Lulzsec, hacking and the Computer Misuse Act 1990

Remember all those stories back in 2011 about Lulzsec, the hacker group behind a number of hacking attacks  – including one against Sony as well as various government bodies, including possibly the CIA?  It hasn’t ended well for at least some of their members – a number of whom have pleaded guilty to criminal charges in the UK, according to the BBC.

I thought I’d write a quick post about this just to emphasise that these examples show that hacking attacks, including DDoS (distributed denial of service) are illegal (in the UK at least anyway).  It’s set out in the Computer Misuse Act 1990 (amended, for those who care, by the Police and Justice Act 2006) which, as it happens, was the subject of  one of the very first blog posts on Gamer/Law,.. Continue reading Lulzsec, hacking and the Computer Misuse Act 1990

Hacker jailbreaks PS3, pwned by Sony

Last week news emerged that a group of hackers, led by one George Hotz, have jailbroken the PS3 – in other words, they had successfully circumvented the security measures put in place by Sony to prevent users from running whatever programs they like on the PS3.  
This has caused shockwaves to say the least, particularly given Sony’s previous claims regarding the impregnability of the PS3.  You can read more about what happened regarding the hack itself via the BBC or have a look at Rob Fahey’s editorial about it on
Ofc, I’m interested in the legal aspects of this incident.  As, it seems, are the handful of my readers who emailed me to ask what might happen to George Hotz as a result of his hacking escapades.  And the answer is….Sony are suing him.
As reports:
“[Sony] alleges the defendants “circumvented effective technological protection measures” for the PlayStation 3 and other copyrighted works, and “trafficked in circumvention technology, products, services, methods, codes, software tools, devices, including but not limited to the Elliptic Curve Digital Signature Algorithm Keys, encryption and/or decryption keys, dePKG firmware decrypter program, Signing Tools, 3.55 Firmware Jailbreak, and/or any other technologies that enable unauthorized access to and/or copying of PS3 Systems and other copyrighted works.
Sony alleges the defendants have violated the Digital Millenium Copyright Act, the Computer Fraud and Abuse Act, the Copyright Act and related state and common laws covered by the California Comprehensive Computer Data Access and Fraud Act, according to legal filings published by Hotz.  “
A DCMA action was pretty much inevitable once word of this got out.  For non-US readers: the DMCA makes it illegal for you to try to circumvent technological protection measures which a software company puts in place to protect its software (the equivalent in the UK is in the Copyright, Designs and Patents Act 1988 – you can read more about that here in the context of modchips).  One example is The Warden, the anti-bot program used in World of Warcraft (and recently in the court’s spotlight as part of the WoW Glider case).  Another is the technical measures put in place by Sony in the PS3 which Hotz has now broken.  Difficult for me to see how Hotz will be able to avoid a successful DMCA claim, personally.

UPDATE: Jono793 points out that there could be complications in Sony’s DMCA argument given that it was only a flaw in Sony’s security which allowed Hotz to jailbreak the PS3 in the first place.  I imagine this would mean an enquiry into the arcane detail of the DMCA in order to determine whether that is a problem for Sony.  However, it seems to me that if the court allowed a loophole for circumvention devices which do not work properly, it would be opening the floodgates to that argument in every DMCA case going forward – perhaps unlikely therefore.

Then there are some other claims being advanced by Sony.  The copyright claim is another no-brainer and goes hand-in-hand with the DMCA claim.  I imagine the copyright argument goes something like this: the PS3 console software is a copyright work, which you are only allowed to use in accordance with a EULA.  If you jailbreak that software, you are outside the scope of the EULA and therefore likely committing copyright infringement.  Which is a Bad Thing – not least because, in the USA, it can lead to huge damages awards against the infringer.

