This past Monday, 321 Studios shut its doors. Maker of the once popular DVD copying applications, DVD X Copy and DVD Copy Plus, the St. Charles, Missouri company has brought an end to nearly two years of legal battles with the leading Hollywood Studios, which felt the software was in violation of federal law. In February, the company was barred from selling its DVD copying engine, and it could no longer afford to carry on.

321's legal battles began in early 2002, when CEO Robert Moore read a news article wherein a spokesperson for the Motion Picture Association of America (MPAA)—the organization that represents film, home video, and television companies—accused the company of selling piracy software in violation of the Digital Millennium Copyright Act and threatened legal action.

The company soon filed a declaratory relief action, a way of preempting a lawsuit, asking a court to rule that DVD Copy Plus is not in violation of the DMCA. The action named nine different movie studios as defendants: Columbia Pictures Industry, Disney Enterprises, Metro-Goldwyn-Mayer Studios, Pixar, The Saul Zaentz Company, Sony Pictures Entertainment, Time Warner Entertainment, TriStar Pictures, and Universal City Studios. In December of that year, seven of those nine filed a counter suit, seeking not only to re-move the tools from the market but also to recover damages from 321 Studios.

When the ruling was announced this February, Judge Susan Illston of the U.S. District Court for the Northern District of California ordered 321 Studios to stop selling DVD X Copy, deciding the application was indeed illegal under the Digital Millennium Copyright Act (DMCA), which prevents the sale of software designed to break the copy-protection schemes used by digital media.

321 had claimed that the DMCA allows individuals to make copies of DVDs for their own personal use, but, according to Evan R. Cox, an intellectual property attorney and a partner in the San Francisco office of the international law firm Covington & Burling, this is not the case. "This was a pretty unsurprising result," Cox told PC Magazine in February. "The judge really couldn't come out any other way without standing the statute on its head and, basically, rendering it meaningless."

The company did file an appeal, but, unable to sell anything but severely crippled versions of DVD X Copy, it didn't have the money to continue fighting. 321 has posted a notice to its Web site, saying that it has ceased to sell, support, or promote its products, but that existing customers could continue to use the technical support "knowledge base" and FAQs on the site until August 1, 2005.