As reported earlier this month by the CBC, a Princeton student noticed, while loading a music CD into his PC, that pressing the Shift key disables BMG's copy-protection software. The CD can then be easily ripped. Ah, basic compensation principles in contract law ought to take care of our nerdy hacker friend you might be thinking. Buddy read the EULA (ha, ha ha - who the hell reads those?!), clicked Yes, then started messing around with reverse engineering and all that. Let him chew on the "Hadley" rules... Let's see... Software company says it lost $10 million since our friend breached contract and posted his info. Part 1 of "Hadley" says that in breach of contract the P. can recover losses that fairly and reasonably arise from the nature of the contract or losses that were supposed to have been contemplated by the parties at the time the contract was made. Part 2 says P. can recover losses that flow from his communication of special circumstances when D's knowledge of those special circumstances would reasonably allow him to realize that P. might suffer some extraordinary loss. QED cough up the $10 million. But wait, this gets better... Did our hacker hero agree to the bound by the evil EULA contract? Not really, he simply ignored it. Ordinarily, clicking on the "No" button under the EULA causes the CD to be ejected. Of course, clicking "Yes" means you agree to be bound by pages of legal handcuffs that make sure you spend the rest of your life doing workfare if you break the copy protection scheme. But in this case, the software protection was so shoddy you could ignore the EULA screen altogether and still access the music on the CD -- all without consenting to the EULA's contract clauses. Now the software-maker is suing the student for publicizing his find on the 'net. We'll see if their lawyers are as crappy as their engineers. Here's the link to the student's web site: http://www.cs.princeton.edu/~jhalderm/cd3/ By the way, did you know that pressing the Start key on the photocopiers in the law library allows you to disable the copy-protection on books? Oops,I better shut up, I can't afford a lawsuit right now. Princeton Student Sued Over Paper on CD Copying Thu October 9, 2003 06:07 PM ET By Ben Berkowitz 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 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 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 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.