Suit claims ESS breached license with Copy Control Assn.

MGM, Time Warner and other film studios have sued ESS Technology for allegedly distributing DVD encryption decoders to unauthorized third parties.

The film studios say ESS breached its license with the DVD Copy Control Assn. by selling descrambler chips that were discovered in the Aspire Digital AD-8000 DVD Player and Digital Recorder, according to the suit in Los Angeles Superior Court.

“ESS’ distribution, sale and/or transfer of CSS descrambler chips to customers who were not authorized CSS licensees resulted in exposure to unauthorized copying of plaintiffs’ valuable copyrighted material,” the suit said.

Piracy costs U.S. film studios an estimated $3 billion in potential worldwide sales each year, according to the Motion Picture Assn. of America. The studios have won court orders to stop distribution of programs such as 321 Studio Inc.’s DVD Copy Plus, which sells for as little as $50, as they attempt to stop DVD piracy becoming as prevalent as song-swapping Internet sites.

A call to Fremont-based ESS’ investor relations department wasn’t immediately returned.

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