Representatives of Hollywood's major movie studios Thursday settled a lawsuit with a microchip company they accused of selling chips to makers of equipment that could be used to illegally copy DVDs.
The Motion Picture Assn. of America settled the suit with ESS Technology Inc., ESS said in a statement.
The company makes chips that decode the content scramble system, or CSS, which is the copy-protection system used for DVDs.
ESS Technology, based in Fremont, Calif., said it would now sell its chips only to companies with valid CSS licenses as part of their agreement.
ESS shares slipped 12 cents to $4.76 in Nasdaq trading Thursday.
Hollywood studios have launched rounds of assaults against technology companies and individuals that they claim are involved in the illegal distribution of movies, which the studios say costs them billions of dollars annually.
The MPAA settled a similar suit against chip maker Sigma Designs Inc. in November.