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Are Modchips Illegal?
by Jas Purewal on 01/11/10 01:26:00 am   Expert Blogs   Featured Blogs

The following blog post, unless otherwise noted, was written by a member of Gamasutra’s community.
The thoughts and opinions expressed are those of the writer and not Gamasutra or its parent company.

 

 

[This post is reproduced from http://www.gamerlaw.co.uk/.  You can follow Jas or ask his advice on Twitter: www.twitter.com/gamerlaw]
 
This article is about modchips: is their sale/use illegal or not?  We look at three recent cases in England, Spain and France - which show an interesting divergence of European opinion as to the legality of modchips: not every country thinks that modchips are a bad thing.  More below...


What is a modchip anyway? 

Wikipedia has a succinct definition:

"
A modchip (short for modification chip) is a small electronic device used to modify or disable built-in restrictions and limitations of many popular videogame consoles. It introduces various modifications to its host system's function, including the circumvention of region coding, digital rights management, and copy protection (homebrew) software checks for the purpose of running software intended for other markets, copied game media, or unlicensed third-party." 

Modchips exist for other devices (e.g. dvd players) but for today's purposes we're only talking about modchips which are used in games consoles and which are intended to circumvent games copy-protection: in other words, modchips which fool a console into thinking that the player owns an authentic, licenced copy of a game when it fact he/she does not.  An example of such a modchip is the wiikey, which (funnily enough) mods the Wii.


Why are modchips seen as a problem?


Modchips are seen as a problem by the games industry because: (i) they are said to facilitate games piracy by allowing players to play unauthorised/pirated copies of games; and (ii) they enable a player to tamper with the innards of a games console.  The games industry periodically takes action to stamp out modchipping - for example, Microsoft banned a lot of Xbox Live accounts of owners of chipped consoles last year.


Of course, gamers may (and do) take a rather different approach.  Many argue: (i) it's my console and I should be able to do what I want with it, including playing pirated games or modifying my console; (ii) I didn't ask console manufacturers to install arbitrary mechanisms for controlling what I can do with my console; and (iii) modchips can in fact be used for a wide range of reasons, which do not necessarily involve illegal activity.


Still, the purpose of this post is not to debate the merits of these arguments, but simply to summarise what the legal position is regarding modchip in different jurisdictions.  (Caveat:  the following really is just a summary, so it should not be taken as a authoritative analysis of the law of these jurisdictions!)



England


Use and sale/distribution of modchips is illegal in England.

Section 296ZB of the Copyright, Designs and Patents Act 1988 (CDPA) makes it a criminal offence to sell or distribute "any device, product or component which is primarily designed, produce, or adapted for the purpose of enabling or facilitating the circumvention of effective technological measures" (this provision was introduced as part of the EU-wide anti-DRM laws introduced by the EU Copyright Directive of 2001).

So, under English law the sale or distribution or such devices intended to circumvent "effective technological measures" is a criminal offence.  Does this apply to modchips?  Yes, is the answer.  We know this thanks to recent case-law in the English courts. 

In a case called Gilham v the Queen, the Court held that that selling or hiring modchips will be a criminal offence under s296ZB CDPA if it is established that:

(1) The game is or includes copyright works.

(2) The playing of a counterfeit DVD on a game console involves the copying of a copyright work.

(3) Such copying is of "the whole or a substantial part" of a copyright work.

(4) The game consoles include effective technological measures designed to protect those copyright works.

(5) The offender sold or hired the modchip device in the course of a business.

In Gilham v the Queen, the jury found that modchips met of all of these requirements - and so they convicted Gilham.  He appealed, arguing that using a modchip does not lead to copyright infringement because there is no "substantial" copying of the game - all that happens when you play a chipped game is that a fragment of the game is copied to the console's RAM at any point, which is insufficient to establish copyright infringement.

 This gave rise to tricky legal issues as to whether copying lots of little pieces of a copyright work (so-called "little but often" copying) could in some way turn into "substantial" copying.  Tough question...which the Court side-stepped by instead holding that the game drawings which appear on the screen, and the audio recordings which are played, are themselves copyright works which are "substantially" copied in playing the game.

