Posted by Netmask on 12/23/97 11:28

THE High Court of Australia has unanimously ruled that mod-chips are legal,
but the implications of the case for game manufacturers are not clear.

The mod chips circumvent technology designed to stop Sony PlayStation
consoles from playing illegally copied game discs.
The mod chips also allow gamers to ignore manufacturers' regional coding
systems and purchase games and DVDs designed for markets outside of
Australia, which are often cheaper than those from local suppliers.
All six High Court judges held that widely-used mod-chips were legal.
While the decision is likely to please gaming enthusiasts - settling a
long-running dispute over the legality of the chips under Australia's
current copyright laws - their victory is likely to be short-lived.
The federal Government has agreed to amend Australia's copyright laws to
outlaw mod chips as part of its trade agreement with the US.
The courts have been testing the legality of the chips since to 2001 when
Sony Computer Entertainment Australia (SCEA) filed a suit against mod chip
supplier Eddy Stevens in the Federal Court.
Sony asked the court to include the chips among devices that are outlawed
under the Copyright Act.
However, the Australian Competition and Consumer Commission (ACCC)
intervened in the case and argued that region-coding was detrimental to
consumer choice. It said that mod chips created artificial trade barriers
between Australian and overseas games and DVD markets.
Federal Court Justice Ronald Sackville ruled in favour of Mr Stevens but
Sony's claim was eventually upheld on appeal to the full bench of the
Federal Court in July 2003.
Mr Stevens appealed to the High Court to overturn the decision in February
this year.
The High Court quashed Sony's argument that the mod-chip was a practical way
to prevent copyright infringement.
However, under the terms of the FTA, Australia has until January 2007 to
give copyright owners stronger mechanisms to take action against individuals
who circumvent "technological prevention measures" under theCopyright Act.
The High Court also tackled a second issue: whether the act of playing a
computer game - which necessitates copying data on the RAM of the computer
or game console - was a breach of copyright in circumstances where the
manufacturer does not specifically grant a licence to copy the data on RAM.
The court ruled that consumer was not making an illegal copy of the game by
playing it.

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