Tue Aug 24,11:06 AM ET
LOS ANGELES (Reuters) - The representative for Hollywood's major movie studios on Monday said its members have sued two microchip makers, alleging they sold their products to makers of equipment that can be used to illegally copy DVDs.
The suits are the latest legal action by the Motion Picture Association of America, which claims its members loose billions of dollars annually to copyright piracy.
The MPAA said the suits against Sigma Designs Inc. (Nasdaq:SIGM - news) and MediaTek Inc. (2454.TW) followed testing that it said proved the two were selling microchips to companies, whose DVD players lack what the MPAA called "appropriate security features."
The suits were filed in California Superior Court in Los Angeles.
Sigma and MediaTek make chips to decode the Content Scramble System, or CSS, which is the copy-protection system used for DVDs. Their licenses require that they sell only to other CSS-licensed companies.
A spokesman for Milpitas, California-based Sigma was not immediately available to comment, nor was a spokesman for Taiwan-based MediaTek.
The CSS license pact has aided the success of DVDs because it has provided protection against illegal copying to copyright owners of movies, television shows and other content sold on DVD.
In July a California court issued a preliminary injunction barring ESS Technology Inc. (Nasdaq:ESST - news) from selling its own CSS-decoding chips to unlicensed makers of DVD players.
The MPAA, recognizing the damage the advent of digital file-sharing did to the music industry, has waged an aggressive campaign against movie piracy. It has sued people and companies for purported acts of piracy and rewarded movie projectionists for turning in people who make illegal recordings in theaters.
Last week it was dealt a blow as a federal appeals court said a number of notable makers of file-sharing software could not be held liable for copyright infringement. They had been sued by movie and music companies who claimed they should be held liable because of how their software was used.