If convicted, Dmitry Sklyarov, 27, could face up to five years in prison for each count in the federal indictment and fined $250,000. ElComSoft Co. Ltd. of Moscow could be fined $500,000 if convicted.
Prosecutors said the indictment, announced Tuesday, was the first under the Digital Millennium Copyright Act, which forbids technology that circumvents copyright protections.
The indictment alleges that the programmer and the company conspired for "commercial advantage and private financial gain."
The closely watched electronic publishing case has generated international protests since Sklyarov was arrested in Las Vegas on July 16. He was preparing to return home to Moscow after speaking at a computer security convention.
The program is legal in Russia. Sklyarov's supporters say his work merely restores the "fair use" privileges consumers have traditionally enjoyed under U.S. copyright law.
Defense attorney Joseph Burton said he had been trying to work out a plea bargain.
"We were hopeful that the government would see the wisdom and justice in not pursuing a case against Sklyarov," Burton said. "Even if one were to ignore the serious legal questions involving the (copyright protections), this case hardly cries out for criminal prosecution. Sklyarov's and ElcomSoft's actions are not conduct that Congress intended to criminalize."
Sklyarov, who is free on $50,000 bail but must remain in Northern California, was to be arraigned Thursday.
San Jose-based Adobe Systems had complained to the FBI that Sklyarov's employer was selling a program that let users manipulate Adobe's e-book software so the books could be read on more than one computer or transferred to someone else. Adobe dropped its support of the case on July 23.
The indictment said ElcomSoft was culpable because it sold the program for $99 in the United States through an online payment service based in Issaquah, Wash., and with a Web site hosted in Chicago.
It was not immediately clear how ElcomSoft would be tried in the case. Sklyarov is the only member of the company to have been arrested.
Critics of the Digital Millennium Copyright Act say it represses free speech and legitimate computer research. At least one lawsuit seeks to have aspects of the law declared unconstitutional.
"If there are legal things to do with the tool, then you don't ban the tool and you don't ban the person who came up with the tool," said Brad Templeton, chairman of the Electronic Freedom Foundation, an Internet civil liberties organization based in San Francisco.
By Brian Bergstein
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