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Mod Chippers Ordered to Pay $9 Million in Fines

GameDaily is reporting that that ESA is announcing a major victory against game software piracy in California. A judge has handed down over $9 Million in fines to Divineo Inc., some employees, and international subsidiaries. From the article: "The defendants had apparently violated the DMCA by trafficking mod chips and the HDLoader software application that enables users to copy whole video games to a console's hard drive ... Mod chips then can be used to allow a console to play illegally obtained/pirated games. Both the mod chips and HDLoader application therefore circumvent the copyright protection technology built into video game consoles and video game software and are in direct violation of the DMCA."

22 of 94 comments (clear)

  1. Reasonable doubt? by Temuar+Skylari · · Score: 5, Insightful

    From TFA: "Once the entire video game file is on the console's hard drive it probably isn't too difficult for a hacker to transfer it to his PC and then illegally distribute it on the web." PROBABLY? I'm no cracker, so I have no idea how easy or difficult this is, but COME ON. I seriously hope nobody got fined for theoretical damages caused by distributing a game online when the only evidence was that they had copied it to their console's HD.

    --
    USE colorful confetti ON heavily-armed clown
    1. Re:Reasonable doubt? by the+eric+conspiracy · · Score: 2, Informative

      So the defendants declare bankruptcy and the plaintiffs get what then?

      If the company is liquidated they 1) get the company out out of business and 2) some part of the companies' assets. If the company stays in business they get paid off at some percentage depending on the restructuring.

      To be honest 9 mil isn't that much to a large company. The main thing is getting these mods off the market.

    2. Re:Reasonable doubt? by westlake · · Score: 3, Informative
      Reasonable doubt?

      The Geek never quite seems to grasp the basic distinctions between civil and criminal law.

      Civil actions are all about the balance of probabilites, what is more likely than not. There is no burden of proof beyond a reasonable doubt.

      Damages under the DMCA are assessed according to a statutory formula:

      "At any time before final judgment is entered, a complaining party may elect to recover an award of statutory damages for each violation of [17 U.S.C. 1201] in the sum of not less than $200 or more than $2,500 per act of circumvention, device, product, component, offer, or performance of service, as the court considers just." Hefty award to Sony in action against seller of PlayStation 2 "mod chips"

      "The amount of damages was calculated by awarding $800 per mod chip sold before June 12, 2004, and the full amount of $2,500 per mod chip sold after June 12, 2004. On that date, Filipiak had signed a stipulated injunction in which he agreed to discontinue sales of the chips and related software. The court concluded that the sales made after Filipiak signed the agreement constituted a willful violation of the DMCA, thus justifying a higher amount of statutory damages."

  2. I have a dream... by dolson · · Score: 5, Insightful

    I dream of a day when I won't have to get off my couch to put the legally-purchased games I own into my game console, stream video, pictures, and music from my Linux PC, check the weather, etc. all without the use of these law-breaking modchips. I guess the Wii has a lot of that covered, and probably the PS3 and 360, I don't know. But for me, I really am THAT lazy, that I don't wanna switch the discs. :) That's a benefit of using a modchip even to those who don't pirate software.

    1. Re:I have a dream... by Some_Llama · · Score: 4, Insightful

      "That's a benefit of using a modchip even to those who don't pirate software."

      Or have kids who regularly play on a console swapping out discs 3 or 4 times a day and manage to sratch them to the point of unreadability in a matter of weeks.

    2. Re:I have a dream... by dgatwood · · Score: 5, Interesting

      It also makes it easier to run Linux. But the biggest reason that these companies are so strongly against modchips is because it allows software developers to write games for their hardware without paying a royalty to the console manufacturer. Nothing to do with piracy at all, really....

      Next stop, 9th circuit, where I suspect this will be overturned swiftly as anti-consumer.

      --

      Check out my sci-fi/humor trilogy at PatriotsBooks.

    3. Re:I have a dream... by static0verdrive · · Score: 2, Interesting

      Yep. Don't forget that you get MUCH faster load times too!

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      77 77 77 2e 6d 65 6c 76 69 6e 73 2e 63 6f 6d
    4. Re:I have a dream... by cplusplus · · Score: 3, Insightful

      That, and ultra fast load times. A 7200 RPM hard drive is a LOT faster than a DVD drive. So, by modding, you end up with a console that requires no disk switching (and thus no risk of scratched media) and loads game data about 10x as fast. It was a win-win-win for my XBox :)

      --
      "False hope is why we'll never run out of natural resources!" - Lewis Black
    5. Re:I have a dream... by dgatwood · · Score: 3, Insightful

      There must be a million sources. The primary purpose for requiring special encryption and stuff on games has always been to force companies to pay a licensing fee to the console manufacturer. It's well documented. Heck, just read Wikipedia or read about any of the many reverse engineering lawsuits related to Nintendo and other companies over the years.

      Technology to crack DVDs is explicitly forbidden under the DMCA, but publishing unencrypted DVDs is quite possible (and done regularly). As seen in the Australian courts (and I think it will hold up in U.S. court if it ever gets high enough), the technologies used in video games are the exact opposite. Instead of protecting the content, they protect the devices against using unprotected content. This is a fundamentally different action by console makers, and one that cannot be justifiably protected by law. Clearly, modding games to not check to see if the game is a legit copy is a DMCA violation. Modding hardware to make it allow you to use unprotected content (which may or may not be pirated) is completely different.

      --

      Check out my sci-fi/humor trilogy at PatriotsBooks.

    6. Re:I have a dream... by grazzy · · Score: 2, Informative

      On top of my head: skinhacks, wallhacks, zoomhack.

