Russell Sprague was arrested at his home in Chicago

Russell Sprague, 51, faces up to three years in prison for creating pirate copies of films including Kill Bill: Vol 1 and Seabiscuit.

Assistant US attorney Chris Johnson postponed sentencing, saying he needs more time to calculate studio losses.

On Monday, film studio representatives and independent film-makers met to discuss the ongoing piracy issue.

The meeting, led by Jack Valenti, president of the Motion Picture Association of America (MPAA), involved the major studios, independent film companies and awards-voting groups.

The parties were recently involved in a row over preview DVD and video tapes, known as screeners, being distributed to award judges.

And they continue to disagree over the significance of screeners in worldwide piracy.

Watermarking

But most of those attending the meeting in Los Angeles agreed the recent implementation of watermarking had been an effective tool in the fight against piracy.

"Everyone in the room, including the FBI, agreed that watermarking technology has lessened the problem of piracy in connection to screeners," said Independent Feature Project director Michelle Byrd.

"This means a step has been made in the right direction to provide technological solutions to combat piracy that don't discriminate against independent films."

A step has been made in the right direction to provide technological solutions to combat piracy Michelle Byrd

Last year, the MPAA banned the distribution of preview tapes to awards judges, claiming they increased the likelihood of piracy.

Opposing arguments

The ban was partially lifted after independent production companies complained that screeners were vital in ensuring that awards judges saw their work.

Kill Bill was among those films targeted by pirates

Factions both for and against the preview tapes were able to back up their respective positions.

Independent film companies claimed award-winning movies like Whale Rider and The Station Agent would not have achieved the same degree of recognition had it not been for the availability of preview tapes.

Nonetheless, the FBI have traced piracy cases, like the one involving Russell Sprague, back to copies sent to members of the Academy of Motion Picture Arts and Sciences.

No decision

Actor Carmine Caridi, who had been an Academy of Motion Picture Arts and Sciences member, admitted in an affidavit he sent Mr Sprague copies of several movies. He has not been charged.

No decision has yet been taken over the mailing of preview tapes in the run up to this year's award season, although awards groups continue to insist the tapes are vital for their members.

"It was made clear at the outset of today's meeting that the MPAA cannot and will not make any policy regarding screeners," a statement by the MPAA said.

"Going forward, each distributor will determine its own policy on this matter."