So, selling modchips is illegal under English law.  What about just using a modchip in your console but not selling/distributing them?  You're no better off really, because (following the logic in Gilham) using a modchip in your console would involve copyright infringement - which could have civil (and possibly criminal) legal implication of its own.

Verdict: sale or distribution of modchips in England is a criminal offence.  The use of  modchips in your own console would likely constitute copyright infringement.


Spain

Since Spain is also subject to the EU Copyright Directive (which led to the introduction of the law in England that has made modchips illegal -see above), you may expect to see Spanish law also ruling that modchips are  illegal.  Si?

Apparently...no.  Admittedly I'm by no means a Spanish lawyer, but I understand that the Spanish Penal Code does contain measures intended to prevent the circumvention of "effective technical measures".  However, a Spanish court case in 2009 seems to have gone the opposite direction to the English courts.

The case followed a criminal complaint by Nintendo against Movilquick, a Spanish modchip distributor. The judge decided that flash carts could be used for "both legitimate and illegitimate purposes, but not only illegitimate" purposes.  He held that flash carts could be used for "pirated games" but may also have  "legitimate functions of employment" such as "backing up original games or other various functions such as managing photos, music or performance of [free] software".  On that basis, he dismissed the criminal complaint.

Why is this interesting?  Well, it is not often that one sees the judiciary coming down on the side of gamers.  The judgement was not set out in great detail, so it is not at all clear why the judge decided to do so.  In particular, it is not clear how this decision can be reconciled with the EU Copyright Directive (or with the Spanish law that implements it). It is also not clear whether this is the only case-law on the subject - it may be that there are other Spanish cases elsewhere that go the other way. Still, I imagine it made Spanish gamers happy...

Verdict: using or selling a modchip/flash cart may be legal, but just wait for Nintendo's lawyers to get the appeal going...


France


Ah, La France, home of la loi Hadopi (also known popularly as '3 strikes') and also a subject of the EU Copyright Directive.  Do its judges sympathise with their English or their Spanish colleagues when it comes to modchips?

Answer: Spain, apparently. 

Details so far are sketchy (no sign of the actual judgment yet) but summary as follows: in December 2009, a Paris criminal court ruled that Divineo, a company which makes Nintendo DS flash carts - essentially, a type of modchip - did not break the law (i.e. presumably they do not "circumvent effective technical measures").

The Court's logic seems to have been that flash carts in fact extend the utility of the DS and that the user should therefore be free to use them as he or she wishes - a lot closer to the reasoning of the Spanish than the English court.  But, in the absence of more details being made public (especially the Court's formal judgment), it is not entirely clear on what legal basis the Court made its judgment.

For completeness: Nintendo said it would appeal the decision and pointed out that Divineo has already been banned from selling flash carts by a Hong Kong court and ordered to pay damages to Nintendo.


So, are modchips illegal then?

It is pretty clear from the above that there is a divergences of opinion within the EU as to the legality of modchips.  The legislation is there (i.e. the EU Copyright Directive) to make modchips illegal, but that legislation has been interpreted (or possibly simply ignored) in different ways.

As often happens in the EU when different Member States take different approaches to legal issues, the answer may only come when the EU itself takes the opportunity to clarify the position (whether through a case before the European Court of Justice or through further legislation from the Commission)...but those opportunities are relatively few and far between.  Until then, that uncertainty seems set to continue...


What about modchips in other countries?


For those of you who are interested, here is a quick round-up of developments in the treatment of modchips in other jurisdictions:

  • USA: in principle, use of modchips may fall foul of the Digital Millenium Copyright Act (DCMA), which has been used previously to get at sellers of modchips (example here)
  • In Italy, back in 2005 a court ruled that the purpose of modchips was to 'avoid monopolistic positions and improve the possibilities for use of the PlayStation'. The court said: 'It's a little like Fiat marketing its cars while banning them from being driven by non-European citizens or outside towns.' "

  • In Australia, the Australian High Court ruled in 2005 that modchips for the Playstation 2 were not illegal.  As I understand it the Court's reasoning was that, since the Playstation 2 technology had only ever sought to stop players playing unauthorised games but had not sought to stop them copying those games, a modchip which assisted players to play but not copy unauthorised games was not an attempt to circumvent "technological protection measures" under Australian law.  (As far as I'm aware, that position has not been contradicted in any subsequent case-law).

