The three companies said they will use Yahoo's proprietary filter technology to block the sale and advertisement of pirated games on Yahoo's auctions and classified sections.
Yahoo "agreed to do a better job, and we'll be working with them to provide the words that we think are common to people who buy and sell stolen intellectual property," said Jeff Brown, a spokesman for Electronic Arts. "We'll help them identify where we see rings of this kind of commerce."
Monday's announcement brings closure to a lawsuit filed by Electronic Arts and Nintendo in March 2000. Sega of America was also part of the initial lawsuit, but it dropped out last year.
At the time of the suit, the video game companies alleged that Yahoo refused to dismantle auctions of copyrighted video games, despite being notified of them and despite having technology that would have allowed it to police the auctions.
Additionally, the companies charged that Yahoo profited from the sales, both through selling ads and by charging auction sellers to display their auctions.
Copyright infringement has long been a hot-button issue for software companies and has spurred several lawsuits. Just recently, the Software and Information Industry Association (SIIA) sued two individuals in U.S. District Court, accusing them of selling illegally copied software. It was the first time the trade group--which filed the suit on behalf of software companies Adobe Systems, Macromedia and Alias/Wavefront?-had brought legal action against individuals.
Last year, an SIIA study found that approximately 90 percent of the software auctions on sites such as eBay, Yahoo and Amazon.com were offering illegal software.
That marked a big increase from a 1999 survey by the group, which found that 60 percent of software auctions were offering illegal software.
Copyright violations have also been a major issue for the music industry. A high-profile lawsuit by the Recording Industry Association of America against the file-swapping start-up Napster, for example, took an important turn last week when a U.S. District judge ordered the company to block copyrighted songs from its service.