Neil Higgs ran a business called Mr Modchips selling computer
chips that helped consoles to play computer games that were fitted
with copy protection. It allowed users to play legitimate games
from other parts of the world whose use was supposed to be
geographically restricted and also pirated games.
He faced criminal prosecution under the Copyright, Designs and
Patents Act and was convicted last year. That conviction was
quashed on appeal, though, because the prosecution failed to make
the right arguments in court, Lord Justice Jacob said.
The case rested on the status of copy-protection technology,
referred to in the Act as 'effective technological measures'.
Higgs was said to have breached section 296ZB of the Copyright
Act, which says that someone has committed an offence if they
manufacture or distribute anything which is "primarily designed,
produced, or adapted for the purpose of enabling or facilitating
the circumvention of effective technological measures [ETMs]".
The prosecution argued that Higgs was guilty because he made
technology available that encouraged and exploited a market in
pirated games which would depend on the circumvention of ETMs.
Lord Justice Jacobs said that this was not the right argument to
make, and that the prosecution had, crucially, not proved that the
ETMs actually worked.
"Is it enough if the technological measure is a discouragement
or general commercial hindrance to copyright infringement or must
it be a measure which physically prevents it?" he said in his
ruling. "To our minds the position is clear – it is the
latter."
He said that it was open to the prosecution to make a much more
convincing argument, which was that Higgs's technology allowed the
playing of pirated games which itself involved an infringement
because it necessitates the copying of a game in the console from
the CD-Rom.
"It may well be that if the legislation had been less complex
and/or the Crown had had greater opportunity to consider the
details of copyright law the case would have been proved on the
basis that merely playing a pirated game involves making a copy in
the console and thus involves infringement," wrote Lord Justice
Jacob.
"Mr Higgs is a fortunate man … he may also be fortunate that, at
least this far, he has not been sued in the civil courts," he wrote
in his ruling.
The judge said that if the prosecution had argued that the use
of a modified console involved infringement of copyright for which
Higgs bore some responsibility then it may have met with
success.
"If such had been contended and proved (as it would seem very
probably it could have been), it is difficult to see what defence
there might have been," said Lord Justice Jacob.
Computer consoles and games are divided into three regions, the
US, Japan and the rest of the world. The machines are told only to
play original bought copies of games from the same region as the
player.
Mod chips allow a machine to be used to play games from another
region or games that are unauthorised copies, so the selling of mod
chips is a threat to the business models of console manufacturers
who often sell machines at a loss in order to make profits on the
games.
Higgs's business was in supplying mod chips, fitting them to
customers' machines and selling machines with chips already fitted
to them.
