A Norwegian who defeated Hollywood on piracy charges pleaded not guilty yesterday in a landmark appeal hearing that the movie industry is anxious to win to protect its lucrative DVD business.

Prosecutors, on behalf of major US film studios, will try to prove that 20-year-old Jon Johansen broke Norwegian law when he developed and distributed a computer program that enables consumers to make personal copies of their DVDs.

The industry hopes to send a message to hackers that it will fight on any turf those who crack into their copy-protection systems in a global crackdown on piracy.

The plaintiff, the Motion Picture Association of America -- representing Hollywood studios like Walt Disney, Universal Studios and Warner Bros -- estimates that piracy costs the US motion picture industry $3 billion annually in lost sales.

The case in the Oslo Appeals Court is set to end on 12 December with a verdict expected in early 2004.

Johansen was dubbed "DVD-Jon" by the Internet community after he devised a computer program -- DeCSS -- in the late 1990s that enabled consumers to circumvent copy-protection technology embedded in ordinary DVDs.

Johansen was cleared of piracy charges in an Oslo court in January after a six-day trial, billed as a fight between a cyber David and corporate Goliaths.

The court ruled that Johansen could do whatever he wanted to DVDs he had legally purchased. The court also said prosecutors had failed to give evidence that Johansen's program had been used by others to copy and distribute pirated copies.

The prosecution this time intends to establish that Johansen broke the law when he cracked the copy-protection code on DVDs.

State prosecutor Inger Marie Sunde, who lodged the appeal objecting to the court's application of the law and the presentation of evidence, said: "The core of this case is the use of DeCSS in connection with legally purchased films...not on pirated copies."

Johansen, who developed the program when he was 15, has become a hero for hackers worldwide who say making software like DeCSS is an act of intellectual freedom.

Media and software executives argue rampant digital piracy threatens their livelihoods and creates a need for stronger technological stopgaps like digital rights management software to stop unauthorised copies of compact discs and DVDs.

The introduction of such technologies has triggered a showdown between copyright holders and consumer rights advocates who say such technologies rob individuals of the ability to make legitimate backup copies of what they buy.

"If Johansen's acquittal is overturned on appeal, it will become illegal for Norwegians to bypass DVD region code restrictions or technical restrictions that prevent fast-forwarding over advertisements or otherwise circumvent digital controls on their own property," said executive director Robin Gross of consumer advocacy group IP Justice in a statement.

There is no specific legislation in Norway to protect digital content. A European Union copyright directive gives individual countries the right to choose if they want to recognise legal protections for new digital rights management technologies.