I disagree with my colleague.
It's unlawful to RENT a DVD movie and copy it in order to create your own movie library. It’s also unlawful to BUY a DVD movie and make a copy of it for anyone else. It is LAWFUL, however, to make a copy of a DVD movie that you have purchased if that copy is to be used solely for your own personal use -- such as to make a backup copy. That is not copyright infringement.
Moreover, the rule regarding bypassing the anticircumvention measures is clear: it is LAWFUL for an end-user to bypass anticircumvention measures attached to a copyrighted work if the circumvention results in a lawful copy of the work. The creation of a lawful copy occurs when the end-user has a "fair use" right to use the work -- such as making a copy solely for personal use.
This exact issue -- as applied to the circumvention of measures attached to DVDs -- has been litigated. See Realnetworks, Inc. v. DVD Copy Control Ass'n, 641 F. Supp. 2d 913 at 942 [ http://goo.gl/d7ciK ] (“Against this backdrop, the court appreciates Real's argument that a consumer has a right to make a backup copy of a DVD for their own personal use. … As noted above, the DMCA's ‘user exemption’ is only for the individual who has gained authorized access and who may circumvent the protection measures pursuant to lawful conduct, such as to make fair use of the subject work.”).
The Realnetworks, Inc. v. DVD Copy Control Ass'n decision (decided by the very respected Judge Patel of the Northern District of California) built upon the Federal Circuit's Chamberlain Group v. Skylink Tech., Inc., 381 F. 3d 1178 at 1192 et seq. (cert denied, 544 U.S. 923) decision [ http://j.mp/97ho1q ] which clearly discussed the limited purpose of the anticircumvention statute. The Federal Circuit followed up Chamberlain with Storage Tech. v. Custom Hardware, 421 F. 3d 1307 at 1318 et seq. [ http://j.mp/cCSipM ].
No, it is not. Fair use used to allow back up copies of things like CDs and VHS cassettes. But the DMCA was passed precisely to prevent you from making back up copies of DVDs. DVDs have a special encryption (at least commercial ones do) that you would have to crack in order to copy it. Cracking that encryption is the part that is illegal under the DMCA. So technically, you can make back up copies of DVDs that are not encrypted for personal use under the Fair Use doctrine. The problem is, they're all encrypted.