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More on Microsoft vs. Lik Sang
Levendis47 writes "CNET's News.com is running an article on Microsoft's legal manuevers which have successfully shut down the Lik Sang ecomm store where they've been selling various game system mod chips including the OpenXBox Mod Chip. This leads me to two questions (and I'll admit my ignorance, faux or not, in order to get discussion on this topic): 1) When a customer purchases an XBox (or any game system for that matter) are you intrinsically "signing" an end-user agreement in the purchase that makes modding the device illegal? 2) Could a non-profit org setup an effort to have mod chips produced and "distributed" at the cost of production w/o legal repurcussions? (i.e. would not making a profit on XBox's hardware mods protect you from their wrath?) 3) I understand the whole DRM aspect of mod'ing for playing copied games, BUT, what about legit gray-hacks like the Mandrake Linux XBox project and such? It would seem to me that in the long haul, Microsoft would support such efforts because they could sell more devices (and potentially more software if they licensed an opensource validation library)... "
Another proof, if any more was needed, that US laws don't apply to US citizens only...
I wonder how much of a precendent that can make for the Kazaa case, among others...
Karma cannot be described by words alone.
They dont directly mod the Xbox.
They say you need a modded Xbox machine to use it and they are using this clause against possible DMCA issue :
Everything done on this project is for the sole purpose of writing interoperable software under Sect. 1201 (f) Reverse Engineering exception of the DMCA.
So they are perfectly legal imho...
Never learn by your mistakes, if you do you may never dare to try again
Seems to me hardware vendors don't have a leg to stand on concerning aftermarket modifications to their hardware. People have been moding cars for years with aftermarket parts.
Dangit, if I buy the hardware and want to modify it, I payed for it--it's mine--why shouldn't I be able to? Void the warranty, yes. But don't tell me I'm doing something legally wrong.
Selling the hardware is normally a loss-leader with the idea being to get you to buy loads of high profit margin games, which even out the overall deal in their favour.
As soon as you only buy the hardware (because with a mod-chip it makes a cheap general purpose computer) then the finances get all screwed.
They don't want to sell devices, they want to sell games...
I'm still undecided as to whether the Xbox is a honeypot for MS to see how easy people find it to crack the hardware, in preperation for whatever is going to replace it. I'd like to think it isn't, but then for some reason XP refuses to return any results if I search my entire system for "*.java" in XP, and I'm a Java Developer...
Invoicing, Time Tracking, Reporting
The fact of the matter is that if under current law those companies are the rightsholders, it is up to them to decide whether or not to undertake some alternate distribution method. Just because under some economic analysis such grey activities may help them sell more units does not make those activities any more legal or morally acceptable.
If you honestly a) hate RIAA and b) think that Napster et al increased music sales, then you would NOT have used napster, right?
It seems to me that this whole situation isn't as clear-cut as it may first appear...for starters, there only seems to be once source to confirm that it was Microsoft who ordered Lik Sang closed down (which admittedly was Microsoft itself, but the Australian branch, which from prior experience I know shouldn't be trusted :0).
:0)
Also, why are Lik-Sang still collecting e-mail addresses for people who want to be told when they are back online? Why not just shut down the domain and save on hosting bills? I know most of you are going to say that it's a Microsoft ploy to get a list of addresses of mod chippers, but that's a little farfetched even by MS standards.
The much more likely scenario is that MS doesn't want Lik-Sang to close down altogether (betcha they sell a whole pile more PS2 chips than they do X-Box ones), they just want them to stop selling X-Box mod chips...in which case, the site will be back up in a few weeks, when all the legal problems are sorted and Lik-Sang have "smelt the glove" of Microsoft
===
You know that guy who stole your girlfriend away from you in the summer of '95? He's going to die.
If it is your property you should be able to do whatever you want with it.
If as a condition of sale you agree to certain things, then you must conform to them, you are free to buy or not buy. But I should clearly and explicitly tell you BEFORE you purchase the product.
People should be free to have almost any contract they wish, I don't think the government should restrict my freedom by saying I can't enter into a fair and equitable agreement.
Undisclosed onerous conditions should not be be valid.
> The chips typically allow a game machine to play legally and illegally copied discs, run unauthorized software, and play game discs intended for other geographic regions.
I buy an Xbox (not that I would), it is therefore mine. I chip it, which presumably voids the warranty, but this is still legal because I own it.
If I use it to play pirated games then I am breaking the law because the vendor has copyright on the game, not because I have done anything illegal with the console.
