30 August 2001: Typos corrected. Thanks to TJ.

29 August 2001
Source: http://www.usdoj.gov/usao/can/press/assets/applets/2001_08_28_sklyarov_ind.pdf  (248KB)

[7 pages.]

FILED
AUG 28 2001
RICHARD W. WIEKING
CLERK OF U.S. DISTRICT COURT
NORTHERN CALIFORNIA DISTRICT
SAN JOSE

CR 01 20138

ROBERT S. MUELLER, III (CSBN 59775)
United States Attorney

INDICTMENT

The Grand Jury Charges:

BACKGROUND

1. At all times relevant to the indictment:

a. Defendant Elcom Ltd., a/k/a Elcomsoft Co. Ltd. ("Elcomsoft"), was a software company headquartered in Moscow, Russia.

b. Adobe Systems, Inc., ("Adobe") was a software company headquartered in San Jose, California, that produced publishing software for various media including the world wide web, print, and video.

c. Defendant Dmitry Sklyarov was employed by Elcomsoft as a computer programmer and cryptanalyst.

d. RegNow was an online software delivery and payment service based in Issaquah, Washington.

e. Adobe distributed a product entitled "Adobe Acrobat eBook Reader" that provided technology for the reading of books in digital form ("ebooks") on personal computers.

f. Consumers who wished to purchase books formatted for the Adobe Acrobat eBook Reader ("eBook Reader") could download a free copy of the eBook Reader to their personal computer and then purchase the ebook from an online retailer. Upon purchasing the ebook from the online retailer, a series of electronic communications between and among the computers of the online retailer -- including, typically, an Adobe-supplied server -- and the customer's computer authorized the ebook to be read on the computer from which the purchase was made.

g. When an ebook purchased for viewing in the Adobe eBook Reader format was sold by the publisher or distributor, the publisher or distributor of the ebook could authorize or limit the purchaser's ability to copy, distribute, print, or have the text read audibly by the computer. Adobe designed the eBook Reader to permit the management of such digital rights so that in the ordinary course of its operation, the eBook Reader effectively permitted the publisher or distributor of the ebook to restrict or limit the exercise of certain copyright rights of an owner of the copyright for an ebook distributed in the eBook Reader format.

2. On a date prior to June 20, 2001, defendant Dmitry Sklyarov and others wrote a program called the Advanced eBook Processor ("AEBPR") the primary purpose of which was to remove any and all limitations on an ebook purchaser's ability to copy, distribute, print, have the text read audibly by the computer, or any other limitation imposed by the publisher or distributor of an ebook in the eBook Reader format, as well as certain other ebook formats.

3. On or about June 20, 2001, defendant Elcomsoft and others made the AEBPR program available for purchase on the elcomsoft.com website. Individuals wishing to purchase the AEBPR program were permitted to download a partially-functional copy of the program from elcomsoft.com and then were directed to pay approximately $99 to an online payment service RegNow, based in Issaquah, Washington. Upon making payment to the RegNow website, Elcomsoft and other persons provided purchasers a registration number permitting full-use of the AEBPR program.

THE CONSPIRACY

COUNT ONE: (18 U.S.C. § 371 -- Conspiracy to Traffic in Technology Primarily Designed to Circumvent, and Marketed for Use in Circumventing, Technology that Protects a Right of a Copyright Owner)

4. Paragraphs One through Three are realleged and incorporated in Count One.

5. On or about dates unknown, but beginning no later than June 20, 2001 and continuing until July 15, 2001, both dates being approximate and inclusive, in Santa Clara County, in the Northern District of California, and elsewhere, the defendants

ELCOM LTD.
     a/k/a ELCOMSOFT CO. LTD. and
DMITRY SKLYAROV,

and other persons, did knowingly and intentionally conspire, for purposes of commercial advantage and private financial gain, to willfully offer to the public, provide, and traffic in a technology, product, device, component, and part thereof, that was primarily designed and produced for the purpose of circumventing, and was marketed by the defendants, and others acting in concert with the defendants with the defendants' knowledge, for use in circumventing protection afforded by a technological measure that effectively protected a right of a copyright owner under Title 17 of the United States Code, in a work or portion thereof, in violation of Title 17, United States Code, Section 1201(b)(1)(A) and 1201(b)(1)(C).

METHODS AND MEANS OF THE CONSPIRACY

6. It was part of the conspiracy that the defendants and others did create the AEBPR program primarily to permit users of the program to circumvent copyright protections from ebook files.

7. It was further part of the conspiracy that the defendants did market, offer to the public, and traffic in the AEBPR program by making it available for purchase on the elcomsoft.com website and soliciting purchasers of the program by email.

8. It was further part of the conspiracy that the defendants and others did make the AEBPR program available on a computer server in Chicago, Illinois, from which any individual with access to the Internet could download a free copy of the program that permitted the individual to circumvent the copyright protections on approximately 10 percent of an ebook.

9. It was further part of the conspiracy that the defendants did charge a fee of approximately $99 for a fully operational version of the AEBPR program that would circumvent copyright protections on a complete ebook, and contracted with an online payment service, RegNow, to collect payments for the fully functional AEBPR program.

10. It was further part of the conspiracy that the defendants did provide a registration number permitting full use of the AEBPR program after a purchaser had paid for the program via the online payment service, RegNow.

