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Australian Federal Court Overturns Legal Modchip Sales

An anonymous reader writes "Yesterday, the Australian Federal Court overruled the previous ruling on modchips in Australia. I am pretty sure the overruled case is the mainstay for the 'legal' use of modchips in Australia (predominantly Linux on the Xbox). Haven't seen this hit the media yet, with the exception of the Australian Financial Review referring to it in the Free Trade Agreement context. The ruling can be found here. Although not a lawyer, it appears the original judgement was made on the basis that Sony did not provide a copy protection system. Also noted is that there is limited commercial use for the mod other than circumvention. Wonder what will happen to modchips for the Xbox, given that it can be argued that running Linux could easily be seen as commercial."

Reader silne adds "According to the article in The Australian's IT section, it's not illegal to possess or use a mod chip, just illegal to sell them. Looks like another win for Sony. Hopefully the ACCC is going to appeal this one." Bigthecat supplies a link to coverage at news.com.au, as well.

35 of 177 comments (clear)

  1. ACCC might not do anything by darnok · · Score: 5, Insightful

    They've got a new boss, Graeme Samuel, who is widely perceived as more business-friendly. If mod chips are truly going to be banned, this might be an interesting indicator of whether the ACCC is about to become less of a public enforcer of individuals' rights than before.

  2. The judgement was for sony modchips.... by splerdu · · Score: 2, Insightful

    MOD chips on the playstation were only good for circumvention. Sony itself released a linux pack for the PS/2, so running linux is definitely not an argument.

    The PS and PS/2 modchips basically allow pirated game discs to be played, without any other real use. The XBox case might be handled differently.

    1. Re:The judgement was for sony modchips.... by Anonymous Coward · · Score: 2, Insightful

      Which is all good and fine. I agree with stopping pirates and illegally copied games.

      However, I have two reasons why I want modchips to be legal (or at the very least region-locking of PS2's to be gone).

      I currently live and work in Japan. I have been buying lots of japanese PS2 games while here. Next year I will return to Australia.

      1) A lot of these games have not and never will be released in Australia, because the games market is so much smaller than in Japan. The only way around this is to own a japanese PS2. Should I be forced to buy a japanese PS2 (which, by the way, Sony Australia will refuse to service if something should break) just to play these games?

      2) When I return and bring my japanese PS2 with me that I have here now, I will not be able to play australian-released games on it. Should I be forced to buy a second PS2 just so I can now play "local" games?

      I know lots of people who face scenario #1. I admit scenario 2 isn't likely to apply to me as I have never been interested in a game that has been released in Australia...

      Still, the customer SHOULD have the choice.

    2. Re:The judgement was for sony modchips.... by BobSutan · · Score: 2, Insightful

      "MOD chips on the playstation were only good for circumvention."

      In the USA there are many legal uses for circumvention--playing backups is one of them.

      --
      "On a scale from 1 to 10, people are stupid"
    3. Re:The judgement was for sony modchips.... by NanoGator · · Score: 5, Insightful

      "MOD chips on the playstation were only good for circumvention. Sony itself released a linux pack for the PS/2, so running linux is definitely not an argument."

      I'm not a big fan of current modding efforts because they're negative-ruling-bait. However, I must argue with this point. Sony's release of the Linux pack for the PS2 is certainly not the end of that argument. It is limited, you cannot distribute Linux apps to other PS2 owners unless they have the $200 kit as well. Worse, you have limited access to the hardware.

      What's really hurting the MOD development for the PS2 is that there really isn't a whole lot of reason to do it. Play any region DVD? Well the law's not going to side with that. Play MAME? Nope, law's not going to side with that either. Play MP3s or DivX videos? That area's a bit gray, but there's the issue of how those Mp3s or DivX vids are acquired.

      I agree with your first point, but the second one is probably what earned ya the troll rating. Pity the dude with the mod point didn't just respond, its not like you were out to be a jerk. There's a difference between trolling and having an unpopular opinion.

      --
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  3. I have this crazy idea by Anonymous Coward · · Score: 5, Insightful

    ..that i should be allowed to create, buy and sell any tool i want, even if that tool can be used for illegal purposes. If the people buying the tool from me use them for illegal purposes, that's illegal, but THEY are the ones who committed the illegal act.

    Everyone tells me that this is a bizarre, extremist, stupid idea, and would never work.

    Unless the tools being described are weapons designed to kill people. In that case, having a right to make, buy, and sell these things even if they're going to be used for illegal purposes seems unquestionable, and it's extremist and stupid to state otherwise.

    Of course you don't have a right to bear arms in Australia, right? But still I wonder if you'd get help from gun advocacy groups in Australia and told them about the plight of modchippers, and explained to them that modchippers and gun owners have common problems. I doubt it.

