Jury’s verdict puts digital copyright law to test

A federal jury on Dec. 17 acquitted a Russian software firm of digital copyright violations for creating a program that cracks the security features of Adobe Systems’ eBook Reader software.

The case against ElcomSoft Ltd. was the most high-profile criminal prosecution under the 1998 Digital Millennium Copyright Act (DMCA), which many education and consumer-rights groups consider unduly restrictive. Although the jury’s verdict doesn’t change the law, legal experts say the case was an important test of consumers’ rights to use digital movies, images, and books they legally obtain.

ElcomSoft “built a tool, and sure that tool could be misused by some people—but nobody alleged [the company itself] committed any infringement,” said Fred von Lohmann, senior intellectual property attorney for the Electronic Frontier Foundation, a leading DMCA critic.

The copyright act under which ElcomSoft was tried prohibits the production and distribution of any product that circumvents the security features of digital media. Supporters of the law—including the software, publishing, and entertainment industries—say it’s necessary to prevent the illegal copying and distribution of electronic content. But civil libertarians and some education groups argue that the DMCA stifles academic research and gives publishers too tight a grip over online content.

With Adobe’s eBook Reader software, for example, publishers can set such restrictions as banning printing entirely or restricting the number of pages or allotted time for reading.

The defense had argued that the ElcomSoft’s program merely enabled owners of the eBook Reader to exercise their rights to “fair use” under copyright law, including making copies of eBooks for backups, transfers to other devices, and other personal use.

Jury foreman Dennis Strader said that argument had a big impact on the jurors, who asked U.S. District Judge Ronald M. Whyte to clarify the “fair use” definition shortly after deliberations began. “Under the eBook formats, you have no rights at all, and the jury had trouble with that concept,” said Strader.

The young ElcomSoft programmer who developed the software, Dmitry Sklyarov, became a lightning rod for hacker rights when he was arrested last year after attending a hacker convention in Las Vegas. Adobe had complained to the Federal Bureau of Investigation (FBI) after the software became available for download in the United States, for around $99. Adobe eventually dropped its support of the charges against Sklyarov after internet policy groups threatened to organize a boycott of the company’s products.

But prosecutors continued to press charges against Sklyarov. The assistant professor at Moscow Technical University spent several weeks in jail before the government agreed to drop charges against him in exchange for his testimony at ElcomSoft’s trial.

Prosecutors had tried to prove that the ElcomSoft software was illegal because it permitted owners to freely distribute copyrighted material, encouraging piracy.

During the 10 days the software was offered in the summer of 2001, about 20 copies were sold worldwide, including nine in the United States.

Though Adobe provides the software for viewing eBooks free on computers, the program for creating such books sells for up to $10,000 per copy. Adobe has been concerned about any perception that copyright content isn’t secure. In response to the jury’s verdict, Adobe said it was disappointed but stood by its original decision to report ElcomSoft’s activities to prosecutors.

Prosecutor Scott H. Frewing had told jurors that the Russians “were selling a burglar tool for software to make a profit.” He quickly left the courtroom after the verdict and had no immediate comment.

Miriam Nisbett, legislative counsel for the American Library Association, hailed the jury’s decision.

“The [DMCA] really did tighten up what anyone can do with copyrighted material,” she said. “It was reassuring that the jury in this case saw that if there was a well-intentioned purpose, the company would not be [held] liable.”

Still, Nisbett said, it’s too early to tell whether the ruling will have any direct impact on how educators handle the use of digitally protected intellectual property in the future.

“I think we still have to be very wary, because there are very serious penalties for violating the DMCA,” she said. “We’re still going to have to tread very carefully.”

Nisbett said her organization believes the DMCA is too strict and does not provide enough latitude for fair use, especially in classrooms.

“We have a problem with the law,” she said. “If there are technical locks in place, you can’t circumvent them. This prohibits fair use. There should be exceptions that allow you to circumvent certain protections if you are going to make a non-infringing use of something.”

This is particularly important in the classroom, she said, where digital texts are being used and produced with greater frequency now.

In a civil case stemming from the same provision of the DMCA, a federal appeals court in New York sided with Hollywood’s major studios in upholding a ruling against a man who had posted on his web site a program that let users decrypt and copy digital video discs (DVDs).

The court held that permitting such software would deprive movie studios of revenues because copies of DVDs can be instantly circulated online.

Two other criminal cases, both against individuals, ended in plea agreements. Defense attorney Joe Burton said the government failed to prove ElcomSoft intended to violate the law, but predicted more prosecutions. “I don’t see [the verdict] as throwing a blanket on DMCA,” Burton said. “It will take another case to test that.”

ElcomSoft president Alex Katalov said the program that triggered the prosecution is no longer being sold in Russia or anywhere else. The Moscow company makes a variety of code-cracking and password recovery programs, and its clients include numerous U.S. law enforcement agencies—including, ironically, the FBI and the Department of Justice.

Had it been convicted, ElcomSoft could have been fined $2 million with additional penalties if willful intent was determined.


ElcomSoft Ltd.

Adobe Systems Ltd.

Electronic Frontier Foundation

American Library Association

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