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LOS ANGELES (Reuters) - Three days after a Princeton graduate student posted a paper on his Web site detailing how to defeat the copy-protection software on a new music CD by pressing a single computer key, the maker of the software said on Thursday it would sue him.
In a statement, SunnComm Technologies Inc. said it would sue Alex Halderman over the paper, which said SunnComm's MediaMax CD-3 software could be blocked by holding down the "Shift" key on a computer keyboard as a CD using the software was inserted into a disc drive.
"SunnComm believes that by making erroneous assumptions in putting together his critical review of the MediaMax CD-3 technology, Halderman came to false conclusions concerning the robustness and efficacy of SunnComm's MediaMax technology," it said.
SunnComm, which trades on the Over-the-Counter Bulletin Board, said it has lost more than $10 million of its market value since Halderman published his report.
The software was used on a CD, Anthony Hamilton's "Comin' From Where I'm From," released last month. Halderman, who has done research in the past on other CD protection technologies, said the software could also be disabled by stopping a driver the software loads on the computer when the CD is played.
SunnComm alleged Halderman violated criminal provisions of the Digital Millennium Copyright Act (news - web sites) in disclosing the existence of those driver files.
Halderman -- who received an undergraduate degree from Princeton earlier this year and is now pursuing a doctorate in computer science with an emphasis on computer security -- said he had not yet heard directly from SunnComm in regards to litigation but was unconcerned.
"I'm still not very worried about litigation under the DMCA, I don't think there's any case," he told Reuters. "I don't think telling people to press the 'Shift' key is a violation of the DMCA."
A spokesman for BMG, the unit of Bertelsmann AG (news - web sites) that licensed SunnComm's software and released the Hamilton CD, declined to comment on the planned suit.
The music industry, claiming a sharp decline in CD sales is the result of digital piracy through online file-sharing services, has worked to develop methods to secure music on discs and restrict its copying.
Halderman's graduate advisor at Princeton is Ed Felten, a computer science professor who once sued the Recording Industry Association of America (news - web sites) in a challenge to the constitutionality of the DMCA.
The RIAA had threatened action under the DMCA against Felten and colleagues after they said they would publish a paper disclosing flaws in an industry security initiative. That suit was eventually dismissed.
-------------------- Just another spore in the wind.
Update In an abrupt reversal, SunnComm Technologies said Friday that it will not sue a Princeton University graduate student who published a paper that describes how to bypass CD copy-protection technology simply by pressing the Shift key.
SunnComm had angrily assailed Princeton doctoral student John "Alex" Halderman just a day before, claiming that his academic paper was "at best, duplicitous and, at worst, a felony." The company had pledged to file a civil suit against Halderman under the Digital Millennium Copyright Act (DMCA) and lobby federal prosecutors to indict him on criminal charges.
SunnComm CEO Peter Jacobs acknowledged his threat to file a lawsuit was a mistake. "I felt the researcher has an agenda, which he does," he said. "But that's not relevant, and I learned that...The long-term nature of the lawsuit and the emotional result of the lawsuit would obscure the issue, and it would develop a life of its own."
Jacobs refused to divulge the reasons for his change of heart, saying only that "when the original firestorm cleared and we had a chance to poll the different organizations (including customers, advisers and shareholders) I started to have a different picture on how to resolve the issue."
Halderman, the computer science graduate student, said Friday that he's "confident the paper doesn't violate the DMCA, but I'm glad they've decided to drop the matter."
SunnComm's threats had drawn enormous attention in a short time, with some legal analysts saying a lawsuit would represent an egregious abuse of the DMCA, which broadly prohibits "circumventing" copy-protection technologies. The law does contain narrow exceptions for reverse engineering and academic research, though two proposals in Congress would make the exemptions far broader.
Halderman's paper, published Monday and titled "Analysis of the MediaMax CD3 Copy-Prevention System," describes flaws in the MediaMax technology SunnComm sold and BMG Entertainment used on an Anthony Hamilton CD it released last month. It concludes that "most users who would be affected can bypass the system entirely by holding the Shift key every time they insert the CD," an action that prevents the MediaMax drivers from loading.
Since Halderman's paper appeared, SunnComm's shares have slipped precipitously, losing about $10 million in value. The company's stock appears on the Over-the-Counter Bulletin Board and was trading at 11 cents Friday morning.
Without giving specifics, SunnComm's original statement indicated that the company had planned to sue Halderman and claim libel or defamation in addition to the DMCA charges. "No matter what their credentials or rationale, it is wrong to use one's knowledge and the cover of academia to facilitate piracy and theft of digital property," the original statement said. "SunnComm is taking a stand here because we believe that those who own property, whether physical or digital, have the ultimate authority over how their property is used."
Sounding slightly bitter, Jacobs blamed reporters for the topsy-turvy week his company had experienced. "You can never underestimate the ability of the press to oversimplify the issue," he said. "It wasn't about the Shift key...It had nothing to do with that. It had to do with reviewing a rabbit when we invented the duck and saying the rabbit didn't work right."
Jacobs said MediaMax's security system, which he predicted would be adopted by three major record labels by the end of the year, "was designed for the 90 percent of the people out there who would never work around a technology.
"I didn't think that I could get joy; I didn't think I could relieve the problem by suing," Jacobs said. "If you want to call it a mistake, yes, it was a mistake to probably talk about launching some lawsuit. But the reality is you live, you learn--and you try to do the right thing all the time."
These companies know that they just need to wait for their friends in the RIAA lobby for stricter controls on free speech.