The problem is that the iPhone's digital rights management system not only prevents people from illegally copying its software, it also blocks legitimate users who want to run software on the device that is not approved by Apple, according to EFF attorney Fred von Lohmann. "When an iPhone owner jailbreaks her iPhone, no copyrights are infringed," he said in an e-mail message. "Granting an exemption will not reduce the availability of iPhone firmware or apps -- in fact, it's likely to increase the availability of both, by creating a more competitive, vibrant, consumer-driven marketplace."

If the EFF wins its case, users will not only be able to jailbreak the iPhone without running the risk of facing a DMCA lawsuit. They'll be able to legally bypass similar technology on other phones too, such as T-Mobile's Android-based G1 phone.

The Copyright Office isn't expected to make a decision on the jailbreaking issue until October, von Lohmann said, but even if Apple loses, Apple could still decide to go after jailbreakers, saying they violated their iPhone license agreement. "But an exemption would be a significant step toward legalizing jailbreaking," he added.

Whatever happens, these arguments will probably be made again in 2012. DMCA exceptions have a shelf life of three years.