321 Studios have lost their DMCA battle against the movie industry.

"Judge Susan Illston ruled Friday in San Francisco that software made by
Chesterfield, Mo.-based 321 Studios violates the 1998 Digital Millennium
Copyright Act, which prohibits the circumvention of anti-piracy measures such
as the Content Scramble System protecting movies on DVDs.

The judge ordered the company to cease making or distributing such software
within seven days of her order."

The company has said they will appeal.