    1. Re:I have this crazy idea by Rogerborg · · Score: 3, Insightful

      > Why should we allow tools that have no possible legal use?

      It's illegal to write your own software for PS2?

      Argue that you can't find anybody doing it, but as they can't do it legally, is that really surprising?

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    2. Re:I have this crazy idea by Qrlx · · Score: 2, Interesting

      In America, we draw the line at .50 cal machine guns. Somehow, I dont' quite see a modchip being quite on par with a gun that is typically used to render industrial equipment functionless.

      But then, I'm kind of a Luddite.

    3. Re:I have this crazy idea by Sloppy · · Score: 2, Interesting
      Why should we allow tools that have no possible legal use?
      Because whenever someone says a tool has no legal use, they're always wrong.
      --
      As copyright owner of this comment, I authorize everyone to defeat any technological measure which limits access to it.
  4. This is Disappointing by Joel+Carr · · Score: 5, Interesting

    I find this very disappointing given that third party tying is well and truely illegal here in Australia, and mod chips allow consumers to regain the rights console makers have been trying to take away from them.

    Essentially a mod chip allows a consumer to run whatever they like on the hardware they bought, not only what company X says they can.

    The problem is that company X has total control over what can be run on the hardware without mod chips. This means they can sell a product and then say you can only run a select list of programs on the hardware from companies as dictated by them. This is third party tying, and this is illegal in Australia.

    In short, mod chips return to Australian consumers the rights they're entitled to under Australian law. This rulling removes them again.

    --
    Any man who can drive safely while kissing a pretty girl is simply not giving the kiss the attention it deserves. -- AE
    1. Re:This is Disappointing by bakes · · Score: 2, Interesting

      Sony make available a Linux Kit for the PS2, which allows you to do almost anything with your PS2. It's hard to argue that they're specifically restricting anything execpt illegal copying

      Except for the region coding factor. If I buy LEGAL games from overseas, either by visiting those countries or by mail order, I cannot play them. This reduces consumer choice, and is exactly why the ACCC were interested in this case.

      The ACCC kicked up a fuss about DVD region coding some time back, now pretty much any DVD player you buy in Oz is region free. I bought a DVD player last week, and there was a sticker on the box saying 'this product has been modified to conform to Australian regulations'. It had been de-region-ified.

      So anyway, if I was to buy a console now (I currently don't have one, but I could be a potential customer within 12 months) then the Sony PS2 would definitely be OFF my list.

      --
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  5. their press release is encouraging by Trepidity · · Score: 3, Informative

    Their press release covering this ruling is headlined Consumers Lose in Playstation Decision, which hardly sounds conciliatory.

  6. also at theregister: by spiny · · Score: 4, Informative

    http://www.theregister.co.uk/content/54/32088.html

    some content in this one this time too :)

    --

    Fry: heh, Yakov Smirnoff said it
    Leela: No he didn't.
  7. Ironic by Matrix2110 · · Score: 3, Interesting

    Very ironic that the big companys wish to deny us new open hardware and at the same time ramming DRM into legacy hardware. Ala media player 9 (Plan 9?) I would normally be a lot more concerned, however since Microsoft is set to embrace and extend this new field of DRM, I am not worried.

    Go to Google and try to find a method for saving a Quicktime video stream. It can be done but you have to be persistant. Now try the same thing with Media Player... Google goes nuts showing you freeware up the wazzo to do just this very thing.

    I am not worried.

  8. It was in today's newspaper by bakes · · Score: 2

    I read about the ruling this morning in 'The West Australian' (newspaper).

    Online link here.

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  9. So what? by rasteri · · Score: 4, Informative

    You don't really NEED a modchip these days anyway. Solder a couple of points on the motherboard (MUCH easier than soldering in a modchip) and use the 007/Mechassault/Whatever hack to flash the TSOP. Worked for me, worked for my friends, worked for (probably) hundreds of other people.

  10. Re:like it matters much by halowolf · · Score: 5, Insightful

    Well it won't actually take much for the Australian Police to find them. Some people at a place I used to work ordered XBox mod chips from overseas, and before they were allowed to receive them through customs they had to give their name, residential address and I think drivers license number to ensure that they as recipients were properly identified.

    At the time however it wasn't clear as to why this information was needed, other than the fact that they ordered mod chips of course. At the time they did this mod chips were considered legal.

    I hope the ACCC in Australia does something for the Australian people, as we all know that the primary purpose of the "security" of consoles is to provide for the construction of artificial markets to decrease competition and raise prices for consumers and revenue for the companies that manufacture them.

    The thing that that hacks me off, is that console makers bundle the region encoding along with their security. Region encoding has nothing to do with security and everything to do with creating false markets which is something that should not be tolerated. Its about high time that the manufactures of these devices were forced to abandon region encoding all together so that consumers have the choice of what to purchase and where. The same goes for DVDs.

