The U.S. copyright office issued exemptions to the Digital Millennium Copy Act, giving legal protection for people who unlock their smartphones to run third party applications or change the wireless service providers.

The move by the copyright office, which is part of Library of Congress, will undermine handset makers like Apple Inc's ability to control the installation of software programs on iPhone.

Some users break into iPhone -- a concept known as 'jailbreaking' -- to run applications and software programs that is not approved by Apple.

The Library of Congress, which can define exceptions to existing copyright laws, said in a statement that a user can circumvent the phone's functionality to use any legally obtained software.

The ruling also allows users to change the wireless service provider. Currently, AT&T Inc is the sole wireless service provider for Apple in the U.S.

"More than a million iPhone owners are said to have 'jailbroken' their handsets in order to change wireless providers," Electronic Frontier Foundation, which fought for the exemption, said in a separate statement.

Meanwhile, an Apple spokeswoman told the Wall Street Journal that "jailbreaking can severely degrade the experience" of the iPhone and that it "can violate the warranty and can cause the iPhone to become unstable and not work reliably."

Apple could not immediately be reached for comment by Reuters outside regular U.S. business hours.

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