(FRAMINGHAM, MA) -- Microsystems Software, maker of the Internet filtering software Cyber Patrol, announced today that it had reached agreement with the defendants it sued for violating copyright by reverse engineering its software and posting source code for the purpose of teaching other hackers how to do the same.

The company did not file the lawsuit to prevent publication of the CyberNOT filtering list but only the copyrighted source code for the product and the primitive software product derived directly from the reverse engineering of the source code. The hackers' program, derived from the stolen material, allowed children to obtain their parents' passwords but did not provide a list of filtered URLs.

Mathew Skala and Eddy Jansson, citizens of Canada and Sweden, agreed late last week to sign over all rights to the source code and executable software programs. The two defendants also agreed through their lawyers to never again hack into Cyber Patrol software or aid anyone else in a similar attempt. They agreed to a permanent injunction, extending the temporary restraining order issued on March 17 by U.S. District Court Judge Edward F. Harrington.

The judge on Monday extended the temporary restraining order and indicated that he would be issuing a permanent injunction in the next few days. The judge said he wanted time to examine the scope of the permanent injunction as it applied to mirror sites.

Skala and Jansson and their Internet Service Providers, Islandnet.com and Scandinavia Online AB removed the illegally obtained material from their Web sites within hours of receiving notice of the court order.

``We have achieved our goals of protecting Cyber Patrol customers and defending the company's intellectual property,'' said attorney Irwin Schwartz of Schwartz-Nystrom, LLC, representing Microsystems, a division of Mattel, Inc.

``This case is about a violation of copyright law and about a judge's ability to permit parents, rather than hackers, to decide what's best for their children. It is not infringing on anyone's right to free expression unless they are displaying material in violation of copyright law.'' Schwartz said.

Skala, a university student in Canada, stipulated to the entry of an injunction against him in the British Columbia courts, a violation of which could subject him to criminal penalties, including jail time. Jansson, an unemployed resident of rural Sweden, stipulated to a fine equal to about $100,000 if he violates the agreement.

Microsystems filed suit after learning that two hackers had broken into the home version of Cyber Patrol created to help parents manage how their children surf the Net. Cyber Patrol operates off a list of sites created over the last five years by a team of researchers. The software, which is password controlled by parents, also allows families to control how much time their kids spend online, what time of day they surf and what sort of chat rooms they can visit.

The defendants reverse engineered the product, decompiled the copyrighted source code and posted pieces of the protected code and binaries online. They also posted an essay describing how they had violated the company's copyright and bragged about their activities in an e-mailed press release. They wrote that their purpose was to provide instructions for hackers interested in breaking into Cyber Patrol and other Internet filtering products.

Microsystems did not object to the essay or any of the other material posted by the defendants that was not obtained or derived by violating Microsystems' copyright.

When Microsystems filed the suit March 15, the defendants and their sympathizers began urging others to copy the stolen material on ``mirror'' sites in defiance of the potential upcoming court order. Many of the sites were on servers in the United States, including Massachusetts.

Two days later, Judge Harrington granted Microsystems the temporary restraining order and extended it to include the ``mirror'' sites. Microsystems sent e-mail notices to Web masters and Web hosts of the ``mirror'' sites that they were in potential violation of a U.S. court order. The e-mailed notices were followed by certified mail. Many of the sites and links to the sites were voluntarily removed.

The motion by the ACLU sought to remove responsibility from those sites that carried the copyrighted material. Judge Harrington will examine whether or not the injunction should apply to these copycat sites.

Microsystems, meanwhile, issued a new version of its filtering product that is not affected by the hack. Web sites containing the information that allows someone to circumvent the product have been placed on the list of sites blocked by the product.

The defendants used the source code taken from the product to create an ``executable,'' TK-define, that allowed a child to gain access to a parent's password to disable the product. Some of those promoting the rights of the defendants to violate copyright said the executable allowed parents to view the list, but in fact it only provided an incomprehensible list of ``hash codes'' that required decryption to be readable to anyone but highly sophisticated computer users or software programmers.

Judge Harrington noted that Cyber Patrol is designed to help parents protect their children from pornographic, violent or other inappropriate material. ``It seems to me that parents have the right to block such pernicious material,'' the judge said.