If I purchased the console then it is up to me to decide what software I run on it. The OEM has no right to tell me what is and is not authorised software.
If I use it to play games from other regions then this should be fine, because the vendor of the game is applying a restraint on trade.
This article seems, like many others, to be offering a report that has little to do with logic or the law but has everything to do with partiality.
The Mod chips Lik Sang were selling probably contained partial copies of the BIOS code from the X-box. Since the BIOS code is usually copyrighted this is a copyright violation. While I don't necessarily agree with what MS is doing Lik Sang should have been a little more cautious. They gave MS an easy legal device to threaten them with, copyright violations, when it would've been more difficult to assault them with DMCA in Hong Kong.
STOP ROCK VIDEO
1) When a customer purchases an XBox (or any game system for that matter) are you intrinsically "signing" an end-user agreement in the purchase that makes modding the device illegal?
I haven't seen the packaging, but EULAs aren't that common on hardware purchased. In fact, the traditional business model is that you own the hardware you have purchased, although you do not own the rights to the design. I think MS would object if you were modding boxes and reselling them, however. (We can debate whether they have a legitimate gripe all day....)
2) Could a non-profit org setup an effort to have mod chips produced and "distributed" at the cost of production w/o legal repurcussions? (i.e. would not making a profit on XBox's hardware mods protect you from their wrath?)
I doubt it. First, this isn't about profit, it's about ownership of the design. Microsoft's beef with Lik is that they are infringing on MS proprietary assets. (There's a lot more going on, of course, being that they're MS.) Even a non-profit group is not allowed to ignore intellectual property laws, so there's no protection inherent in being non-profit.
Second, remember that "non-profit" doesn't necessarily mean "makes no money." Many non-profit companies thrive & make a ton of bucks (Underwriters Labs, for ex), but they do not distribute dividends to shareholders. "Profit" is reinvested in the company. (Business gurus, correct any inaccuracies here.) As such, NP companies aren't that much different. They're still making money and paying salaries.
3) I understand the whole DRM aspect of mod'ing for playing copied games, BUT, what about legit gray-hacks like the Mandrake Linux XBox project and such?
I'm not prepared to address this one right now. (I'm at work, and I could easily spend a day trying to analyze that situation.)
Short version is that MS wants to prevent distribution of a chip they believe infringes on their intellectual property. They aren't really upset with the people making the mods...yet....
Ad luna, Alicia! Ad luna!
The answers to the questions are IMHO:
1. No, you don't sign an agreement when you buy an XBox. Even if such an agreement was included, it is questionable if this holds any legal value.
2. Profit is not truly an issue in this conflict.
3. There are a few reasons why a MOD chip (and/or its sale) can be illegal:
- The MOD chip contains copyrighted code from the original.
- The MOD chip qualifies as a circumvention device under the DMCA or similar non-US law.
These are usually the reasons a MOD chip is pulled off the market by a court order.
Microsoft won't allow anyone to mod their xbox because then anyone could write software for it. If this were to happen, than M$ wouldn't get any money from game publishers, etc for allowing said publishers to distribute games for xbox. They might allow someone to port linux or other OSs to the xbox, but only if that someone were willing to pay the same fees as game publishers (or perhaps even higher fees), but I doubt it. Even then M$ would probably force the ported OS to use DRM, so it would only run the software they chose (ie, whose developers payed them).
"I love the smell of burning Karma in the morning." Codito Ergo Sum.
It would seem to me that in the long haul, Microsoft would support such efforts because they could sell more devices (and potentially more software if they licensed an opensource validation library)... "
As far as I know about these things, the hardware is sold at cost or with a loss, and the manufacturers want to get profit out of the games.
Modding it would not increase their profit, instead, as you are running software where M$ (or Nintendo or Sony) they are not paid for.
On the other hand, Sony does support Linux on their PS/2 and develops for it. I guess that they think (rightfully) that if you buy a PS/2, you will most likely buy games for it too. Having Linux (and network on it) might just be the extra push the customer needs.
Genius doesn't work on an assembly line basis. You can't simply say, "Today I will be brilliant."
1) When a customer purchases an XBox (or any game system for that matter) are you intrinsically "signing" an end-user agreement in the purchase that makes modding the device illegal
Well, if you aren't, then the GPL isn't binding either, since you aren't intrinsically "signing" anything when you use GPL'd code. Why is it that the EULA is wrong, but the GPL, BSD license etc are OK? After all, in the Unix community (or the traditional Unix community, at any rate) programmers and users were largely indistinguishable, so using source code is analogous to using a consumer application.
Be careful what you wish for: you might get it.
