Aussie mod-chip veto criticised

Australia's competition watchdog has savaged a court ruling that says mod chips circumventing copy protection are illegal

The Australian Competition and Consumer Commission has decried a ruling by the Federal Court that mod chips designed to circumvent copy protection features on gaming consoles are illegal.

Earlier this week Sony won an appeal which saw the Federal Court rule that mod chips breached the anti-circumvention provisions of the Copyright Act 1968. These provisions prohibit devices being sold for the purpose of defeating measures designed to protect copyright.

The ACCC, which had appeared for the defendant Eddy Stevens in both the original court case and the appeal as an amicus curiae (friend of the court), said the ruling meant consumers would suffer a loss of choice. As well as allowing consumers to make back-up copies of games, the mod chips enabled the region coding used by Sony to distribute Playstation games in three mutually exclusive regions to be bypassed.

"The ACCC believes region coding is detrimental to consumers as it severely limits their choice and, in some cases, access to competitively priced goods," said the new ACCC chairman, Graeme Samuel. "The ACCC is disappointed that technology which can overcome these unfair restrictions will not be generally available for consumers' use."

"While the ACCC supports Sony's right to crack down on the sale of pirated copies of Playstation games, this decision now means Australian consumers will be unable to enjoy games legitimately bought overseas, as well as legitimate backup copies."

Samuel also pointed to recent government legislation allowing parallel imports of software products, which allows consumers and distributors to buy direct from any overseas exporter.

"Yesterday's decision may have the unintended consequence of eroding this advance for consumers," he said.

Sony Computer Entertainment managing director Michael Ephraim said the company was "delighted" with the outcome. "We hope that it sends a clear message to other people across the world dealing with pirated material, that we will not accept piracy in any form and will take action against those who unlawfully abuse the intellectual property rights of Sony Computer Entertainment and third party games developers," he said.

Sony also pointed out the Full Court had reaffirmed that there is no right to make a backup copy of a PlayStation game, something that was disputed in the initial hearing.

The decision was hailed as a "welcome result for copyright owners" by Phil Catania, Partner and National Practice Leader IT, at law firm Corrs Chambers Westgarth.

"The issue was whether TPMs only include measures which stop copying, or whether it also includes measures which render copies useless," said Catania. "In the first decision in the case last year, the Judge had held that the console did not contain a TPM, because it didn't stop copies from being made. A mod chip could not be a circumvention device, because it did not defeat a TPM."

"The Full Court disagreed, holding that a measure is a TPM if it reduces infringement in a practical sense. If it is harder to play a pirated copy, then it follows that less pirated copies will be made."