An appeals court has cleared a Norwegian man of DVD piracy charges.
The court upheld an earlier verdict that Jon Johansen, 20, had not broken the law by creating a system that could get around copy protection on DVDs.
The ruling is a setback to anti-piracy efforts by the Hollywood studios.
The Motion Picture Association of America (MPAA) said it was disappointed by the court's decision, saying it encouraged others to circumvent copyright controls.
Free to copy
The case was seen as a major test of Norway's computer protection laws
Mr Johansen, known as "DVD Jon" by the net community, created his program to watch films on a Linux-based computer.
"
The actions of serial hackers such as Mr Johansen are damaging to honest consumers everywhere
"
MPAA statement
He then posted the program onto the net in 1999.
His software, called DeCSS, could decrypt disks by stripping the Content Scrambling System from DVDs.
The US movie industry had accused DVD Jon of theft. But an Oslo court said in January 2003 that he was free to do what he wanted with DVDs he bought legally.
The appeals court has now agreed with the original ruling, throwing out the case of the MPAA.
In her 30-minute ruling, Judge Wenche Skjeggestad said Mr Johansen could freely copy DVDs he had bought, adding he had not violated Norway's laws protecting intellectual property.
It is not clear whether the case will now go before Norway's supreme court.
'Damaging' ruling
In a statement, the MPAA said it was disappointed by the ruling.
"The actions of serial hackers such as Mr Johansen are damaging to honest consumers everywhere.
"While the ruling does not affect laws outside of Norway, we believe this decision encourages circumvention of copyright that threatens consumer choice and employment in the film and television industries."
The Hollywood studios say piracy costs them $3bn a year in lost sales.
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