    (In England, the Court took a rather simpler approach by holding that the very act of playing a game using a modchip constitutes copying infringement - but there may have been good reasons why this
    argument was not adopted in Australia).

Closing thoughts



  • Even without having to get into a detailed legal review of the laws of different jurisdictions, it is clear that some countries have adopted a relatively hardline approach to modchips (e.g. the UK or USA).  In particular, the UK has made it clear that the sale of modchips may be a criminal offence.
  • But, maybe surprisingly, other countries appear to have taken a more neutral/favourable approach to modchips, recognising that modchips are not just about playing pirated games.  With games companies apparently remaining keen to shut down modchip sellers (as with the French action above), it will be interesting to see what 2010 brings...

 

[Obligatory legals: © Jas Purewal 2009. This post sets out the personal opinions of the author - it is not intended to provide legal advice and is not a substitute for it.  If you'd like to discuss this post or any other games or technology law-related issues, you can use the comment thread below, email here or tweet GamerLaw.  Thanks.]



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Comments


Jas Purewal
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@Andre Thomas - Thanks for the interesting link, but that article appears to be one person's personal view of IP laws in general. It does not deal with the actual legal position in any jurisdictions (in fact, it does not refer to modchips at all!) The purpose of my post was not really to debate the reasons for IP laws or laws about modchips, but to have a think about what the law actually says about them.

David Wipperfurth
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I found it interesting how vague the law states that position: "enabling or facilitating the circumvention of effective technological measures" It seems that that could be just about anything; an external hdd case, a box-cutter, a shoe horn, a trash can, etc.



Do you think being so vague was an over-sight, or intended?

E Zachary Knight
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@Jas,



Thanks for the read. This is something I have written about myself in regards to US law. The US has essentially "banned" modchips through the DMCA, but that ban does conflict with the US Supreme Court's ruling on Betamax and video recorders.



I lay out my interpretation of that ruling and how it could apply to modchips in my blog post.



http://www.gamasutra.com/blogs/EphriamKnight/20091116/3544/Of_Bet
amax_and_Mod_Chips.php

Matt Riley
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The sentence that popped out to me: "Well, it is not often that one sees the judiciary coming down on the side of gamers." Was "gamers" just the best term used to describe the mod-chip community, or are you implying the average gamer is against all console security measures?

Mark Kilborn
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What frustrates me is that the console makers could allow the legitimate uses of modchips, thereby removing any argument for the sale and distribution of them. If region locking were removed from my consoles and there were a way for me to run homebrew applications on them right out of the box, I wouldn't have an interest in modding a console.



Most in the industry seem to dismiss arguments for legitimate modchip use as smokescreen, thinking that the people making these arguments are just making excuses and are really pirates. This is not always the case. I know a number of developers who would never dream of pirating a game because their livelihood depends upon game sales, but still they have modchips installed in their consoles to play interesting homebrew software they find on the net and, more common, to play imported games that are unavailable in their region.



I lose patience with the console manufacturers because they seem to expect my sympathy when it comes to piracy (and I am sympathetic), yet they continue with region locks and limited, if any, homebrew support.

Bryson Whiteman
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I think the homebrew argument is weak. I understand the desire to make use of the hardware you paid for but is it just coincidence that circumventing the software protection also enables pirated games to easily be played? In most cases, it's easier to pirate games than to acquire them legitimately.



Sony and Microsoft have taken steps toward the legitimate problems that were mentioned. It costs like $100 for a homebrew license to develop games for Xbox, and the tools are all free. PS3 had the Linux nonsense. I think Xbox regions are determined by the publisher so some games are region free. And I believe the PS3 is completely region free. Nintendo DS is also region free.



I find it hard to believe that people go through the efforts of getting a modchip installed to play exclusively homebrew stuff. I'm no fan of the DMCA because of its vagueness that was mentioned by another commenter. The DMCA is kinda scary to me.



