[free-sklyarov] AP Wire | 12/03/2002 | Digital copyright trial begins in Silicon Valley

[Vladimir Katalov]

http://www.siliconvalley.com/mld/siliconvalley/4657589.htm

Posted on Tue, Dec. 03, 2002
Digital copyright trial begins in Silicon Valley BOB PORTERFIELD
Associated Press

SAN JOSE - Federal prosecutors told a jury here Tuesday they would 
prove a Russian company and one of its young programmers knew they 
were willfully violating a controversial new American copyright law 
when they marketed a program permitting users to "crack" software 
produced by San Jose-based Adobe Systems.

"They were selling a burglar tool for software to make a profit," 
Assistant U.S. Attorney Scott H. Frewing told jurors in his opening 
remarks, "They did it for money."

However, defense attorney Joseph Burton, of San Francisco, said his 
client never intended its product to be used for illegal purposes and 
suggested Adobe urged the government to file criminal charges attempt 
to protect its own revenues from a developing eBook market.

"Elcomsoft believed its product to be legal because it was intended 
to allow some flexibility in use of eBooks by their legitimate 
owners," Burton said "Adobe believed they were dealing with a pirate 
company."

Burton said Elcomsoft's program would only work for people who had 
legitimately purchased an eBook. Only five copies were sold in the 
United States during the 10 days the software was offered for sale 
and it was never used to make illegal copies, he said.

In fact, said Burton, the company has other products it sells to 
American customers ranging from Fortune 500 companies to law 
enforcement agencies. One of those products is a password recovery 
program that is used to extract encrypted passwords.

For the government, the case against Elcomsoft Co. Ltd., a 
Moscow-based software company, is the first criminal prosecution 
under the 1998 Digital Millennium Copyright Act, a law passed with 
strong support from Silicon Valley companies trying to protect their 
lucrative software franchises.

Elcomsoft, it's CEO Alex Katalov and programmer Dmitry Sklyarov were 
charged with selling software that allows users to disable security 
features in the eBook reader software made by Adobe and used to 
access digital publications like novels and nonfiction works.

Adobe's software allows publishers to sell books online in formats 
that, depending upon "permissions" established by the publisher, 
prohibit the content from being copied, printed or transferred. The 
eBook reader is based on Adobe's popular Acrobat software and its 
unique portable document format - or pdf - files used by thousands of 
companies and individuals to digitize and transmit documents by 
e-mail and other means.

The Elcomsoft product, called the Advanced eBook Processor Program, 
is based upon an algorithm developed by Sklyarov that allows the 
removal of publisher-imposed usage restrictions. Elcomsoft says its 
program simply lets users make backup copies or transfer content to 
other devices, something permitted under the "fair use" concept of 
copyright law. Although such programs are legal in Russia, they were 
outlawed by the DMCA.

When Elcomsoft began selling its product on the Internet, Adobe 
complained to the FBI. Sklyarov was arrested after speaking at a Los 
Vegas hacker convention in July 2001. He spent several weeks in jail 
before being freed on $50,000 bail and eventually allowed to return 
home. Charges against Sklyarov, who will be a government witness, 
will be dropped once the case is completed, according to prosecutors.

Thomas Diaz, a Boston based senior engineering manager in Adobe's 
Acrobat engineer group and the prosecution's first witness, testified 
he became concerned about copyright infringement issues when a 
colleague told him about the Russian software.

"It was an advertised product for purchase," said Diaz, "a security 
threat we hadn't anticipated. We were concerned because it was being 
offered as a commercial product with anti-reverse engineering 
requirements in its licensing agreement. The Elcomsoft product has 
one narrow function - to remove permissions."

Diaz, who founded Glassbook, a company that initially developed the 
eBook reader and was acquired by Adobe two years ago, said Adobe 
"started working on countermeasures for the Elcomsoft tool 
immediately" by changing some of the internal code. Diaz claimed 
Adobe did not attempt to reverse engineer the Elcomsoft product it 
purchased because the end-user license prohibited dismantling the 
software.

But, Diaz said Adobe did provide the FBI with a laptop computer on 
which the company had tested the Elcomsoft program.

On cross examination, Diaz said one of Adobe's main fears was the 
fact that instead of actually cracking encryption that protected 
various features of the eBook reader, the Elcomsoft product instead 
would find the electronic "key" to unlock the coded Adobe security 
features and move that key into its own software in which users could 
open the eBooks.

Although the government is continuing with the case, Adobe has 
seemingly withdrawn its support of the prosecution. However, Adobe 
senior corporate counsel Ray Campbell is monitoring the trial for 
what he told U. S. District Judge Ronald M. Whyte were purposes of 
protecting his company's trade secrets.