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Sony has settled its lawsuit against hacker George “Geohot” Hotz for circumventing the security system of the PlayStation 3 video game console.

The lawsuit was controversial because it pitted Sony against hackers, who felt it should be more open with its hardware, and it exposed Sony to denial-of-service attacks against its web sites.

Hotz hacked the security of the PS 3 and distributed “jailbreaking” software in January that enabled users to run unauthorized software on the console. He posted an encryption key and other software tools on his web site.

As part of the settlement, Hotz has agreed to a permanent injunction. Both parties said they were happy to settle.

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“Sony is glad to put this litigation behind us,” said Riley Russell, general counsel for Sony’s game division. “Our motivation for bringing this litigation was to protect our intellectual property and our consumers. We believe this settlement and the permanent injunction achieve this goal.”

“It was never my intention to cause any users trouble or to make piracy easier,” said Hotz, “I’m happy to have the litigation behind me.” In a joint statement, both parties said Hotz was not involved in the recent attacks on Sony’s internet services and websites.

Sony’s tactics in the case angered a broader community because the company sought to discover how many people had downloaded Hotz’s software. The community interpreted that request as an attempt to discover the identities of users who had downloaded the software in order to take legal action against them. Sony said it was trying to discover the extent of the damage caused by Hotz’s software.

The attacks were initiated by Anonymous, an anonymous internet hacking group that has marshaled its computing resources numerous times to attack company web sites. The hacking group started attacking Sony sites last week and even started digging up details on Sony executives. Then it halted its attacks and scheduled a new assault for April 16. Now it seems likely that those attacks will likely be called off.

Sony had accused Hotz of violating the Digital Millennium Copyright Act by posting information about the PS3’s security. Hotz denied any wrongdoing.

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