  3. We no longer own the things we buy. by rolfwind · · Score: 4, Insightful

    These firms are being punished in the same way a lockpicking tool company is being punished in that the tools they sell can be used for evil.

    However, modding has not started with computers, people have always modded. They modded cars, their houses, their radios, their tools, and anything else they have bought. And all of these mods have potentially illegal uses.

    Imagine if Honda struck back against Aftermarket makers, using the DMCA, and telling people that only "Honda certified" parts are allowed in the vehicles honda bought.

    I can't help but think that electronics companies are getting a free ride from the government here.

  4. Take a Hint by Anonymous Coward · · Score: 2, Insightful

    Although I can see their point of not wanting piracy, don't they notice what people are actually doing? Aren't they making their consoles do what they want them too? I have to admit, if I saw my console, one I manufactured, being modded with face plates that read off disk space and allow games to be moved to the drive, etc, wouldn't it be smarter to build these in myself and charge more for the device? Obviously you should put in safeguards, but learn from what is going on around you and adapt your product to your customer. Isn't this a lesson in Business 101?

  5. Get Rid of Region Codes by gtmaneki · · Score: 3, Informative

    If they'd get rid of region codes on games, a lot of incentive to modify consoles would go away. I modded my PlayStation so I could play some fun games that never made it here, like Persona 2: Innocent Sin, Macross VFX 2, and Gunnm: Martian Memory.

    Nintendo has it right. The GBA and DS are region-free.

  6. I'm surprised... by Gadzinka · · Score: 4, Informative

    I'm surprised that no one picked up the fact that it is Japanese company suing French company in US court.

    They won. SFW? How are they going to enforce this ruling in France? From the coverage of this ruling on Ars Technica I know, that the company is still offering those modchips on their web page. And they will. The only thing they can't do now is to visit US. And maybe Iraq or Afghanistan. All of the international treaties about enforcig court rulings abroad have one basic assumption written into them: no party to such treaty shall enforce a court ruling for something that's perfectly legal in the country of residence of defendant party.

    Nothing to see here, move along.

    Robert

    --
    Bastard Operator From 193.219.28.162
  7. Default Judgment? by calbanese · · Score: 2, Informative

    ...damages against corporate defendant Divineo, Inc., and Canadian resident Frederic Legault.
    ...damages against corporate defendants Divineo U.K. and Divineo SARL, and French resident Max Louarn.


    It sounds like the suit wasn't defended. Plus, ESA won't see a dime unless Divineo corporate assets are in the US (which I would doubt). Legault, Lourn, and Divineo UK are not subject to personal jurisdiction in the US, and any judgment against them most likely won't be enforceble in their home countries. I would guess Legault and Lourn didn't appear in the US to defend the suit. If the above is true, this case has absolutely no precedential value, despite what the ESA claims. Plus its a N.D.Ca decision, so even if it was a fully litigated case, this "precedent" is only be binding in that judicial district.

  8. Re:informative? by sqlrob · · Score: 3, Interesting

    Yes. He's using it as a media center. Doesn't have any games for it at all.

  9. Re:informative? by jeaton · · Score: 2, Informative
    Do you actually KNOW anyone who has a modded xbox who DOESN'T use it for pirated games?


    Yes. Me.

    I installed a modchip in my XBox specifically so that I could run XBMC. I have used it precisely once to play an XBox game which I ripped from a game I purchased to see how it performed. Since then, I have used it exclusively to stream music to my stereo, as the UI is better than any of the other devices I had tried.

    I only decided to hack my XBox after I realized I hadn't played games on it in several months. All of my gaming now is on my DS.
  10. Export till there's nothing left to export. by Anonymous Coward · · Score: 3, Insightful

    First I thought the americans were exporting the concept of freedom, but I soon came to realize they're actually giving their own away.

  11. Re:informative? by startled · · Score: 2, Informative

    Seconded: I have a modded XBox that has never had a pirated game copied to or played on it. It's a great media box.

  12. Re:authoritative ignorance by 91degrees · · Score: 2, Insightful

    The right people are making judgements. The wrong people are making laws. It's a pretty clear DMCA violation whether you agree with the law or not.

  13. Re:informative? by gamlidek · · Score: 2, Informative

    More like speculative. Do you actually KNOW anyone who has a modded xbox who DOESN'T use it for pirated games? Regardless of whether modding HAS to be used for pirating, and regardless of whether pirating is "bad" or whatever, modded xbox systems are for playing pirated software. That's it. If you're going to pick a hole in this argument, this is the wrong one to choose.

    Yes, I know someone. *I* have a modded xbox that I use to play the games that I have purchased so they have a faster load time, you insensitive clod. I also don't like getting up to change the game out, not having to worry about scratching the media, and other benefits of not relying on the physical disc to play my game. In addition, I have all of my CD music ripped to MP3 on the thing and use it as a media center -- CD music that I bought. Your comment is extremely thought provoking, nontheless. Not.

    /gam/

    --
    "In theory, theory and practice are the same; in practice, they are not."
  14. Clueless Judges and Layers. by plasmacutter · · Score: 2, Insightful

    Until we pressure our government into requiring justices presiding over an issue to have at least a bachelor's degree in the theory behind the issue we will not see this kind of nuance considered at all.

    At this point even the lawyers involved can't fully grasp what's going on enough to understand the subtle but important difference you've just outlined (unless theyre from the EFF, then they just don't know how to play the legal game correctly).

    The fact that we have such important issues to consumer rights and personal freedom judged and debated by complete morons is proof positive that "god" cannot be perfectly compassionate and just.

    --
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