UPDATE: As Artfunkel notes in the comments below, the copyright claim might not be that straightforward to run.  After all, a jailbroken PS3 runs the same software – the same games – as a vanilla PS3.  Sony could ofc argue that a jailbroken PS3 is a breach of the EULA and therefore automatically copyright infringement – but that argument didn’t get very far in the WoW Glider appeal recently.  If this case fights, there could be some complex legal argument here.
Lastly, there is what looks like a claim over the act of hacking itself.  Again, no surprises there: generally it is illegal to hack software belonging to someone else, regardless of what you do with the fruit of that hacking – whether it  be private use or public dissemination.  Sony is of course using a Californian statute; for those who are interested, the principal UK equivalent is the Computer Misuse Act 1993, which you can read more about here.
So, all in all, no great surprises here – Sony really had no choice but to take these actions.  In practical terms, it seems they are applying for a restraining order and injunction against Hotz, which if successful would at least stop him distributing the hack.  Good luck to them.
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WoW Glider: what actually happened in the courtroom

Last week I wrote an analysis of the Blizzard/WoW Glider case, which got a decent amount of press on the mainstream games sites and led to an awesome debate/flame war/hilarity in the comments to my original post – see here.
One (anonymous) poster wrote up a tongue-in-cheek script for what might have happened in the courtroom, which I liked so much I decided to post it properly below. Enjoy – and if you’re the writer of this piece of genius, let me know for credit….
Blizz: …So in conclusion, please order Michael “Mike” Donnelly to shut down Glider, and also buy us all Yachts. Cuz really, that’s what we were gonna do with it anyway. Either that, or nerf rogues.
Judge: I hate rogues too! B*ggers always gank me when I’m afk taking a leak…
Blizz: Well, we DID nerf stealth by making it MUCH easier to detect. Obviously there were complaints, but PR’s got it covered with the usual run-around.
Judge: Oh sh*ts, I know SOMEONE who’s gonna win a lawsuit if they’d keep a certain class from ever stealthing aga-
Mike: Uh, your honor?
Judge: shut up, Mikey Mike. I’m talking business here. So anyway, this one time I was THIS CLOSE to getting that peacebloom, when I hear that WOOOO, ya know? And then I-
Mike: Your honor, the case?
Judge: FINE, but you BETTER make it a good one, I’m one global away from swinging my Gravel of Justice in favor of Blizz here.
Mike: Thank you, your Honor. Well, ladies and gentlemen of this “supposed” jury, Blizz would like you to believe they made my Glider program illegal. And they make a good case. Hell, I even felt pity myself! But ladies and gentlemen of this “supposed” jury, I have one final piece of evidence for you to consider…
Blizz: (Wait, isn’t this a South Park skit?)
Judge: When did that chartboard get here? Warden, did you catch that?
Warden: No, but there’s a guy in Diremaul who hasn’t logged off in 3 days straight…
Blizz: SEE?! They’re RUINING us!1!
Judge: Really? I mean, it’s just Diremaul. Honestly, have you guys actually tried to run your own instances? They really suck sometimes.
Blizz: Uh… well, we ARE in the process of streamlining the PVE content in order to re-optimize the percentage of numbers such that they increase with better lateral passing.
Judge: …oh.
Phoenix Wright: OBJECTION!
Judge: wat
Phoenix: The excuse offered by Blizz doesn’t make even the most remote logical sense! It’s just words they strung together from what little they remember during the last manager’s meeting in Vegas! Furthermore, “lateral passing” isn’t even an economics term! It’s from football!
Judge: He’s gotcha there, Blizz.
Blizz: Oh yea? Well guess what Phoenix? You just lost.
Phoenix: ?
Blizzard: THE GAME! lol
Judge: lol
Phoenix: !!!
Mike: /sigh
Blizz: Hey! That’s OUR property there!
Mike: You know what, I give up. I had this wookie I was gonna show and everything, but seriously this is just too stupid. (morons, every one of them)
Judge: You heard the man, he sai- wait.
Blizz: ?
Mike: ?
Judge: … did he say he had a wookie to show us?
Mike: (Oh, God…)
Mike: /facepalm
Blizz: STOP IT! God, make him stop! He’s stealing our stuffs!
Judge: Really? What happened?
Judge: Fair point.
Mike: For the love of… you, please just get me out of here. I can’t take this any more.
Mike: I know I’m gonna regret this, but… why not, God?
Blizz: lol! He’s doing the D2 Barb lines!
Judge: lol! His voice is perfect for it too! Do the A1Q1 quest completion line!
Judge: lol
Blizz: lol
Warden: lol
Phoenix: lol
Mike: Fuck it. I’ll see you all in appeals. /camp
Judge: Is that… is that when he’s going to die?
Blizz: Now THERE’S a marketing pitch! “WoW: the only game fit for God!”
Blizz: we’ll talk to Popcap, make it an addon.
…And that’s how a massive lawsuit between a company and some dude brought about the addition of Bejewled into WoW.”
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Thoughts on the WoW Glider appeal

A US appeal court has upheld the illegality of WoW Glider, a high-profile and profitable bot for Blizzard’s World of Warcraft (hat-tip to Nic Suzor).  The case is important both for its implications for bot use generally in MMOs as well as for a number of other legal points for games companies which come out of the case.  The case was also not a clean win for Blizzard, which suffered setbacks in two important parts of the case.

