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Thu, Aug 05, 2004 - Page 12 News List

Software maker shuts down after battles over copying games

CLOSING ITS DOORS The announcement by the Missouri-based 321 Studios blamed rulings by federal courts and came just days after another legal setback

AP , ST. LOUIS, MISSOURI

A maker of software that enabled users to copy DVDs and computer games folded under the mounting weight of lawsuits by deep-pocketed movie studios and video game producers.

In a posting on its Web site, 321 Studios Inc quietly announced on Tuesday that "it has ceased business operations including, but not limited to, the sale, support and promotion of our products."

The company said that despite its "best efforts to remain in business," unfavorable court rulings by three federal courts this year assured its demise.

"The employees and those associated with 321 Studios sincerely appreciate your support of our company and products over the last couple of years," said the statement by the "321 Studios Team."

The company, based in the St. Louis suburb of St. Charles, warned in June that it could seek federal bankruptcy protection to free itself of copyright-related lawsuits by Hollywood and makers of computer games.

Tuesday's announcement came just five days after 321 suffered another legal setback. On Thursday, a federal judge in New York imposed a worldwide ban on the production and distribution of 321's Games X Copy software, which had fetched US$60 and let users make what 321's Web site had called "a PERFECT backup copy of virtually any PC game."

The injunction came as part of a June lawsuit by three leading makers of video games, marking a new legal front against a company that already was at odds with Hollywood over its DVD-copying software.

Robert Moore, 321's founder and president, long had cast his crusade as a David-and-Goliath struggle, insisting his com-pany's software was meant to let consumers innocently make backup copies of their DVDs and computer games.

Hollywood and the computer-gaming companies -- Atari, Electronic Arts Inc and Vivendi Universal Games -- argued otherwise, accusing 321 of violating the 1998 Digital Millennium Copyright Act.

That law bars circumvention of anti-

piracy measures used to protect DVDs and other technology.

Federal judges in New York and California have barred 321 from marketing the questioned DVD-cloning software.

Since those rulings, 321 has shipped retooled versions of its DVD-copying products, removing the software component required to descramble movies.

Even in possible bankruptcy, Moore has said, 321 would make good with creditors, satisfy customers seeking rebates and press its case against Hollywood that consumers "should have the right to make copies of their own legally obtained digital materials."

In its announcement on Tuesday, 321 said anyone seeking customer support should do so by Aug. 1 next year at the company's Web site, "where you should be able to resolve most of your concerns."

The company said it no longer can offer telephone, e-mail or live chat support for any of its products.

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