In April last year, before releasing its DVD X-Copy product, St Louis-based 321 Studios pre-empted a lawsuit by asking a court to confirm that the software was legal. In December, before a decision was reached, the movie industry sued.
The case is important because it will force the courts to decide on the scope of the controversial 1998 Digital Millennium Copyright Act (DMCA), which prohibits people from using or distributing devices that can bypass copyrights and copy prevention measures. The UK has similar provisions, which are about to be tightened when it implements the EU's Copyright Directive.
The San Francisco court will have to rule on the question of whether the DMCA prohibits someone from getting round anti-copying devices on all occasions, or whether this is acceptable in some circumstances.
Recent court decisions on DVD-cracking software are not clear on the issue. In November 2001 an appeal court upheld a decision prohibiting Eric Corely, publisher of hacker magazine 2600, from publishing or linking his web site to a DVD-cracking code.
That case had been seen as a conflict between the right to free speech and copyright protection on the internet. The court said the DCMA did not run counter to the principles of free speech.
More recently a jury in California acquitted Moscow software company ElcomSoft in the first criminal trial under the DMCA. The charges concerned software that evaded the anti-copying protections on electronic books and, like 321, the Russian company used the argument that the product allowed consumers to make back-up copies.
The jury considered that ElcomSoft’s product did break the DMCA – but reasoned that the company lacked the necessary criminal intent because it did not knowingly break the law.
Digital rights group the Electronic Frontier Foundation is supporting 321 in the action. Its lawyer, Wendy Seltzer, said in a statement: "Fair use and the DMCA have been on a collision course since 1998. The judge's ruling in this case will tell whether fair use survives the crash."
The MPAA's lawyer, Russell Frackman, was less prosaic. He told CNet News.com, "We have a product out there that's being used to infringe our clients' copyrights.”
"Any copies that are made by a user are infringing and not permitted whether they are making back-up copies or extra copies," he said.