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A jury has delivered a verdict of not guilty in the closely watched trial against a Russian software company charged with violating the Digital Millennium Copyright Act.

ElcomSoft was absolved on all counts on Tuesday. The firm faced four charges of violating the DMCA by selling a product it developed called Adobe EBook Processor. That software allowed users to disable security settings on Adobe Systems' e-book files so they could be printed, shared, and viewed on various computing devices. It was also cleared of a fifth charge for conspiring to sell the product.

The case is seen as a pivotal one in the battle between content producers and the technology industry, as it was the first to test the DMCA in a criminal court. That legislation was enacted by Congress in 1998, and was designed to prevent the distribution of technology that can by used to hack copyrighted materials.

Significant Setback?

The jury decision will likely have an effect on future cases involving the DMCA, according to Evan Cox, a partner in the law firm of Covington & Burling, in San Francisco.

"I think this is a pretty significant setback for criminal enforcement of the DMCA," Cox said. "[Congress] thought they were creating penalties for people who do exactly what ElcomSoft did--deliberately make products that circumvent copyright protections.

"At a minimum it's going to be a headache for other prosecutors [of the DMCA]," he said.

One determining factor in the jury's decision, according to Cox, was the jury instructions set by U.S. District Court Judge Ronald Whyte, who presided over the case. He instructed the jury to find ElcomSoft guilty if it agreed that the company developed and sold its product with knowledge and intent of violating the DMCA.

As Cox explained it, the government would have had a better shot at a guilty verdict if it had to prove only that ElcomSoft's intent was to defeat the copyright protection technology.

"In this case I think you have to assume that a big factor in the acquittal was the instruction that the judge gave on willfulness," Cox said. "It's hard to imagine how a prosecutor wins on that point without a signed confession by the defendant."

Throughout the case, ElcomSoft executives and its employee Dmitry Sklyarov argued that they did not build the product with the intent of breaking the law. Rather, it provided legitimate EBook owners "fair use" of their digital content. Additionally, Sklyarov said that his development of the technology was part of research into the security of Adobe's copyright protection technology.

In Russia, the software is not illegal, but it came under the jurisdiction of the U.S. courts when ElcomSoft began selling its product in June 2001.

Mixed Precedent

The U.S. Attorney's Office for the Northern District of California was arguing the case for the government. It had attempted to convince the jury that ElcomSoft officials willfully knew they were breaking the law.

"When you are bringing good cases under new statutes sometimes you are going to lose, and that's what happened here," U.S. Attorney Kevin Ryan said in a statement after the verdict. "We accept the jury's verdict. While disappointed, we are also pleased that the judge upheld the constitutionality of the Digital Millennium Copyright Act, and the jurisdiction of the United States to bring these cases."

Fred von Lohmann, senior intellectual property attorney with the Electronic Frontier Foundation, which advocated in favor of ElcomSoft, lauded the decision. He did, however, agree that technology companies should not view the jury decision as a shield from future prosecution.

"It doesn't create a direct legal precedent because juries aren't required to write down the reasons for their decisions, but I think it sends a very important message to prosecutors," he said. "Juries aren't eager to throw software companies and software engineers in jail."

The government brought its case against ElcomSoft and Sklyarov in July 2001 following a presentation by Sklyarov on the software at the Def Con hacker conference in Las Vegas. Criminal charges against Sklyarov were dropped in exchange for his testimony during the trial. ElcomSoft faced as much as $2.5 million in fines if convicted.

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