Technically illegal, according to the DMCA and the EU Copyright Directive of 2001. Both are implementations of the 1996 WIPO Copyright Treaty.
http://en.wikipedia.org/wiki/Digital_rights_management
A few excerpts:
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Digital rights management systems have received some international legal backing by implementation of the 1996 WIPO Copyright Treaty (WCT). Article 11 of the Treaty requires nations party to the treaties to enact laws against DRM circumvention.
The WCT has been implemented in most member states of the World Intellectual Property Organization. The American implementation is the Digital Millennium Copyright Act (DMCA), while in Europe the treaty has been implemented by the 2001 European directive on copyright, which requires member states of the European Union to implement legal protections for technological prevention measures.
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But it appears there is no settled consensus:
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On 25 April 2007 the European Parliament supported the first directive of EU, which aims to harmonize criminal law in the member states. It adopted a first reading report on harmonizing the national measures for fighting copyright abuse. If the European Parliament and the Council approve the legislation, the submitted directive will oblige the member states to consider a crime a violation of international copyright committed with commercial purposes. The text suggests numerous measures: from fines to imprisonment, depending on the gravity of the offense.
The EP members supported the Commission motion, changing some of the texts. They excluded patent rights from the range of the directive and decided that the sanctions should apply only to offenses with commercial purposes. Copying for personal, non-commercial purposes was also excluded from the range of the directive.
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Note the last sentence above. Copying for personal, non-commercial use has been specifically excluded.
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There is also a technical, legal argument that DRM is itself illegal:
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Additional arguments against DRM are based on the fact that Copyright Laws limit the duration of copyrights, requiring that the DRM-restricted material be placed into the public domain at the end of the granted copyright period. DRM systems violate this requirement of copyright law inasmuch as DRM systems are not programmed to terminate at the end of the copyright period, effectively extending the "copyright" beyond what is allowable by law. As such, this use of DRM is arguably itself a violation of the same copyright law that the proponents of DRM claim the system enforces.
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In the US, the DMCA conflicts with settled precedents like this one:
http://www.law.cornell.edu/copyright...0_F3d_1072.htm
The relevant section is #32:
[32] In fact, the Rio's operation is entirely consistent with the Act's main purpose - the facilitation of personal use. As the Senate Report explains, "[t]he purpose of [the Act] is to ensure the right of consumers to make analog or digital audio recordings of copyrighted music for their private, noncommercial use." S. Rep. 102-294, at *86 (emphasis added). The Act does so through its home taping exemption, see 17 U.S.C. § 1008, which "protects all noncommercial copying by consumers of digital and analog musical recordings," H.R. Rep. 102-873(I), at *59. The Rio merely makes copies in order to render portable, or "space-shift," those files that already reside on a user's hard drive. Cf. Sony Corp. of America v. Universal City Studios, 464 U.S. 417, 455 (1984) (holding that "time-shifting" of copyrighted television shows with VCR's constitutes fair use under the Copyright Act, and thus is not an infringement). Such copying is paradigmatic noncommercial personal use entirely consistent with the purposes of the Act.
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Note the phrases "noncommercial copying" and "fair use".
I don't pretend to know where this will all end up, but the controversy is far from settled law anywhere.