Modchips now legal in the EU (as long as they’re not naughty)

We now have some authoritative clarification about the legal status of modchips in the EU for the first time.  As longstanding readers of this blog will know, I’ve been writing about modchips for some time.  Here’s a quick recap of the latest position.

What are modchips?

Essentially, a modchip is a technology which permits you to circumvent restrictions which a device manufacturer builds into a device to limit your potential usage of the device.  These limitations are enforced by technology commonly called ‘technological protection measures’.  For example, a modchip might permit you to install software or to play games on a device which otherwise you wouldn’t be able to due to the technological protection measures installed by the device manufacturer on the device. Continue reading Modchips now legal in the EU (as long as they’re not naughty)

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…

Follow us at or subscribe to our weekly email newsletter here

Games Law History: the Tetris saga

Legal battles have been (and still are) integral to the development of the modern video games industry.  So, I thought that I’d write a periodic series of posts looking at major legal battles in the industry, kicking off with the Tetris saga between Nintendo and Atari, which started around this time in summer 1989. 

A quick summary of Tetris:

This is Tetris (specifically the Gameboy version, chosen because it was the first Tetris game I ever played).  If you do not recognise it immediately, then you can read more here (while putting in your fingers in your ears to block out my loud tutting at you).
The facts
I’d love to give you the full and torturous facts of the long-running Tetris saga, but Atari HQ have already written it up here.  The (legally) interesting fact that emerges is that the battle over the Tetris IP was not an intellectual property issue at all – this was a fight over contracts and contractual interpretation.  I’ll try to summarise it briefly below (with the proviso that the facts are incredibly complex, so if anyone has any corrections/insights into all this, let me know):
  • In June 1985, Alexey Pazhitnov created Tetris on an Electronica 60 while at the Moscow Academy of Science’s Computer Center.  It was soon after ported to the IBM PC and then to the Apple II and Commodore 64.
  • During the mid 80s, the game found its way to the West, where a UK developer tried to acquire the rights to Tetris and (even though he was unsuccessful) he ‘sold’ the rights on to Mirrorsoft in the UK and Spectrum Holobyte in the USA (both companies were controlled by the infamous Robert Maxwell).  The game was released in the West to rave reviews.
  • In 1988, Mirrorsoft sub-licenced Bullet Proof Software to make Tetris games in Japan, while Spectrum sub-licenced Atari with the same rights for Japan and North America.  Cue infighting between the two Maxwell companies (which reportedly Maxwell himself had to be involved in to sort things out).
  • Atari’s subsidiary Tengen released arcade and NES versions of Tetris (known as “TETЯIS: The Soviet Mind Game”).  Bullet Proof also released a Tetris game for the Famicom (the Japanese version/name for the NES).  Nintendo became very interested in releasing Tetris for the forthcoming Gameboy and in controlling Tetris on the NES, too.
  • There was by this stage a big licensing mess over who controlled which rights in the Tetris game across different platforms.  In early 1989, all the interested parties started negotiations with each other and with the Russian entity (known as Electronorgtechinca, or Elorg) which now asserted it owned all the Tetris rights.  Various offers were put forward to control the Tetris IP.
  • Nintendo cut the Gordian knot by reportedly making a massive offer to Elorg for all the rights in Tetris (as well as Elorg’s support in the inevitable future lawsuits).  Elorg accepted.
  • In March 1989, Nintendo then served a cease and desist letter on Tengen to force it to stop selling its versions of Tetris on the NES.  Tengen responded in kind.
  • Tengen, Atari and its parent (the Maxwell empire) didn’t take this lying down.  They began lobbying for control of the IP and, at the same time, Tengen applied to register its copyright of the Tetris IP.  
  • April 1989: Tengen sued Nintendo of America (NOA), and NOA countersued, over the issue of ownership of the Tetris IP.
  • June 1989: the Tengen v NOA court case began in the USA.  The issue essentially was the proper interpretation of one of the original contracts signed by Elorg which licenced out some of the Tetris IP rights.  
  • The US court decided that, since Mirrorsoft nor Spectrum never had held rights in the Tetris IP (see above on that one), they did not have any Tetris rights to grant to Atari/Tengen.  The court therefore found in NOA’s favour and granted an injunction requiring Tengen to halt sales of its Tetris games.
  • July 1989: Nintendo released Tetris for the NES and (soon after) for the Gameboy.  The Gameboy version alone sold over 33 million units.  In financial terms, Nintendo had comprehensively won the battle for Tetris.
  • The legal issues dragged on for some time, focusing in particular on Atari’s release of a Tetris arcade machine.  Other game companies also came on to the scene from time to time (such as Sega’s release of a Tetris game for the MegaDrive) but over time the link between Ninteno and Tetris became well-estabished.
  • A quick footnote: in 1996 Pazhitnov, who famously had made virtually no money from the exploitation of Tetris so far, put together The Tetris Company LLC to control the Tetris IP going forward.  It still operates today (most recently, it forced Google to remove Tetris clones from the Android market).
Was this a once-off, never to be repeated kind of battle?
The Tetris battle came at a formative time in the modern video games industry and helped to shape the fortunes of Atari, Nintendo and other games giants.  It was also largely a product of the confused way in which legal matters were sometimes handled in the games industry at that point. Since then, the games industry has of course become a lot smarter at handling control of games IP from both a contractual and IP perspective. 
But, that doesn’t mean that the legal issues raised in the Tetris saga have been put to rest.  Contractual disputes are endemic in all industries, including the games industry.  In fact, since Tetris, there have been huge numbers of contractual disputes over games and they will keep on arising in the future, since all contracts for particularly valuable products become particularly susceptible to abuse.  
Need an example?  Here you go: Jason West and Vince Zampella v Activision.  This is an ongoing US legal battle for the control of the Modern Warfare IP and, in legal terms, it is a contractual battle just like the Tengen/Nintendo lawsuit.  Clearly, there are factual differences between the two lawsuits, but maybe not as much as you might think: imagine if West and Zampella had released their own competing version of Modern Warfare after they left Activision, meaning that a judge would have to decide whether the IP resided with West/Zampella or Activision (just as the judge had to do between Tengen and Nintendo).
More generally, bear in mind also that the games market is still fragmented over multiple platforms and there is therefore a real potential for different companies to release very similar games over different (or even the same) platform in the future – in fact, we can already see this happening in the mobile and social games sectors of the games market.
So, with that in mind…
 Lessons learned from the Tetris saga:
  • PROPER LICENCING IS ESSENTIAL.  The problems arose largely because several people realised that Tetris was hot stuff at the same time and tried separately in different ways to get the rights, which resulted in differing agreements saying different things.  Cue legal uncertainty -> lawsuits.
  • What should have happened: the first person on the scene or the highest bidder (as appropriate) should have secured a comprehensive and exclusive licencing agreement, covering all territories and all platforms using a combination of specific and general language, stating expressly what the licencee can and cannot do, setting out clearly the operative provisions (royalty payments etc), a dispute resolution mechanism and – crucially a series of warranties, representations and indemnities to give the licencee comfort that he has an exclusive licence and can sue both the licencor and the third party if any other licences are handed out without his approval.
  • If you do find that an infringing licence has been granted, or that a third party is straightforwardly knocking off your IP without a licence, then – as Nintendo did here – you will need to take legal action promptly to protect your IP/contractual rights.
  • Leaving the legal battle to one side, make sure you win the financial battle (selling more units of your game than the other guy does with his) as well as the PR battle (making sure everyone knows the game is yours, not his).
Image credits:
– Pic 1:
– Pic 2: Loot Ninja
– Pic 3: WikiMedia
Follow us at or subscribe to our weekly email newsletter here