I guess this business is just so young, maybe 50 years of serious computer/software business so far, that these failures are just result of immaturity. In my opinion there is nothing so different in this industry of ours and it should just follow the same rules as with everything else - with only minor changes.
This statement makes no sense. Why would MS support Linux - their sworn enemy? Why would they make it easy for people to buy their hardware and run Linux on it?
Even if MS didn't care about Linux, just look at the facts. The Xbox is basically a PC. However, it's sold at a huge loss. The sales of games make up for this loss. However, if everyone buys the Xbox at a loss, and then doesn't buy any games, but installs Linux on it, and uses it as a PC, MS loses a shitload of money. Without the Xbox, these same people wanting a PC would have to buy one from Dell, or something, which comes with Windows XP and other MS software, so MS has made money on software, without losing any money on hardware.
The only reason MS entered the game console market is to make money. They need the games in order to make money. Without them, they lose, and the Xbox will be as dead as the Nintendo PowerGlove.
Yes, you _can_ buy an Xbox, and run Linux on it with a modchip, but why would you want to? Why would you want to use MS hardware, which is a stipped down, shitty PC, and run Linux on it, when you can get a mini form-factor (XPC) bare-bones system for under $150, add a processor and drive, and be up and running on a better system without having to look at an MS logo everyday? Sure, I understand the "because I can", argument, and yeah, it's cool to make Linux run on something that wasn't mean to explicitly support it, but really, it's not like it's going to become a true platform.
That having been said, I am in no way supporting MS' extension of US laws to foreign companies. That does in fact suck.
There is no sig, there is only Zuul.
Good point, but really it doesn't matter. You can sue me because you don't like the shirt I'm wearing, or I can sue you because I don't like your pants. It doesn't matter if there are any laws involved, if you have enough money, you can force me to stop wearing that shirt, and maybe even pay you damages for the "trauma" of seeing me wear that shirt. I really wish it didn't work that way, and there was a time when people actually worked their problems out WITHOUT calling in a lawyer, but everybody these days is greedy, and they want to sue and get $millions in damages.
"Da ist ein Technölüst in mein Unterpanten!"
A man has been arrested to taking a sledge hammer to an Xbox after Microsoft said, "modification and disassembly of the XBox hardware is against the EULA"
thank God the internet isn't a human right.
Regarding point 3 (that Microsoft would encourage development of systems such as Mandrake for the XBox, etc.), I don't think this would be that case.
At the moment, Microsoft aren't trying to make money (and they're clearly not doing so anyway). Rather they're trying to wrest control of the market from Sony (and, to a lesser extent, Nitendo and other console-makers). Basically they're trying the gain a monopoly in the market (ala PCs).
Once they have this control, _then_ they can begin to make money. They're sitting on enough cash to run as a loss-leader if they want, lose money at the outset, and then increase prices once people are tied in.
The development of alternative systems for the XBox may increase the purchase of the consoles short-term, but long-term it opens up the device to others, destroying the whole idea of monopolizing (i.e. they can't increase the price of games development on the system, of all of the software houses can just roll out a version of the game for Mandrake on the XBox to exactly the same end-users).
I think Microsoft will be no more keen to encourage 3rd party O/S development on the XBox than they are to encourage it in the PC market (and they're in a much better position to control it in the case of the XBox, as they control the hardware directly).
--
Beauty is in the eye of the beholder... Oh, no. It's just an eyelash.
1) When a customer purchases an XBox (or any game system for that matter) are you intrinsically "signing" an end-user agreement in the purchase that makes modding the device illegal?
Not particularly, no. Of course MS is under no obligation to support you, or your box if it breaks. Also don't necessarilly expect it to work with the Live service. In other words, you're free to break it, just don't dump on MS when it breaks or you can't use it with some new game, or their online service, they are well within their rights to exclude you if they are able.
2) Could a non-profit org setup an effort to have mod chips produced and "distributed" at the cost of production w/o legal repurcussions? (i.e. would not making a profit on XBox's hardware mods protect you from their wrath?)
Ahh, now here's where you get to the quasi legality. It's the production for profit of mod-chips that has dubious legal value. Ever wonder why you can't just walk into a store and buy a cable descrambler? You might be able to avoid them - but you have to show up in court, and pay the legal fees when they sue you.
3) I understand the whole DRM aspect of mod'ing for playing copied games, BUT, what about legit gray-hacks like the Mandrake Linux XBox project and such?