OVERT ACTS

11. As part of the conspiracy, and to further the objects thereof, the defendants committed the following overt acts in the Northern District of California:

a. Beginning on or about June 20, 2001, the defendants offered the Advanced eBook Processor for sale in San Jose, California, and elsewhere, on the elcomsoft.com website;

b. On or about June 26, 2001, the defendants caused a purchaser in San Jose, California to send a payment of approximately $99 to RegNow; and

c. On or about June 26, 2001, the defendants sent a registration key for a copy of the AEBPR program to an individual purchaser in San Jose, California, who had made a payment of approximately $99 to RegNow.

All in violation of Title 18, United States Code, Section 371.

COUNT TWO: (17 U.S.C. § 1201(b)(1)(A) and 18 U.S.C. § 2 -- Trafficking in Technology Primarily Designed to Circumvent Technology that Protects a Right of a Copyright Owner)

12. Paragraphs One through Three are realleged and incorporated in Count Two.

13. On or about and between June 20, 2001 and July 15, 2001, both dates being approximate and inclusive, in Santa Clara County, in the Northern District of California, and elsewhere, the defendants

ELCOM LTD.
     a/k/a ELCOMSOFT CO. LTD. and
DMITRY SKLYAROV,

did willfully, and for purposes of commercial advantage and private financial gain, offer to the public and traffic in a technology, product, device, component, and part thereof, that was primarily designed and produced for the purpose of circumventing protection afforded by a technological measure that effectively protected a right of a copyright owner under Title 17 of the United States Code, in a work or portion thereof, in that the defendants offered the AEBPR program to the public for sale in the Northern District of California.

All in violation of Title 17, United States Code, Section 1201(b)(1)(A) and Title 18, United States Code, Section 2.

COUNT THREE: (17 U.S.C. § 1201(b)(1)(A) and 18 U.S.C. § 2 -- Trafficking in Technology Primarily Designed to Circumvent Technology that Protects a Right of a Copyright Owner)

14. Paragraphs One through Three are realleged and incorporated in Count Three.

15. On or about June 26, 2001, in Santa Clara County, in the Northern District of California, and elsewhere, the defendants

ELCOM LTD.
     a/k/a ELCOMSOFT CO. LTD. and
DMITRY SKLYAROV,

did willfully, and for purposes of commercial advantage and private financial gain, provide and traffic in a technology, product, device, component, and part thereof, that was primarily designed and produced for the purpose of circumventing protection afforded by a technological measure that effectively protected a right of a copyright owner under Title 17 of the United States Code, in a work or portion thereof, in that the defendants sold a copy of the AEBPR program to an individual in the Northern District of California.

All in violation of Title 17, United States Code, Section 1201(b)(1)(A) and Title 18, United States Code, Section 2.

COUNT FOUR: (17 U.S.C. § 1201(b)(1)(C) and 18 U.S.C. § 2 -- Trafficking in Technology Marketed for Use in Circumventing Technology that Protects a Right of a Copyright Owner)

16. Paragraphs One through Three are realleged and incorporated in Count Four.

17. On or about and between June 20, 2001 and July 15, 2001, both dates being approximate and inclusive, in Santa Clara County, in the Northern District of California, and elsewhere, the defendants

ELCOM LTD.
     a/k/a ELCOMSOFT CO. LTD. and
DMITRY SKLYAROV,

did willfully, and for purposes of commercial advantage and private financial gain, offer to the public and traffic in a technology, product, device, component, and part thereof, that was marketed by the defendants and others acting concert with the defendants with the defendants' knowledge, for use in circumventing protection afforded by a technological measure that effectively protected a right of a copyright owner under Title 17 of the United States Code, in a work or portion thereof, in that the defendants marketed the AEBPR program in the Northern District of California.

All in violation of Title 17, United States Code, Section 1201(b)(1)(C) and Title 18, United States Code, Section 2.

COUNT FIVE: (17 U.S.C. § 1201(b)(1)(C) and 18 U.S.C. § 2 -- Trafficking in Technology Marketed for Use in Circumventing Technology that Protects a Right of a Copyright Owner)

18. Paragraphs One through Three are realleged and incorporated in Count Five.

19. On or about June 26, 2001, in Santa Clara County, in the Northern District of California, and elsewhere, the defendants

ELCOM LTD.
     a/k/a ELCOMSOFT CO. LTD. and
DMITRY SKLYAROV,

did willfully, and for purposes of commercial advantage and private financial gain, provide and traffic in a technology, product, device, component, and part thereof, that was marketed by the defendants and others acting concert with the defendants with the defendants' knowledge, for use in circumventing protection afforded by a technological measure that effectively protected a right of a copyright owner under Title 17 of the United States Code, in a work or portion thereof, in that the defendants sold a copy of the AEBPR program in the Northern District of California.

All in violation of Title 17, United States Code, Section 1201(b)(1)(C) and Title 18, United States Code, Section 2.

DATED 8/28/2001

A TRUE BILL

[Signature]

FOREPERSON

ROBERT S. MUELLER, III
United States Attorney

[Signature]

ELIZABETH DE LA VEGA
Chief, San Jose Division

(Approved as to form:
[Signature]
AUSA FREWING

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