321 Studios is best known for its DVD-copying software that
circumvents anti-copying features in DVDs and lets consumers make
backup copies.
Recognising that circumvention of the copy protection was not
likely to be welcomed by the film industry, 321 Studios took
pre-emptive action in April 2002, filing a suit that asked the
court to declare that its software did not infringe on the
intellectual property rights of the film industry.
In December 2002, before the court could rule on the matter, the
industry, in the form of the MPAA, sued.
The case forced the court to decide on the scope of the
controversial 1998 Digital Millennium Copyright Act (DMCA), which
prohibits people from using or distributing devices that can bypass
copyrights and copy prevention measures. The UK has similar
provisions, which came into force late last year.
In court, 321 argued that the software merely allowed people to
make fair use of their DVDs, making backup copies in case the
original was destroyed or damaged. The MPAA countered with the
argument that the software allowed people to use unauthorised
versions of the encryption keys.
The San Francisco district court issued its ruling in February,
stating that the software was in violation of the DMCA, and
granting an injunction against 321. The software company
appealed.
By June this year the company was the subject of three
injunctions in connection with its DVD copying software, and was
forbidden from selling or distributing its DVD Copy Plus and DVD-X
COPY software.
In late July, Atari, Electronic Arts and Vivendi succeeded in
obtaining another worldwide injunction against 321 – relating this
time to the company's Games X Copy software. A few days later 321
announced that it had ceased trading.
According to reports the company has now agreed not to sell its
software anywhere in the world and will make a financial settlement
with the movie industry - the terms of which remain
confidential.
Jack Valenti, the MPAA's president and CEO told the Associated
Press, "Now that the company's illegal copying software is off of
store shelves worldwide, we have moved to settle the case".
"This is not the end of the story in our massive fight against
piracy," he added.
321's founder, Robert Moore, told the AP that the agreement had
not yet been signed, but did not comment further.
