Jailbreaking iPhone apps is now legal

NEW YORK (CNNMoney.com) -- IPhone users can now legally hack their phones to download applications that aren't in Apple's App Store.

The U.S. Copyright Office, a division of the Library of Congress, has authorized several new exemptions to the Digital Millennium Copyright Act (DMCA), one of which will allow mobile phone users to "jailbreak" -- or hack into -- their devices to use apps not authorized by the phone's manufacturer. The new rules will be published on Tuesday in the Federal Register.

Jailbreaking iPhones in order to download apps that are unavailable in Apple's App Store had been a legal gray area: Apple technically had the right to request a $2,500 government fine for damages every time a user violated the law that bans "circumvention of technological measures" controlling access to copyrighted works -- in this case, the iPhone's iOS software.

Apple (AAPL, Fortune 500) never actually requested that a fine be levied on an iPhone customer. But it fought to preserve its right to: Apple filed an objection last year to the rule the Copyright Office has now adopted.

The Copyright Office's decision means that jailbreakers will not face legal sanctions, but phone makers are still free to fight back technologically against the practice. Apple typically voids the warranty on iPhones that owners have hacked. The company maintains that tampering with the iPhone can introduce bugs and glitches.

"Apple's goal has always been to insure that our customers have a great experience with their iPhone, and we know that jailbreaking can severely degrade the experience," a company spokeswoman said in response to the Copyright Office ruling. "The vast majority of customers do not jailbreak their iPhones."

The Copyright Office also renewed and expanded its 2006 decision allowing mobile phone users to jailbreak their phones in order to switch carriers. Previously, the office allowed firmware updates to enable network-switching; this week, it added a provision allowing software hacks as well. In other words, iPhone users can now legally download software that will enable their phones to join a non-AT&T (T, Fortune 500) network.

The Copyright Office conducts an extensive rulemaking process every three years to determine what exemptions should be granted to the DMCA's anti-circumvention provisions. Each cycle, the office's previous exemptions expire unless they are renewed.

This time around, the Copyright Office granted six exemptions. In addition jailbreaking provisions, it renewed an exemption allowing e-book copy controls to be circumvented to enable read-aloud functions or to render the text into a specialized format. That's a clause advocates for the blind fought for.

The agency also granted an exemption allowing users to break DVD copyright controls to extract snippets of copyrighted movies for the purpose of incorporating them into new works, so long as the new creation is noncommercial. Known as "vidding," such remixing is a popular hobby among fan artists, and their creations are widely available for viewing on YouTube.

The ruling doesn't remove all of the legal murk around vidding. Creators still need to ensure that their clips meet "fair use" guidelines, and the Copyright Office specified that its exemption applies only to motion-picture snippets extracted "for the purpose of criticism or comment."

But advocates say the decision is a big step forward. Hollywood movie studios had long held that ripping DVDs for any purpose whatsoever is a violation of the DMCA.

"This ruling is useful because it removes a tool that was able to be deployed over and above copyright law that already has fair-use safety valves," said Rebecca Tushnet, a law professor at Georgetown University who testified in favor of the exception at a Library of Congress rulemaking hearing last year. "Now we're back to where we should have been all along, and we can continue the conversation about what's reasonable fair use."

Google (GOOG, Fortune 500) declined to comment on the implications for YouTube of the new exemption.

Lobbying group Electronic Frontier Foundation, which requested and backed the jailbreaking and remixing exemptions, celebrated its victory on Monday.

"We are thrilled to have helped free jailbreakers, unlockers and vidders from this law's overbroad reach," Jennifer Granick, EFF's civil liberties director, said in a prepared statement. "The Copyright Office recognizes that the primary purpose of the locks on cell phones is to bind customers to their existing networks, rather than to protect copyright."