Johansen is being accused of developing a software called DeCSS that allows users to crack the weak copy-protection mechanism called CSS found on most commercial DVD-Video discs. By cracking the encryption, users that don't have access to officially licensed DVD players (like Linux users) can watch DVD movies with their computers. As a side effect, the software also allows copying the DVD-Video disc to computers harddrive and distributing it over the Internet.
The most ridiculous thing in the whole process is the fact that Norway doesn't have any laws that would outlaw such activity and therefor Johansen is basically sued under laws that are meant for crackers who break into banks' computers and steal money. So, Johansen is being sued for breaking into his own, purchased DVDs.
Source: ABCNews.com