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?
Follow us at or subscribe to our weekly email newsletter here

Nintendo ‘wins’ Australian modchip lawsuit, but are modchips actually illegal Down Under?

GamePolitics reports that the Australian Federal Court “has ordered RSJ IT Solutions, operators of the website GadgetGear, to stop selling R4 mod chips for the Nintendo DS and to pay Nintendo $520,000 AU in damages“.
You might fairly assume from that headline that modchips are illegal in Australia.  Not so.  When we previously discussed the legality of modchips previously at Gamer/Law, we saw that in the last-reported Australia case on modchips, the Australian High Court ruled that modchips for the Playstation 2 were not illegal.  As I understood it, the Court’s reasoning was that, since the Playstation 2 technology had only ever sought to stop players playing unauthorised games but had not sought to stop them copying those games, a modchip which assisted players to play but not copy unauthorised games was not an attempt to circumvent “technological protection measures” under Australian law. 
Does this Nintendo case overrule that law?  Apparently not.  According to Australia’s ITNews, the Nintendo case was actually settled out of court, meaning that all the Court was doing in the order which GamePolitics referred to was setting out what RJS IT Solutions had agreed to pay to Nintendo in the settlement.  It would not therefore mean the court has changed Australian law.  If that’s right, then it seems to me that modchips are presumably still legal in Australia (although, of course, Nintendo may well have had powerful arguments in the litigation that the law should actually be changed – modchips are illegal in the UK and USA after all).  Glad to hear from anyone with greater Australian legal experience who knows different…
Follow us at!