The Sony companies sued mod-chip seller Eddy Stevens in 2001, arguing that he had infringed Australian trade mark and copyright laws by selling pirated games and mod chips that could be used to run the games. They have now lost the part of the case relating to mod chips.
The suit concerned the Australian Copyright Amendment (Digital Agenda) Act of 2000, which makes it an offence to make, sell or promote devices to override copy-protection technology. Mod chips are devices that, once installed in a console, permit the use of imported games and back-up copies but can also be used to run pirated games.
The question for the court was whether the mod chips were a s copy protection system could be found to be a “technological protection measure.”
In 2002, a federal judge ruled that Stevens had infringed Sony's trade marks by selling pirated games. However he decided that chipping the consoles was not illegal, reasoning that modified chips overrode a device that only prevented copied games from being played and did not prevent them being copied in the first place. Sony’s device was not therefore a technological protection measure.
Sony appealed the ruling, and in August 2003 the Court of Appeal unanimously held that the federal judge was wrong. In its opinion, the fact that Sony's system made the copied games unusable was sufficient to bring it under the protection of the Digital Agenda Act.
Stevens appealed to the High Court of Australia. In a unanimous ruling the country’s top court today upheld the federal judge’s original decision, accepting his construction of a “technological protection measure” as a device which denies access to a copyright work or which limits capacity to make copies of a work and thereby prevents or inhibits the undertaking of acts which would infringe copyright.
In the UK, the modification of consoles has been an illegal practice since 31st October 2003, when Regulations were passed that made an amendment to the Copyright Designs and Patents Act.
The new regime allows rightholders to take action against individuals who circumvent what the law calls Technological Protection Measures, or TPMs, to make unauthorised use of copyrighted works. Action, including criminal action, can also be taken against those who make and distribute equipment designed to circumvent TPMs.
Accordingly, the whole process of chipping consoles is illegal, including selling and advertising chips as well as providing a service for chipping.
The UK saw its first criminal conviction for the illegal modification of video games consoles in July.