The background

Glider allows players to level up automatically within WoW by playing their avatars for them.  It therefore bypasses the level progression built into WoW.  Glider was built by MDY Industries, which is owned by Michael Donnelly, who sold it to WoW players for a lot of money.  Interesting fact: Donnelly made $3.5m profit off WoW Glider, apparently.

Blizzard did not like Glider, unsurprisingly, and told MDY to stop selling it.  MDY then commenced legal action seeking to justify the legality of Glider.  In 2008, a California court held against MDY, finding both that Glider involved copyright infringement of WoW and that it contravened the Digital Millenium Copyright Act.  That last bit needs a bit of explanation for non-US readers: the DMCA makes it illegal for you to try to circumvent technological protection measures which a software company puts in place to protect its software.  In this case the principal protection measure is The Warden, a program that Blizzard uses to track down bots – and which Glider was designed over time to evade.

Having lost the lawsuit, Donnelly and MDY were therefore made subject to a huge $6.5m fine and ordered to stop selling Glider.  They appealed – and the judgement from the US 9th Circuit appeal court has now arrived.

Key points from the case

  • Blizzard lost its copyright infringement argument.  In a nutshell, it argued that its EULA prohibits bot use and therefore, if a player uses Glider, that is a breach of the EULA and constitutes copyright infringement, for which MDY should be legally responsible as it sells Glider in the first place.  The court held that in fact using a bot does not involve copyright infringement, it just means a breach of contract (i.e. of the EULA).  In other words, using or selling Glider is still illegal because it involves breach of contract, but it’s not quite as illegal as Blizzard made out, i.e. copyright infringement.  This has important practical consequences, because it significantly limited the legal penalties that Blizzard could seek against MDY.  It is also significant legally, because it is the first time that a court has found that using a bot does not involve copyright infringement.
  • However, Blizzard won the DMCA argument.  The court found, again, that because Glider is specifically designed to evade The Warden, it therefore fell foul of the anti-circumvention laws in the DMCA.  Therefore, the court upheld the ban on Glider, even though MDY had ‘won’ the copyright argument.
  • Because Blizzard lost the copyright infringement argument, the court effectively overturned the massive $6.5m fine against Donnelly and MDY.  Which must be a relief for them.  But it doesn’t get them entirely out of the financial wood because…
  • Blizzard had also run a ‘tortious interference with contract’ argument – i.e. it wanted MDY to pay for the damage that Blizzard suffered due to Glider, which appears to have been lost subscriptions.  In the lower court, Blizzard won this argument, but the appeal court now basically has ordered a re-trial.
  • We’ll very likely see this in the courts again, either because of the partial re-trial or because one or both parties attempts to appeal the case up to the US Supreme Court.

Other interesting points:

  • The court affirmed the decision in Vernor v Autodesk earlier this year that games ‘owners’ in fact only license their games, they do not own them (read more here: what Vernor v Autodesk means for games)
  • Blizzard apparently spends “$940,000” a year responding to complaints regarding anti-bot activities (contrast that with the $3.5m profit Donnelly made on Glider sales).  Still, I wonder how much extra Blizzard spends on actually combatting the bots themselves.
  • Interestingly, MDY’s explicit business model was to make it so commercially difficult for Blizzard to continue its anti-bot activities that it would effectively allow Glider to continue. 

So what?

It might sound like a lot of legalese, but really this is a milestone lawsuit in the games industry:

  • It shows yet another weakening of the EULA.  Just because Blizzard said that using a bot was illegal and a breach of copyright, didn’t actually make it so.  Expect more hard looks at the EULA in the future.
  • On the other hand, it shows how important the DMCA is to protecting games in the US.  The equivalent in the UK is the Copyright, Designs and Patents Act 1988 (you can read more about that here in the context of modchips).
  • It also shows that Blizzard really doesn’t like bots.  Its legal costs must be quite substantial by now and, the court having ordered that each side pay its own costs, it can’t recover them from MDY.  That’s a lot of money to spend going after one bot, but Blizzard must have been banking that it will have a deterrent factor on other bots in the future.

