In response to a possible class action lawsuit resulting from a recent round of Xbox Live bans, Microsoft has now asserted the legality of its position. A spokesperson has told the Financial Post that piracy is a violation of the company's terms of use and that Microsoft is "well within its legal rights" to ban users from its Xbox Live. It was reported earlier this month that the law firm AlbingtonIP is "investigating" the possibility of a class action lawsuit against Microsoft over the bans. The firm argues that timing of the bans -- shortly after the release of Halo 3: ODST and just prior to the launch of Modern Warfare 2 -- was designed to get as much money from Xbox Live subscriptions as possible. In other words, the firm believes that Microsoft personally waited for a time when many people -- modders in this case -- would be purchasing Live subscriptions for popular games -- money that probably wouldn't be refunded after a ban. Joystiq's Law of the Game columnist, Mark Methenitis, classified the suit as a likely "cash grab," explaining that anyone savvy enough to mod an Xbox would know to stay well away from Xbox Live. We might add that major releases, like ODST and Modern Warfare 2, are the biggest targets for piracy, and likely correspond with rises in illegal downloads. And that just might have something to do with the timing of the bans in question. [Via Kotaku]