statements,  IMSI  will  recognize  an  additional
non-operating  charge  of approximately $380,000 in its financial statements for
the  quarter  ended  June  30,  2003.

The July 2001 settlement agreement was a settlement of a $2.6 million
arbitration award in favor of Imageline against IMSI for intellectual property
violations and attorney's fees.  The award consisted of $1.2 million in actual
damages, $1.2 in punitive damages and $0.2 million in attorneys' fees.  The July
2001 settlement agreement called for the following;

- -     Dismissal of any further appeals of the award
- -     Cash payments to Imageline over a 12 year period, starting October 2001
      and having a then present value of approximately $833,000 as follows:
     a)   12  monthly  payments  of $11,500 from October 5, 2001 to September 5,
          2002
     b)   Four  equal  quarterly  payments of $78,500 beginning on September 30,
          2002
     c)   132  monthly  payments  of  $6,500  beginning  October  5,  2002
- -     Rights to royalties and inventories pertaining to the MasterClips   line
      of products
- -     A percentage of any net recovery IMSI obtained from any indemnification
      claims IMSI had against third parties associated with the original
      circumstances leading to the arbitration award

As a result of the July 2001 settlement, IMSI recognized a reduction in
liabilities of $2 million in its June 30, 2001 financial statements.  As of the
date of this filing, IMSI had paid approximately $420,000 related to the July
2001 Settlement.  No further payments will be made under the terms of July 2001
mutual settlement as it has been replaced by the current settlement.


(a) Exhibits

   Press Release dated May 1, 2003 announcing settlement of Imageline dispute

EX-99.1

                                                                    News Release

Company Contact:
Pam Volpe
International Microcomputer Software, Inc.
415.878.4025
E-mail: pvolpe@imsisoft.com

                       IMSI  SETTLES IMAGELINE LITIGATION

NOVATO,  CA, May 1, 2003-IMSI  (OTC/BB: IMSI), announced today that it had fully
and  finally  resolved  all  litigation  with Imageline, Inc. and its president,
George Riddick.  The resolution was affected by a new settlement agreement under
which  IMSI  agreed  to  make  two  cash  payments, license certain intellectual
property,  and  issue  warrants to purchase the Company's common stock which are
more fully described on a Form 8-K filed today.  As a result of this settlement,
IMSI will recognize an additional non-operating charge of approximately $380,000
in  its  financial  statements  for  the period ended June 30, 2003.  This final
settlement  eliminates  an  existing  judgment  against  IMSI, removes a lien on
certain of IMSI's assets and ends an expensive and time consuming legal dispute.

"Our  settlement  with  Imageline is the final legacy debt item that the Company
had  to  resolve in its turn-around from losses incurred in 1999 and 2000.  This
marks  the  beginning  of  a  new chapter in the history of IMSI," said IMSI CEO
Martin  Wade.  "The  Company  will now be able to focus fully on capitalizing on
our  core  strengths  such as our visual design division which has just launched
TurboCAD 9.0 and FloorPlan Design Suite 8.0, and the ArtToday.com network of web
sites and domain names which deliver high quality graphic content online," added
IMSI  President,  Gordon  Landies.

About  IMSI
Founded  in 1982, IMSI has established a tradition of providing the professional
hand home user with innovative technology and easy to use, high quality software
products  at  affordable prices.  The Company maintains three business divisions
for  Graphic  Design,  Visual Design and Business Applications and produces many
popular  software titles including TurboCAD , FloorPlan  HiJaak , FormTool , and
FlowCharts&More  .  IMSI  also  owns  the  subsidiary,  ArtToday.com,  Inc., the
largest  subscription-based  graphics  resource  on  the web with over 2,500,000
clipart  images,  animations,  photos,  fonts,  and  sounds.  ArtToday.com  also
maintains  a  network  of  graphics  related  websites  including  Photos.com
(www.photos.com),  ClipArt.com  (www.ClipArt.com)  and  Graphics.com
(www.graphics.com).

More information about IMSI can be found at www.imsisoft.com.

IMSI and ArtToday are registered trademarks of International Microcomputer
Software, Inc. and ArtToday, Inc, respectively. All other products are the
trademarks or registered trademarks of their respective owners.

  2003  International  Microcomputers  Software,  Inc.  All  rights  reserved.

Safe  Harbor  Statement
This  announcement  contains  forward-looking  statements  within the meaning of
Section  27A  of  the  Securities  Act of 1933 and Section 21E of the Securities
Exchange  Act  of  1934.  Actual  results  could  differ  materially  from those
projected  in  the  forward-looking  statements  as  a result of various factors
including  the  ability  of  the  Company  to successfully commercialize its new
technologies  as  well as risk factors set forth under "Factors Affecting Future
Operating  Results"  in  the Company's annual report on Form 10-K and such other
risks  detailed  from  time  to  time  in  the  Company's reports filed with the
Securities  and  Exchange  Commission.  The  Company undertakes no obligation to
publicly  release  the  result  of  any  revisions  to  these  forward-looking
statements,  which may be made to reflect events or circumstances after the date
hereof  or  to  reflect  the  occurrence  of  unanticipated  events.

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