Nintendo sued them for bypassing their protection. Often people caved; Nintendo/Sega controlled how many games a developer could get published; the genre etc. Codemasters was like "yeah, right" and reversed engineered it, and got sued. Apparently they thought they were going to lose and agreed with Codemasters to call off the lawsuit as long as Codemasters maintained publicly that they had done a deal with Nintendo to end the case.

Source: common knowledge in the small West England game dev community.