Full Federal Court Rules that PlayStation 'Mod-Chipping' Infringes Copyright Law

by Sue Gilchrist and Sarah Strasser

In a recent decision, the Full Federal Court has overturned a first instance ruling, holding that 'mod-chipping' PlayStation consoles infringes copyright law.

On 30 July 2003, the Full Federal Court (French, Lindgren and Finkelstein JJ) allowed Sony's appeal in what has become known as the Sony PlayStation 'mod chipping' case: Kabushiki Kaisha Sony Computer Entertainment v Stevens. This case is one of the first to interpret the 'anti-circumvention' provisions of the Digital Agenda Act 2000 (Cth), which was intended to satisfy Australia's obligations under the WIPO Copyright Treaty. These are the same obligations that led to the anti-circumvention provisions of the Digital Millennium Copyright Act 1998 in the United States.

Sony manufactures PlayStation games, which can be played on ordinary television sets when connected to a PlayStation console. The games themselves are sold in CD format.

The Sony PlayStation system uses a combination of hardware (a chip installed in each console) and software (an access code track on each CD) designed to prevent the use of unauthorised copies of games. Unauthorised copies of the game CDs do not contain the access code, causing the Sony chip to prevent the copy from working. This system also enforces by technological means regional coding of the consoles and gaming software.

This case involved a local Sydney retailer of PlayStation consoles and games, who sold and installed modifying chips (often referred to as 'mod chips') for the consoles. The modified players allowed customers to play PlayStation games manufactured for other regions or to play unauthorised copies of PlayStation games, which Stevens also sold.

Stevens was sued by Sony for trade mark infringement, misleading or deceptive conduct under the Fair Trading Act 1987 (NSW) and liability under section 116A of the Copyright Act 1968 (Cth). Liability under section 116A of the Copyright Act was said to arise because Stevens' supply and installation of the mod chips constituted selling or offering to sell a 'circumvention device' capable of circumventing 'technological protection measures' comprised by the Boot Rom chip and the access codes.

At first instance, Sackville J held that the protection measures (the chip and the access codes) did not constitute a 'technological protection measure' as referred to in section 116A(1) of the Copyright Act, and thus that Stevens' mod chips were not infringing circumvention devices. Justice Sackville reasoned that Sony's chip and access code was not designed to prevent or inhibit post-access infringement of copyright, and devices that merely deterred copyright infringement did not constitute 'technological protection measures'. A more detailed discussion of the lower court decision may be found in an earlier article posted on this website.

The Full Federal Court has overturned this aspect of the decision, holding that Sony's hardware/software combination was a 'technological protection measure' because it inhibited infringement by making it impossible to use the unauthorised copies.

The effect of this decision is unlikely to be limited to PlayStation technology, but may extend to other media systems organised on a regional coding basis, such as DVD technology. Until now, resellers who have modified DVD players to accept DVDs manufactured for any of the eight international regions have not been caught by copyright law. However, on the basis of this decision, these resellers may be the next targets of copyright owners.

The Australian Competition and Consumer Commission (ACCC) has already expressed their disapproval of the decision, noting in a media release that 'consumers will suffer a loss of choice and pay more for their games'. The ACCC also asserted that mod-chipping allows consumers to play both legally imported and legitimate backup copies of games, and that recent advances in easing the restrictions on parallel imports of computer software in Australia may be eroded as a result of this decision.

For more information please contact:
Sue Gilchrist, 02 9225 5221 or sue.gilchrist@freehills.com
Sarah Strasser, 02 9225 5070 or sarah.strasser@freehills.com


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