    I will of course freely admit that most peoples use of mod chips however is for piracy which is not an act that I condone or participate in. I would be more than happy to have a console with strong security and no region locking. Its high time that these companies realise thats whats good for consumers is good for them. Stuffing consumers around will only hurt these companies in the long run.

    Rant over

  11. Re:like it matters much by quinkin · · Score: 2, Insightful
    It's more about catching local stores stocking the modchips, than persecuting end users.

    Q.

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  12. Case opens by Rogerborg · · Score: 2, Interesting

    Two years ago Mr Eddy Stevens sold unauthorised copies of computer games on CD-ROMs for use on Sony PlayStations. He also supplied and installed modifying chips in PlayStation consoles

    Case closed. We really need to find better cause celebres rather than letting rights owners pick the fights.

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  13. Several Issues by fven · · Score: 2, Interesting

    The ruling seems to indicate that not only are modchips illegal, but software solutions that allow playing of ah.. unauthorised discs are also illegal.

    In Australia it is illegal for vendors to 'lock' products with products from third parties.
    This ruling seems to side with the manufacturers without addressing any of their failings. There is possibly wrongdoing on both sides here (ie offering a product for sale that does not comply with these 'third party lock in' laws)

    With respect to the 'could reasonably know that a device would be used for copyright infringement' or 'that commercial viability of non-infringing uses for such device would be minimal' there are a couple of cases in point:
    The playing of legally purchased games from overseas.
    The use of backup copies of legally purchased material.

    One way a number of companies remove the need to allow backup copies is to offer exchange at no or minimal cost of damaged media. I have not seen any examples of game manufacturers offering this service.

  14. Wny doesnt someone make a modchip that... by jonwil · · Score: 2, Interesting

    only allows linux to be used and doesnt allow any pirated games to be played (i.e. it would be pre-flashed with a linux bios image that had no (C) microsoft code in it)

    Also, it could be built to boot bootable cdroms (such as a sutably modified knoppix disk or something), so that you could e.g. modify the installer for a sutable linux distro and make a set of ISOs ready to install that would give you e.g. red hat or mandrake or whatever with sutable mods for xbox and xbox h/w

    Since the digital signature on xbox disks is the "access control" and since this doesnt allow one to play xbox games, pirated or otherwise and since it doesnt circumvent the "access control" as far as I can see (although IANAL and I dont know exactly what the relavent laws say)

    Given that the chip would be flashable, someone would come up with a bootable ISO that will put some other bios (such as "lets you play pirate games" one) on there but since the chip makers arent selling it or even linking to it, they cant get in trouble for it.

  15. The real reason Australia is scared of modchips by Anonymous Coward · · Score: 3, Funny

    The Australian game publishers are terrified of trying to keep up with the frantic schedule of one or two games per year seen in Linux gaming.

  16. FTA = Bend Over by quinkin · · Score: 3, Insightful
    A bit OffTopic, but I have to vent my feelings.

    "Free Trade" - what a misnomer.

    Australia already has 0-5% tariffs on nearly all imports - the real sticking points here are removing PBS (Pharmaceutical Benefits Scheme), removing australian TV content restrictions, full privitisation of Telstra (the now half state owned telecommunications giant), removing distilled liquor duty, relaxing food labelling laws, relaxing quarantine restrictions, and basically anything else that a major American lobby group objects to...

    So basically - we have to remove all of the things that Australians believe in and have spent many decades nurturing - for a marginal at best gain...

    Let us hope negotiations progress...

    Btw, I'm not anti-american, I would feel the same way if any other country tried to dictate australian domestic policy.

    Q.

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    1. Re:FTA = Bend Over by Qrlx · · Score: 2, Insightful

      I love how these capitalists love to push schemes like privatisation of drinking water, even though none of them would ever live in a country with a privatised water suppply.

      Here in America, we've got NAFTA, and it's not much better. Well, it's better than being in Iraq, but I swear, Democracy is flourishing at home, too!

    2. Re:FTA = Bend Over by jquirke · · Score: 2, Interesting

      I couldn't care less about the Australian TV content restrictions. If it means less bloody backyard/renovation shows, than so be it. Let's face it - that's all Australia can afford to put on TV anyway.

  17. Re:Will this ruling really matter? by Rogerborg · · Score: 3, Insightful

    It sets a precedent. Will it still not matter when you can't buy the tools to uncripple a DRM "enhanced" PC and run/write your own software on it?

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  18. I don't get it by 73939133 · · Score: 5, Insightful

    It's bad enough that companies are simultaneously claiming copyright protection under the law while trying to make their content uncopyable even for fair use; companies should have to choose between enjoying copyright protection or employing copy protection. Copyright law loses its meaning and purpose if the content being copyrighted never has a prayer of making it into the public domain.

