In February 2004, after a three year legal battle with several of the major Hollywood studios, the DVDXCopy products were deemed by a California court to be in violation of the Digital Millennium Copyright Act in the case 321 Studios v. Metro Goldwyn Mayer Studios, Inc. and were subsequently banned for sale.
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Anticipating a lawsuit by the major Hollywood motion picture studios, in April 2002, 321 Studios filed a pre-emptive complaint against eight Hollywood studios contending that the Digital Millennium Copyright Act (DMCA), a law that prohibits the circumvention of copy protection technology, violates consumer rights as provided in the Fair Use doctrine of the Copyright Act of 1976.