Microsoft is concerned about a larger picture. Of having the X-Box be an end unit in a network of units. They want to make sure that the network is somewhat secure. By supporting something like Linux on the X-Box, they help to compromise their plans.
Plain vanilla copyright allows you to make modifications to software/hardware you've purchased. For example, you can purchase Windows NT Workstation and hex edit the bits that cripple Workstation so that it acts more like Server. You may not however redistribute it.
Microsoft hates the idea because they want to sell Server, which is just a recompile (with a few other tools) for much much more. They claim that you are bound to the End User License Agreement when you open the shrink-wrap package you forfeit this and many other rights. Of course, they don't get your signature, and most people never have any idea of what this license says, and some would say it's plain illegal to force customers to waive so many rights just to use software, so it's kind of up in the air.
I imagine this same EULA makes mod chips illegal. EULAs have not been sufficiently validated in court (cases seem to go both ways for a number of reasons), so you're rolling the dice by challenging it.
However, IANAL.
Greetz DJB, JS
No, you're absolutely right. The real problem is that Microsoft is using copyright law to make sure no one reverse engineers their hardware. To me, that's just an abuse of copyright. It really has nothing to do with protected the BIOS that they worked so hard on. It's a way of closing up their hardware, and having the law to back it up. I don't like that.
I'm firmly of the opinion that the DRM features are present in the XBox as a practice run.
They can hone their skills on known hardware.
Thus being cracked and modded is a successful operation for them. They even get practice on how to oil the wheels of litigation.
All this with not much reputation to lose, after all it's *only* a games console.
Once they've got it sorted out with their own hardware design they will be in a position to know how to issue "DRM Compiant" certificates for motherboards, for a fee. Then we'll be paying an MS tax on hardware without anyone arguing about pesky OS's. Their patent on DRM OS's may mean that there'll be another license fee to pay should *your* OS want to use the DRM facilities built into *your* motherboard.
There are places where the networks are not touching,and there are places where they are-Boeing's Lori Gunter
Amazingly enough in the business world, foreign laws are often applied to US businesses. Wow - it's called reciprocity. Amazing.
I think MS is right is using the copyright laws to keep people from altering there hardware. YOU, as an individual can MAKE YOUR OWN Mod chip, BUT going out and buying one, even if it is not for profit is wrong, Its like the black box for cable to unscrable all the channels, there is really no legal use for this technology so it should not be permitted to be sold, The same goes with Mod Chips, there is said "grey area" like the linux project, But if one wishes to do the linux project one must fist make there own mod, I don't think telling people how to make there own mod should be illegal since it is just sharing of information, But making it for some one is/should be illegal. Thats my views on the matter, Most likly I am in the manority, since I also think downloading MP3s with P2P programs is illegal
So if you can't do X, all you have left is a "box" - what's the point of that?
btw, I thought we haven't given in to the whole "hardware license" thing just yet, and maybe, just maybe, we can still buy something and do whatever with it, without the company telling us what we can and cannot do with something we supposedly own (and owning is something I like to do after I give away money)
sic transit gloria mundi
Did it occur to you that maybe M$ used Chinese law in Hong Kong ? Despite the rantings of the many US law does not apply outside the US but local law applies everywhere. Most international companies use local law teams to use local law to get the same effect. If they tried to use US law in China they would get laughed at, as they would in most of Europe.
If a company has assets in the US then they can be taken to court in the US but if they do not then there is nothing a US court can do, they do not even have an address to write to. M$ frequently tries to give the impression that they are able to apply there US values elsewhere but it does not work. Look at some of the European copyright cases, they cannot get their licenses to hold up in Europe. They prosecute under other laws, like fruad etc. and claim it as a victory against the sea borne bandits but it is just an ordinary case under ordinary European law.
I do not know any more about this case than I have read but I have not read anything that suggests that anything strange happened. China is having a crack down on things like this and would have been happy to use their own legal system to support M$.
I love stacking my barbecues in the shed at the end of summer - you can't beat a bit of grill on grill action.
The Saturn was the first "sold at a loss." Saturn + Dreamcast at loss = Sega almost bankrupt.
The Gamecube was admitted to be sold at a loss (admitted by Nintendo at launch) but it was small. Estimates were that it was sold at a $5-$15 loss, compared to the $200 or so on the Xbox. And that was only at launch, they got costs down real quick and were profitable before and after the price cut.
The "all consoles" are sold at a loss is a strange rumor. They have always been sold "at cost," retailers make ZERO markup on the consoles, or at least that was the case in the 80s. We used to get our games through a wholesaler through a family friend in retail (wholesale to mom-and-pop stores, not Toys R Us level stores), we'd save about $8 a game, but couldn't get ANY savings on consoles. I think we saved sales tax, but I don't remember if we had to pay it through their store.