Finally, here’s the really interesting question for me: MDY lost not because of Glider itself, but because it circumvented The Warden.  What if there was an MMO with no such protection program in place (and, perhaps, with a less strict EULA too)?  In that case, there is at least an argument I think that bots could be ‘legal’ for that game.  Food for thought, eh?

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Image credit: Juanpol/Flickr, via Wired

Setback for Jagex in Runescape lawsuit

Jagex, developer of the popular browser MMO, has suffered setbacks in its ongoing lawsuit against Impulse Software, the maker of a bot for Runescape called the “iBot”.  This follows attempts in 2009 by Runescape to take legal action against a gang of UK phishers.

First, a quick summary

Impulse’s bot (like most bots) allows players to level up their avatars faster by playing for them.  Jagex, understandably, was not happy with this.  It therefore brought a lawsuit against Impulse Software in the US, bringing claims under the Computer Fraud and Abuse Act, as well as claims for copyright infringement, DMCA violations, and trademark infringement. 

As part of that lawsuit, Jagex sought a preliminary injunction against Impulse banning it from sale or use of the iBot.  This then came to a court hearing, with Impulse contesting the injunction.  The court has now published its judgment denying Jagex that preliminary injunction, during which it commented on Jagex’s claims generally.  A quick summary follows:

Copyright claim: Jagex argued that Impulse’s iBot infringed the copyright works in its game.  The court felt that Jagex’s copyright claims were “unlikely to succeed” since it had not made all the necessary copyright registrations (in the US, for a copyright to be protectable it needs to have been registered with the US Copyright Office – unlike in the UK where there is no registration requirement and generally copyright works becomes protectable as soon as they have been creatted).  In particular, Jagex had not registered copyright in its website or software.  As a result, Jagex could not argue that Impulse had ‘copied’ its copyright works.

DMCA claim: The US Digital Millenium Copyright Act bans attempts to circumvent ‘technological measures’ put in place by owners to protect their copyright works (an example would be DRM technology).  The UK analogy is the Copyright Designs and Patents Act 1998 (you can read more on how it works in the UK here).  Jagex argued that Impulse use of its iBot breached the DMCA provisions.  Again, the court was unpersuaded by Jagex’s argument, because Jagex could not rely upon any registered copyright works that needed protection, or that there were any ‘technological measures’ in place to protect them.

Trademark claim: Jagex argued that Impulse had infringed its trademark in the name “Runescape”.  The court found against Jagex again, on the basis that Impulse had removed any references to Runescape and instead used “RS” throughout.  Jagex argued that the term “RS” was itself infringing on its trademark by causing consumer confusion between Runescape and the Impulse bot, as everyone knew that “RS” was being used to mean Runescape.  The court found against Jagex, on the basis that there could not be consumer confusion between a game and a bot intended to cheat that game.

Computer Fraud and Abuse Act claim: This law protects (as you might expect) against the misuse of someone’s computers for fraudulent and other purposes (a good example would be hacking).  The UK equivalent is the Computer Misuse Act (more on that here).  Jagex’s argument seems to have been that, while Impulse itself did not attack the “protected computers” in question (Runescape’s servers), they assisted players to attack those servers by providing the bot to them.  I won’t get into the detail, but the court found against Jagex on this argument as well.

Ruling on the preliminary injunction: having gone through the substantive legal claims, the court considered the preliminary injunction which Jagex sought, to obtain which Jagex had to prove (i) it would suffer irreparable harm if the injunction was not given; (ii) the balance of equities (i.e. probability) fell in its favour and not Impulse’s, and (iii) the public interest was in favour of granting Jagex the injunction.  Unfortunately, the court found against Jagex on all three counts.  As a result, the court denied Jagex’s application for a preliminary injunction.

What next?

Jagex is still free to pursue its lawsuit against Impulse, albeit without having been able to restrain the use of the iBot in the meantime (which Impulse presumably will continue to sell).  But clearly Jagex will have to look very carefully at what the court said about the merits of its claims – which were not positive.

