A Hong Kong computer games firm has lost the second round in its legal battle with the world's top three console giants. Lik Sang International last week announced that it had settled out of court with Sony Computer Entertainment after a legal battle over controversial modification chips. The chips could be used to modify Sony Playstation consoles so that they could play regionally restricted or pirated computer games. The company is involved in similar cases with Xbox maker Microsoft and Nintendo, which produces Gamecube and Game Boy. All three firms are suing Lik Sang for selling so-called 'circumvention devices', which they allege are designed to enable gamers to get around copyright restrictions. The company, which formerly sold games and accessories through its Lik-sang.com website, agreed to pay unspecified compensation to Sony and abandon an appeal against a High Court ruling that was filed in March. The Lik-Sang.com web retail business is not involved in the legal case. In May, the High Court ordered Lik Sang to pay Nintendo a HK$5 million fine and HK$650,000 in legal costs in a case Nintendo described as 'one of the most significant anti-piracy judgments ever'. That award was given after the court decided Lik Sang's 'Flash Advance Linker' could be used by software pirates and in breach of the Copyrights Ordinance. A flash linker connects a Game Boy cartridge to a PC for the purpose of transferring files. Alex Kempl, one of two Lik Sang directors named in the three suits, said the Sony settlement would not affect the firm's battles with Microsoft and Nintendo, since the cases dealt with different technologies. He said Hong Kong firms defending themselves on complex technology issues faced a tough challenge. 'This lawsuit is happening at a place where it's not supposed to happen. The court of Hong Kong does not understand at all what it's all about,' he said. He added that no date had yet been set for either the Microsoft case or the Nintendo appeal. A Sony spokesman was not available for comment.