    But this ruling goes even further: in addition to copyright protection, the legal system is now also being burdened, at taxpayer expense, with prosecuting people who circumvent copy protection. If Microsoft or Sony can't figure out how to make their boxes unmoddable (it's not that hard technically), why should the taxpayer pick up the tab for their incompetence? And, no, it's not just Australia: of course, this nonsense is even more widespread in the US.

  19. i don't get it ... it's mine or is it? by Anonymous Coward · · Score: 2, Interesting

    i don't get it. i bought the damn thing. if i want to i can just trow the damn XBox out the window! i bought it, it's mine! if i want to remove the chip, ram what ever it's up to me! it's MINE!

    it's like buying a calculator and then the law forbids me to use it to calculate how much plutonium i will need to reach critical mass!!! damn!

  20. Re:like it matters much by csteinle · · Score: 4, Insightful

    What really infuriates me is that a lot of the companies that create these false markets (which allow them to charge the highest price a particular area, rather than the global market, can reasonably sustain) are often the same ones that are right now shipping as many jobs as possible "overseas". So they can take advantage of cheaper markets, but we can't.

  21. EFF in Australia = EFA by SpiritedAway · · Score: 2, Informative

    EFF in Australia is actually called the EFA

  22. Game Backups by henele · · Score: 3, Interesting

    If you ring up Microsoft's European Customer Support and ask for a replacement (even at a fee) for a damaged disk of a game they publish, you are told flately 'no' (in three different examples I know of).

    Since then I haven't bought any of their games, and I'd also strongly argue the case for me to backup the ones I do.

  23. Re:like it matters much by sholden · · Score: 3, Insightful

    The ruling doesn't make owning mod chips illegal, it makes selling them illegal.

    Of course in this specific case they guy was selling copied games as well as mod chips. If he would have just sold mod chips and not sold the obviously illegal games things might have turned out different. The circumstances show his intent.

    Of course with the Australian legal system he now gets to pay Sony's costs (and QCs don't come cheap). And of course then there's damages, but that comes later (and of course there's still room for appeal to the High Court - but losing there would further increase costs).

    Oh well, I'll have to stick to PC games and skip on the PS2...

  24. Re:erm... that's for an MSX-box, not psx by stubear · · Score: 2, Interesting

    You're right, it wouldn't work for a PLaystation. On the otherhand, Sony offers a Linux package that comes with a keyboard that works with the Playstation, no modchips necessary. I'm always amazed at the lengths people will go to to protect their ability to violate copyright law and make excuses for why their particular violation is not really illegal.

  25. Re:Modchips that don't allow copied games to run? by Rogerborg · · Score: 2, Interesting

    (Cue alternate history lesson)

    It was the early 1990s. UNIX workstations were DRM protected to only allow us to run the flavour of UNIX that was sold with them. Under purchaser pressure, the workstation/UNIX sellers caved in and allowed us to run any version of commercial UNIX that we wanted. Huzzah!

    Then along came this guy calling himself "Lunis", who claimed that he wanted to write his own kernel! How dumb did he think we were? He just wanted to pirate commercial UNIX kernels. Nobody writes their own kernels from scratch. What a crazy idea!

    (Cut to present day) Get the point? Having a short list of approved software precludes anyone doing what Linus did ever again. And "ever" is a long time.

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  26. Re:It sure is. You need to be licensed. by dissy · · Score: 2, Interesting

    > Simply modding your PS2 and coding for it is illegal in the eyes of Sony,
    > Nintendo, and Microsoft. You need licenses.

    Fortunatly in the US, this doesnt matter for most of those companys.
    Due to first sale laws on the hardware, you can do anything you want with it and any part of it that is not under copyright.

    And even the parts under copyright you can do alot with, you just cant distribute them. So claiming a BIOS is copyrighted is fine, you just cant give out the BIOS code. You can still USE it. You can even change it to your hearts content, you just cant give out the new code, or arguably the changed code. A patch file (a difference between the old and new) is OK.
    Half the code in a diff file is copyrighted by you. The other half is indeed copyright by them, but has always fallen under fair-use laws because the small snippits are only used for context, and can not be used in and of themselfs for any other purpose except finding context in the origonal.
    Of course, you also cant USE this patch file unless you too have a licence to the BIOS, but as long as you bought your PS2 or whatever console, you do.

    That is why companys try adding encryption. The only console that its currently illegal to program for is the xbox, and only under the dmca laws due to encryption for accessing the system.

    Of course breaking encryption to read the game media is illegal, but this is only if you dont own the copyright on the media.
    If you write your own software, and its yours, you own the copyright. You are allowed to encrypt your data as needed by the console to play it, AND decrypt it again if you so choose because you are the copyright owner.

    Sony has no more right to tell you what you can and cant run on your property than Intel can tell you what you use your new p4 for.