Lessons to be learned:

  • THIS CASE DOES NOT MEAN THAT BOT MANUFACTURERS HAVE A FREE HAND.  We’ve seen on a number of occasions that games companies have successfully used litigation to shut down bot manufacturers and other illegal attempts to tamper with their game, usually using very similar arguments to those advanced by Jagex here.  Take for example Blizzard v Scapegaming last month, or the WoWGlider lawsuit before that.
  • Think globally with your IPJagex fell down at least in part because the court ruled that it not had protected its copyright properly in the US and its terms and conditions were insufficient.  So don’t just protect yourself in your home country – you need to protect yourself in every country in which you do substantial business (UPDATE: Thomas Bidaux suggests every country where you have >10% of your business). 
  • Take legal action as soon as you are able – don’t delayThis was another reason that Jagex failed to obtain the injunction.
  • Just registering copyright and trademarks won’t automatically protect your game – bot manufacturers these days are very careful to try to minimise liability on these fronts (hence for example Impulse’s use of “RS” rather than Runescape).  Talk to your lawyers if you have concerns about attempts to undermine your game.  A little legal advice early can save a lot of time and money down the line.

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Sony brings landmark modchips lawsuit in Australia

Sony is bringing a potentially landmark lawsuit against a PS3 modchip seller over the legality of modchips in Australia. Most recently, Sony secured a temporary injunction against the seller,, banning them from selling any modchips while the lawsuit proceeds. In this guest post, Melchor Raval comments on the lawsuit and what it could mean for modchips Down Under…

Once upon a time, Australian gamers could brag to US and UK gamers that they had the right to modify their consoles using a modification chip (mod chip) [Jas: you can read more on modchips here and here]. At the moment, Australian gamers can basically install these chips into their consoles to circumvent the system’s capabilities of regional coding, digital rights management (DRM), and install an alternative operating system to completely re-purpose the console. However, recent amendments in the Australian Copyright Act 1968 introduced a stricter regime which could potentially ban mod chips (more on this below). Yet despite some recent fines obtained by Nintendo to manufacturers and distributors of the R4 modchip device – no actual case has actually confirmed that the changes ban modchip. In effect, as far all Australian gamers are concerned, the mod chip is still legal because the amendments are yet to be interpreted by a judge.

But this may not last for long since Sony is now bringing a test case against modchip distributor, OzModChips, to the Australian Federal Court in which it argues that the distribution of mod chips are illegal under the Australian law and therefore OzModChips must cease its modchip distribution. Before we get into the legal details, let’s backtrack for a bit.

The PS3 Mod Chip

On August 25, uploaded three Youtube videos online which proved that the first ever claimed working PS3 ‘mod chip’, called PS Jailbreak, actually worked. The mod chip is not actually a ‘chip’ like ye olde PS2 mod chips but is actually a simple USB stick that can simply be plugged into the PS3 USB ports. The device hacks the PS3 console and (for now) only allows the backing up of games into the PS3 hard drive, but the developers claim that it will open up the possibility of running homebrew software on the PS3 as well (such as emulators). The device was initially planned to be sold by the end of September 2010 by OzModChips with the hefty price of $170 Australian dollars.

Fearing that the PS Jailbreak could mean a repeat of the PS2 mod chip and piracy debacle, Sony succeeded on in obtaining a temporary injunction through the Federal Court of Australia on August 27 2010, to block the importation and sale of the device. In order to keep the ban permanent, Sony will have until September 3 2010 to convince the Court of the illegality of the mod chip. In a nutshell, Sony needs to prove to the Court that the device will be solely used to infringe Sony’s copyright works. OzModChips on the other hand argues that the device can be used for legally backing up games and homebrew applications (as they all do).

The Legal Rules

Sony’s and OzModChip’s totally different perspectives are not surprising since similar cases in the past, regardless of jurisdiction, have presented the same arguments. Australia gamers however have had the advantage because of the 2006 High Court decision in Sony v Stevens, which legalised the mod chip on the grounds that Sony’s technological measures did not prevent or inhibit infringement because the infringing activity (such as copying the game using your PC) precluded the use of the mod chip anyway. The mod chip only allowed access to the infringing game, but was not actually the cause of the infringement, which Sony’s technical measures needed to prevent. (See more on that here  – which explains it all in layman terms).

