The Motion Picture Association of America had contended that ESS violated a contract by selling DVD-decoding chips to manufacturers that did not have a license to the studios' antipiracy technology. A California state judgeESS from selling any of its DVD chips to other unlicensed manufactures last July.
ESS said that the settlement was amicable and that it has agreed to respect all copyright provisions.
"ESS totally supports the enforcement of all parties' valid intellectual property rights and is committed to being a leader in enabling content protection features," ESS Chief Executive Officer Robert Blair said in a statement. "We look forward to working with the motion picture industry in their worldwide enforcement efforts and in the development of next-generation antipiracy technology."
The suit was part of a recent wave of Hollywood enforcement actions against hardware makers that studios believe are contributing to piracy.
The most controversial of these so far has been a, which makes high-end DVD jukeboxes that stream movies and other content on home networks. The company's products allow customers to upload as many as 500 DVD movies to a central server, and then browse and play the movies anywhere in a home.
Kaleidescape executives say they acquired a license for their product from the DVD Copy Control Association, which is the licensing group for Hollywood's antipiracy technology.
But the DVD-CCA said its technology is meant to prevent copying of DVDs, and filed suit against Kaleidescape in December. The suit remains outstanding in California state court.