Thanks to Kat to pointing out this rather interesting attempt to explain legal relations to computer geeks. I like the Paranoia reference.
Of course, he's not entirely right: Copyright law doesn't deal with things as small as "bits". Copyright law doesn't care about the details of the representation; as far as the law is concerned, files generated by Monolith aren't distinguishable at all from the original content; they're just encoded in a funny way. And encoding doesn't matter. So, really, it's not about whether your bits have the "copyright Colour" (which, according to this guy, only exists for lawyers), but really rather bits exist at all. The "I can't distinguish this file from random noise" is simply false: you can distinguish it from random noise by decoding it. If it were random noise, it would still be random noise after decoding, but it's not.
It is a truism that computer geeks routinely babble nonsense about copyright, usually because they use analysis techniques that are based on strict logicalism, instead of the goal-oriented legal reasoning methods that lawyers are taught and routinely use. In law, if a strict application of some rule leads to an absurd result, you ignore the result, and find some other rule to apply in that situation that doesn't lead to an absurd result. The law doesn't like absurd results (they're called "antinomies" in some older texts); judges tend to scoff at the idea that they should require something absurd and will generally find a way out if given the chance.
He does, however, get it basically right: "Colour" is not a characteristic of bit sequences; it's a characteristic of processes and of history. Ultimately, law isn't about things. It's about people, and more specifically the relationships between them. Nothing can be evaluated in a legal sense without knowing the context and history in which the evaluation is required. And that's a large part of why computers cannot, on their own, enforce laws: there is always the possibility of a context or a history which the designers of the "enforcement system" didn't envision. People have the flexibility to deal with that and move on; computers, not so much.