In spite of this short-lived victory for Australian gamers, Australia amended the Copyright Act 1968 in 2006 which obligated Australia to align their copyright rules with the far stricter American DMCA through the Australian-US Free Trade Agreement. The changes are very long and complex, but it can be summarised in this nifty comparative table:

The Arguments

(1) SONY

Though very simplistic, the table illustrates that Australian gamers might not be lucky this time for a number of reasons:

I. Sony can claim that the PSJailbreaker device is a circumvention device that circumvents the technological measures of the PS3 to allow the unauthorised backing up of games, which infringes s.10 (1) of the Act because access to these backed up games are not “in the normal course” of the PS3’s operation. Note the emphasis on the term effective because if reading literally from the actual provision, there is actually no requirement that the TPM needs to be effective in controlling access of work.

II. Sony can also bring a claim that the sale, manufacture and marketing of such devices are illegal because the device has no purpose other than to enable or facilitate the circumvention of the PS3’s TPM. Also note that emphasis is added on the lack of an effective technicality.

III. Any arguments contrary to the above two regarding the mod chips ability to allow the backing up of games can be nullified because of the explicit limitation brought about by s.110AA.

The third argument is perhaps the most disturbing because there is a lack of awareness in part by Australian gamers that backing up of games is NOT actually allowed since S. 110AA ONLY allows an individual to copy a videotape into electronic form for personal and domestic use. In fact, the Attorney-General’s Copyright Department (which can be read here) recently announced that no amendments will be made to the private copying exceptions for computer games!! So tough luck Oz gamers – backing up isn’t actually allowed at all, but could potentially tantamount to an illegal reproduction.


On the other hand, OzModChip could argue for the interoperability exception under s 116AN. This exception basically allows users to circumvent technological measures to install independent programs (i.e. homebrew) to devices without the authorisation of the owner.

The interoperability exception is quite a tricky legal technicality because it has not been tested in Australia. On the other hand, American case law (including Sony v Gamemasters and Sony v Divineo) have ruled out the application of their version of the interoperability exception as a defense for mod chips because the courts literally interpreted that the mod chip “bypassed, removed, deactivated or impaired a technological measure in the console without the authority of the copyright owner”. Moreover, interoperability must also be necessary under the DMCA and this becomes doubtful when console manufacturers have released official interoperable programs which can legally access the console without illegal circumvention (see here).

Under Australian copyright law however, there is a distinct lack of requirement that interoperability must be necessary. As such, OzModChips may argue that the development of independent homebrew applications interoperable with the PS3 is not totally dependent on whether it is actually necessary in the first place. Hence developers can develop independent apps interoperable with the PS3, such as an emulator, which can be useful but otherwise ‘unnecessary’. And if Sony argues that interoperability should only be allowed when it is necessary, well they pretty much proved that the using the PSJailbreak is necessary to create interoperable application since Sony removed the Linux compatibility option.

However, the ability of the dongle to play “infringing” games could weigh more than its non-infringing applications. This is to be decided by the court if they do a proportionality test –that is – whether the proportion of users who will use it for homebrew will actually be significant enough to warrant its legitimacy. Otherwise, if more gamers use it to pirate games then the defense will be useless.

So who will win?

Since this is the first time the amendments will be tested, the case will be decided on how the court interprets the provisions in question. My bet is that Sony will probably win this time because any backing up arguments will be rejected by the court, and it seems that the defendant will solely rely on this argument for the legitimacy of the device. The homebrew argument could also come off too weak since the court could potentially question whether the proportion of users who will use the device for legitimate home brewing might (and will) be outnumbered by eager pirates.

It is certain that the gaming industry have stepped up their battle against the mod chip manufacturers (as witnessed from the recent Playables case in the UK) and Sony has a lot riding in this case because the potential of piracy with their flagship console already spell big problems with their software sales, evident from the lack of developer support for the PSP. This is the one case for the industry and gamers to watch closely.

Melchor Raval is a current PhD Candidate at Monash University of Australia, writing his dissertation about the persistence of modification devices in the new generation of gaming consoles and the legislations that affects the legitimacy of the device. His previous article, which is a comparative analysis of the Australian amended Copyright Act 1968 and the DMCA regarding the mod chip, is pending for publication with a number of academic journals.

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Nintendo v Playables – the latest modchip case considered

It seems that Nintendo is on a mission to gun down modchip sellers at the moment. I posted in May 2010 that Nintendo was suing New York-based modchip seller NXP Games, Inc. The 1709 Blog has just reported that Nintendo has successfully just sued another modchip seller in Holland. And, last week, Nintendo won a UK High Court claim against modchip seller. This post is about the UK decision.

