A year-and-a-half after it first tried to sell an application allowing users to copy DVDs onto a computer hard drive, Real Networks is paying the major studios $4.5 million to end the legal headache it caused.

The Seattle-based digital media company has also agreed to a permanent injunction barring it from selling the RealDVD software.

U.S. District Court Judge Marilyn Patel ruled in favor of Hollywood plaintiffs last August, issuing a preliminary injunction barring the sale of RealDVD. About 2,700 people bought the application, as the studios and the DVD Copy Control Assn., which manages the anti-copying software on DVDs, won a temporary restraining order halting sales just four days after it debuted in September 2008.

Before this week's settlement was reached, RealNetworks had been planning to appeal the preliminary injunction.

Illegal software applications that allow users to copy movies off of DVDs onto computers are plentiful on the Web. Real attempted to make the market legitimate and argued, unsuccessfully, that it was simply allowing its consumers to exercise a "fair use" right to make backup copies of movies they own. The studios were concerned that it would be too easy for people to copy DVDs that they had rented or borrowed.

"We will continue to vigorously pursue companies that attempt to bring these illegal circumvention products and devices to market," Daniel Mandil, chief content protection officer of the Motion Picture Assn. of America, said in a statement.

"We are pleased to put this litigation behind us," Real Networks' acting chief executive Bob Kimball said in a statement. "I hope that in the future we can find mutually beneficial ways to use Real technology to bring Hollywood's great work to consumers."

--Ben Fritz