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321 Studio moots bankruptcy

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DVD duplication software maker 321 Studios has admitted that it is considering going bankrupt in order to fend off lawsuits from the music, movie and games industries.

The latest action, launched on 15 June, comes from Atari, Electronic Arts and Vivendi Universal, who want the court to ban sales of 321's Games X Copy utility. The company is already fighting the Motion Picture Association of America (MPAA), which, like the games publishers, accuses it of violating the Digital Millennium Copyright Act (DMCA).

In response to the games companies' lawsuit, 321 CEO Robert Moore said this week he will make a decision within the "next few weeks" as to whether the company will seek bankruptcy protection.

The company has already laid off more than 300 workers in recent months, cutting the workforce to around 24.

"I think bankruptcy protection would probably spell the end for our company," Moore said, though it would halt the litigation against 321. He promised to provide rebates to customers seeking them, and to pay back creditors, should he make a call in favour of bankruptcy.

In February this year, 321 stripped out the DVD format ripper from its DVD X Copy utility. The move followed court rulings in New York and California that it must stop selling DMCA-infringing products. Instead, 321 pointed customers to separate decode software widely available on the Internet.

321 maintains that its products are legal under US copyright law fair use provisions. ®

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