The Motion Picture Association of America had claimed that Real's software illegally circumvented anti-piracy technology embedded in DVDs.
RealNetworks has agreed to kill its DVD-copying software and pay $4.5 million in settling a copyright-infringement lawsuit filed by Hollywood studios.
As part of the settlement announced Wednesday, the provider of online entertainment services also agreed to drop its appeal of a San Francisco federal court ruling that barred RealNetworks from distributing or supporting RealDVD or any other technology that enables the duplication of the studios' copyrighted content.
RealNetworks also agreed to turn off the metadata service that provides DVD cover art and movie information to the roughly 2,700 ReadDVD customers. The company said it was in the process of refunding the purchase price of the product.
Bob Kimball, president and acting chief executive of RealNetworks, said in a statement that the company was "pleased to put this litigation behind us."
"Until this dispute, Real had always enjoyed a productive working relationship with Hollywood," Kimball said. "With this litigation resolved, I hope that in the future we can find mutually beneficial ways to use Real technology to bring Hollywood's great work to consumers."
In August 2009, U.S. District Judge Marilyn Hall Patel barred RealNetworks from selling RealDVD, ruling the technology violated Hollywood studios' copyrights and the licensing agreement RealNetworks had with the studios' copyright-protection group.
The 2008 lawsuit filed by Viacom and the Motion Picture Association of America claimed that RealDVD illegally circumvented the anti-piracy technology embedded in DVDs. The DVD Copy Control Association, which licenses Hollywood-sanctioned copyright-protection technology, joined the suit later, claiming RealNetworks was also in violation of its DVD CCA license.
The settlement was announced less than two months after RealNetworks Chief Executive Rob Glaser stepped down, saying that after 16 years at the helm, it was time to hand over day-to-day operations to someone else. Glaser remains chairman of the company.
Glaser resigned his post shortly after the resignation of chief operating officer John Giamatteo.