Here’s a quick summary:

Nintendo v Playables, the UK High Court decision on modchips delivered last week, was not a groundbreaking decision. It simply reinforces the fact that previous caselaw has already found that the sale and distribution of modchips breaches UK copyright laws and is therefore illegal. So, this decision did not make modchips illegal for the first time under UK law.  It is still an important decision, however, because it forms part of a continuing move in the US/UK towards outlawing modchips altogether – an approach which is not shared in certain other countries, particularly in Europe (more on that at the end of this post).

So, now read on the clever(ish) legal analysis. Oh, and for more background on modchips you can read my previous post ‘Are Modchips Illegal?’

The story

Nintendo manufactures and sells its handheld Nintendo DS among other consoles. Playables, a UK company, imported and sold devices which when connected to a Nintendo DS could be used to play pirated games (either using inbuilt memory or through inserting memory cards into the device). In other words, Playables sold modchips.

HM Revenue & Customs and Trading Standards seized about 165,000 of these modchips en route to Playables, which led to Nintendo finding out about them and deciding to commence High Court proceedings against Playables and one of its directors. As it turned out, prior to trial Nintendo agreed a partial settlement with Playables (the terms of which are unknown and no doubt secret) but nonetheless sought summary judgment of the case to court in order to obtain legal vindication of its position.

Fundamentally, Nintendo argued that the modchips infringed its copyright in: (i) the source code for the boot up software; (ii) the Nintendo Logo Data File (which assist the DS to run); (iii) the Nintendo ‘Racetrack’ logo. In legal terms, the arguments being run were:

(i) circumvention of ‘Effective Technical Measures’ (essentially, they deliberately circumvented technology put in place by Nintendo to stop copyright infringement); and

(ii) pure copyright infringement.

More on that below.

The ETM argument

This is where we get a bit legal. Nintendo relied upon two provisions in the Copyright Designs and Patents Act 1988 (the “CDPA”), section 296 and section 296 ZD.

Section 296 prohibits anti-circumvention devices that have been applied to computer programs. To establish a breach of this provision, Nintendo had to prove that: 

  1. there was a “technical device” which had been applied to a computer program; and
  2. that the defendants had manufactured it/sold it etc for the sole purpose of the unauthorised removal or circumvention of the technical device.

In addition, for one of these sections Nintendo also have to prove that the defendants actually knew or had reason to believe the technical device would be used to make infringing copies.

Nintendo easily could prove Test (1), since the modchips physically are inserted into the Nintendo DS and can then be used to run pirated games etc.

As to Tests (2) and (3), Playables advanced the same arguments that pretty much all modchip sellers have advanced in these cases:

  • modchips are not just sold for circumvention purposes but can have legitimate uses, e.g. if you wanted to play your own game on the console; and
  • the modchip sellers don’t know that their devices would be used by people to make/use pirate games.

In the UK, these arguments had already been put forward (and failed) in several cases, in particular one called Sony v Ball and separately in R v Gilham (more on that below). Here, again, the judge gave these arguments pretty short shrift. He said “I do not think that the defendants have a realistic prospect of asserting that they did not know of the unlawful uses to which the devices would be put” and that Playbles had “no realistic prospect of success” in arguing the modchips were for legitimate purposes.

The Jurisdiction angle

One interesting/new question which came up during this part of the case was what happens when a modchip seller is exporting modchips outside the UK as well as selling them within the UK. Does just exporting modchips outside the UK fall foul of the CDPA as well?

Mr Justice Floyd said yes, it does. He said that one of the CDPA sections being relied on, s296 ZD, is concerned with dealings in the UK in devices capable of circumvention. Nintendo did not need to prove actual circumvention.

So what? Answer: on this reasoning, if in the future a modchip seller was to import modchips into the UK and then export them out (e.g. to Europe), that would be illegal even if the modchip is not actually sold/used in the UK. It also means that the claimant (in this case, Nintendo) could seek greater financial damages.

The copyright argument

As I said above, as well as an ETM argument, Nintendo also brought a plain old vanilla copyright argument, based on the DS source code, the NLDF and Nintendo’s logo (well, actually, Nintendo’s argument was that Playables should be liable for copyright infringement because its device authorised others to infringe Nintendo’s copyright, most likely because it would be hard to prove that Playables itself had actually infringed Nintendo’s copyright).  These arguments met with more limited success: Nintendo only won on the NLDF authorisation point.