Alex
Well I don't own an X-Box and don't plan to do it. Anyway, I understand why people want Linux on XBox. The problem has tow sides:
1. It's a challenge. And Linux community is a world of challengers. The challenge may be making some noses to all-mighty M$. But the mainstream is probably following the old true challenge of getting one more piece of hardware and putting it to test. The versality and universality of Linux was made of these "Will Linux run on Sparc, PPC, Palmtop, S/390...? Even Sony's PlayStation couldn't run from this mood. And let's remember that some people referred to XBox + Linux in the way - "Sony PS-2 was first now it's time for XBox". And they probably are not hunting games, like some lamers speak here. Their objective is more the traditional "hack the thing".
2. XBox goes much cheaper than the traditional computer. Some have already noted this... And if you wanna use it as a cheap server, why not?
So these are probably tow vectors that move the crowd. What will happen if M$ cuts the trend. Well it will just loose customers, nothing else. Because if they are not for games then XBox will be nothing for them. And they may loose a large piece of the market. I don't think that Linux hackers can repeat Lego Mindstorms phenomena but there are parallels that force me to remind this story. A few years ago Lego launched is small and cute robot, planning to sell some 10000 units. However, the thing was not so popular among chidren as among hackers (I even have one). At first they didn't like this and tried to charge with all this copyright boolaboo. However when they saw sales jumping over 100000 (10x the expectations), they even started to make publicity to some of these guys.
Are you sure of that? The US runs a huge trade deficit each year that is typically paid for by Europeans and Japanese buying US stocks and bonds. I haven't checked the figures, but I would not be at all suprised to find that the percentage of US corps owned by the Europeans is larger than the percent of Euro corps owned by the US. It is probably even larger if you consider direct investment by Europeans in the US (e.g. the BMW factory in S. Carolina) versus US direct investment in Europe.
Same likely holds for the US versus Japan. The US got itself into quite a tizzy a few years ago after Sony bought one of the big entertainment conglamerates and some other Japanese corp bought Rockefeller Center in NYC.
That trade deficit does a lot to keep the worst excesses of the US in check. If we get too nasty, we would be unable to pay for all of the foreign goods we import. Of course it works both ways. Without the US trade deficit, European unemployment would be horrific instead of merely intolerable.
FreeSpeech.org
Can you imagine purchasing a car and not being allowed to install a turbo, or better exhaust...or modifying it to run on fryer oil?
Check out full explanation here
I believe the Magnuson-Moss Warranty act allows for the purchase of accessories like mod chips:
" Tie-In Sales Provisions:
Generally, tie-in sales provisions are not allowed. Such a provision would require a purchaser of the warranted product to buy an item or service from a particular company to use with the warranted product in order to be eligible to receive a remedy under the warranty. The following are examples of prohibited tie-in sales provisions.
In order to keep your new Plenum Brand Vacuum Cleaner warranty in effect, you must use genuine Plenum Brand Filter Bags. Failure to have scheduled maintenance performed, at your expense, by the Great American Maintenance Company, Inc., voids this warranty.
While you cannot use a tie-in sales provision, your warranty need not cover use of replacement parts, repairs, or maintenance that is inappropriate for your product. The following is an example of a permissible provision that excludes coverage of such things.
While necessary maintenance or repairs on your AudioMundo Stereo System can be performed by any company, we recommend that you use only authorized AudioMundo dealers. Improper or incorrectly performed maintenance or repair voids this warranty."
It is my understanding of this act that no accessories manufacturer is required to get permission from the original manufacturer before producing the add-in parts.
Manguson-Moss also allows for "unintended use"...that means you can buy a hammer and use it as a paper weight if you like (as long as using it as a paper weight does not result in the destruction of the hammer). So Microsoft can not prohibit you from running other software on your Xbox.
How did Microsoft pull this off? MS must have better attorneys.
-ted
So, following on that idea, when M$ releases the X-box-2 (or whatever clever name their ad guys come up with) comes out, they'll let me trade in for the new model, right? Or if I accidentally, say, bash it with a sledgehammer, would they sue me? It's "their hardware", or so they imply by not letting us mod it.
I dunno, I think they are crossing a lot of lines here that they shouldn't. I feel that once I buy something outright, I should be able to do whatever the heck I want with it. Tell bill gates that he can't remodel his house, or replace parts in his car and see how he feels.
today is spelling optional day.