Sony loses High Court battle against PS modifier

Stan Beer
Friday, 07 October 2005 11:00

IT Industry - Strategy

Multinational computer games manufacturer Sony has lost a four year court battle to prevent Australian consumers from modifying Playstations to enable them to play cheap games purchased offshore.

A unanimous High Court of Australia ruling enables consumer to legally buy offshore and modify locally cheaper computer games and hardware.

Sydney businessman Eddy Stevens, represented by Gadens Lawyers, runs a business that modifies and repairs Playstations and has been fighting a David and Goliath battle against Sony since it filed suit against him in 2001.

All six judges of the High Court held that widely-used “mod-chips” were legal, with far reaching implications for the manufacturers of computer games (Sony, Nintendo and Microsoft) and consumers.

Mod chips allow gamers to ignore manufacturers’ regional coding systems and purchase cheaper games designed for markets outside of Australia. Computer games purchased overseas are at times cheaper than those available in Australia.

Sony divides the global gaming market into regions so that, for example, games sold in the US or Asia could not be played on Sony Playstation consoles sold in Australia. The mod-chip rendered Sony’s regional coding ineffective

The High Court also held that playing a game on a consumer’s machine does not constitute an illegal copy. 

At the Federal Court level, the Australian Competition and Consumer Commission stepped in and argued that regional coding was detrimental to consumer choice.

The High Court appeal turned on two issues. The first issue is whether the “mod-chip” circumvents a technological protection measure and therefore breaches Section 116A of the Copyright Act. The court favoured Stevens’ argument: that the act of making a pirated copy of a game is illegal; however, playing a game by using a mod-chip is not. The court quashed Sony’s argument that the mod-chip is a practical way to prevent copyright infringement.

The second issue is whether the act of playing a computer game – which necessitates copying data on the Random Access Memory (RAM) of the computer or game console – is a breach of copyright in circumstances where the manufacturer does not specifically grant a licence to copy the data on RAM. The court held that by merely playing a Playstation game, the consumer is not making an illegal copy of the game in the Playstation module.

Senior associate Nathan Mattock, who was also on the Gadens Lawyers team advising Stevens, said “The complexity of the issues in this case provided a challenge for all involved in the proceedings. The court has had to interpret copyright law within the ever-changing technical environment in which we live. Fortunately for the consumer, the court has prevented a multinational corporation from further eroding consumer rights.”