The court’s judgment

We already know that Nintendo/Playables itself had settled but Nintendo wanted a judgment in its favour. So, it went off seeking summary judgment from Mr Justice Floyd, who found in its favour on the ETM argument and partially in its favour on the copyright argument. The Judge also found there was enough evidence to find Mr Chan, the Playables director, jointly liable with Playables.

Also, just to emphasise, the court’s judgment was directed at whether Playables had in fact breaches the relevant sections of the CDPA.  This case did not seek to establish as a general principle that modchips are illegal, as that had already effectively been achieved by a combination of the CDPA provisions and previous caselaw.  Obviously though this case will act as further precedent to be used in any subsequent cases against modchip sellers in the UK.


As I said, this was not a groundbreaking decision, but it does have some interesting aspects:

  • It forms part of the continuing trend in the US/UK towards outlawing modchips altogether, by finding that they have no legitimate purpose other than to facilitate copyright infringement/games piracy. For example, the case follows hot on the recent UK criminal case of R v Gilham, in which a modchip seller was convicted of offences relating to his sale of modchips (you can read my thoughts on that case here).
  • It contrasts with the view on some other countries that in fact modchips can be used for legitimate purposes and that the games companies should not have ‘their own way’ of controlling the consoles in the way they want, rather than what consumers want. For example, you read here about recent modchip decisions in France and Spain which moved in that direction.
  • It shows that the directors and employees of modchip sellers can be personally liable, not just the company. Here, Mr Chan was found financially liable as well as Playables. In Gilham, Mr Gilham himself was prosecuted and convicted. This is must be a serious deterrant factor, but…
  • The fact that the case was taken all the way to judgment shows that the console manufacturers clearly do still regard modchips as a serious concern, so deterrants are needed.
  • HMRC were involved. We don’t know exactly how, but clearly there was (and has been for some time) cooperation between HMRC and the console manufacturers to tackle copyright infringement/piracy of all kinds, including modchips.
  • Why didn’t Nintendo go for criminal prosecution of Mr Chan and/or Playables? We know from Gilham that console manufacturers have done this before against modchip sellers. Instead Nintendo relied on a civil suit. Why? I can speculate, but really it’s a mystery…

So what next?

In the UK, Playables will likely be shut down, Nintendo’s position has been vindicated, now it and the other console manufacturers will need to focus on the next modchip threat.

However, modchips are used all over the world, with the console manfacturers being forced on jurisdictional grounds to fight legal battles under the legal systems of several different countries to outlaw modchips (for example the New York and Holland lawsuits mentioned above). It is by no means clear that the same result achieved here would be achieved in say France, China or Brazil. All of which unfortunately means continued legal expense and uncertainty for the console manufacturers.

Speculation alert: in the meantime, as far as I am aware there has been no or very little consideration of the use of modchips from a consumer law perspective in Europe, certainly in the UK. Perhaps a consumer law argument could help to change the nature of the argument away from pure copyright considerations? Sounds like a tough gig, but you never know. Watch this space…

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Nintendo sues another modchip reseller

GamePolitics reports that Nintendo is suing NXPGame Inc, New York based reseller of Nintendo DS modchips, as well as its owner apparently.  It is seeking $150,000 for infringement of each copyright work and $2 million for infringement of each Nintendo trademark.
We’ve previously discussed the legality of modchips on this blog.  In the UK, the sale of modchips is quite clearly illegal as there is a specific legal prohibition on the use of devices like modchips which are intended to circumvent “technical measures” designed to prevent copyright infringement.  In the USA, the DCMA imposes broadly similar restrictions on the sale of modchips.  Doesn’t sound too hopeful for NXPGame, eh?
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Teen convicted of crashing PlayStation site in banhammer

In March this year we wrote about a Pennsylvania teenager who pleaded guilty to criminal offences over his hacking and crashing of a Playstation web site in 2008, which he did in revenge for being kicked out of a tournament for the PS2 game SOCOM US Navy Seals for using a cheat mod.  
Now, Nukezilla reports that the teenager has been sentenced to a $5,000 fine as well as 250 hours of community service and 12 months probation.  So that’s that then.

It’s worth bearing in mind that in the UK and EU he would have faced similar criminal proceedings.  In the UK for example there are specific criminal penalties under the Computer Misuse Act 1990.  We wrote about Runescape and the Computer Misuse Act some time ago, check it out for more info

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