Electronic Arts Inc., Atari Inc. and Vivendi Universal Games sued 321 in June, claiming that 321's software allows illegal copying of CDs and DVDs. The company has suffered under the strain of suits by the various entertainment industries, and in June the St. Louis Post-Dispatch reported it had laid off more than 300 employees. 321 has ceased operations and an independent online vendor is running a close-out sale on 321 products not subject to an injunction.

Three makers of video games (EA, Vivendi & Atari) sued a Missouri company marketing software that enables consumers to make backup copies of computer games. The federal lawsuit, filed Tuesday in New York, alleges that Games X Copy software by 321 Studios Inc. of suburban St. Louis violates copyright laws by illegally cracking copy-protection systems used by game makers.