Are modders criminal? I had a modded PS1 back in the day but I find it hard to justify stealing games now that I'm not a broke-ass teenager. Maybe I'm a bit biased, but I don't think the police should've raided my house and thrown me in jail and fined me $1,000,000.



I think it's gonna get more nasty now that we're even losing our rights to have physical copies of the games we pay for. If you paid for software I believe you should still be able to play it even if you don't have an internet connection. Or if you bought a new computer and need to reinstall it, or if your Wii got stolen (since downloads are tied to the specifc unit).

Jas Purewal
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@David Wipperfurth - thanks for your comment and yes, I think the wording was deliberately wide. The real question of course is WHY. My own view is that it was a combination of governments: (i) wanting to future proof their laws (so, yes, a HDD case could theoretically be an 'effective technical measure' if that is the way the technology went; (ii) wanting to protect rights holders' interests to the max; and (iii) maybe just not understanding fully the consequences of such widely drafted legislation. On the other hand, the examples of France and Spain seem to show that, however loosely drafted the laws, some countries just view "effective technical measures" differently to others.



@Ephraim Knight - Great comment, thank you. I've thought a lot about your analogy with Betamax - I'm not yet sure where I come out at, but it does seem a quite attractive argument at first blush. Your blog post = bookmarked!



@ Matt Riley - I said "gamers" just because, for the purpose of my article, I was just focusing on the community which uses modchip with games. I could just as easily have said "modchip community" rather than gamers, I think!



@ Mark Kilborn - I agree with you partly and I think that, as with so many other previously 'intractable' legal/business problems which rights holders have grappled with for years, the simple solution may well prove to be this: give your customers more choice. As for @Bryson's point as to whether the modchip community would ACTUALLY use modchips for anything other than piracy, well, I throw that open to you all. What do you think?

Kevin Reilly
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@Ephraim - SCOTUS determines what the law is, but Congress gets to write it. If the DMCA conflicts with the Betamax decision it is because Congress intended the law to overrule that case to some extent. That's Con Law 101. The holding was also partially predicated on showing a fair use in "time shifting". The applicability of the SCOTUS reasoning in the Betamax holding may not be relevant to the anti-circumvention provisions of the DMCA with respect to modding if it does not constitute a fair use.



@Jas - nice article, I think that the number of legit modders is infintismal compared the number of pirate modders. Whether someone has the legal right or just intent in modding their console is somewhat irrelevant if piracy can continue unabated. Look at the bit torrent numbers on MW2. Do you really think there is an effective counter-measure to piracy than an outright banning of the mods?

E Zachary Knight
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@Kevin,



I think I need to point you to one of the key points in the SCOTUS ruling that I quoted:



"The question is thus whether the Betamax is capable of commercially significant noninfringing uses. In order to resolve that question, we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement. Rather, we need only consider whether, on the basis of the facts as found by the District Court, a significant number of them would be noninfringing."



This point specifically states that one cannot bar a technology from the market if it is capable of significant noninfringing uses. It can be argued quite effectively that playing legal backups, legally purchased imports and homebrew among other things are significant noninfringing uses.



And in case that is not clear enough, from the same ruling:



"Accordingly, the sale of copying equipment, like the sale of other articles of commerce, does not constitute contributory infringement if the product is widely used for legitimate, unobjectionable purposes. Indeed, **it need merely be capable of substantial noninfringing uses**." (emphasis mine.)



As for your comment about Congress writing laws and SCOTUS interpreting laws, yes you are right. But, if the DMCA's ban on circumvention devices were to ever be challenged to the SCOTUS level, SCOTUS could decide that the DMCA ban is contrary to fair use rights of the citizens of the US as outlined in copyright law and thus that portion of the DMCA would be invalidated. Unfortunately, such a case has not reached SCOTUS at this time. But I think that it would only be a matter of time.

Kevin Reilly
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@Ephraim: My point was you cannot look at one SCOTUS ruling prior to the passage of the DMCA and state that the DMCA is de facto invalidated by that prior holding. Each court including SCOTUS has to interpret the laws as written by Congress at the time of the case being litigated in light of past precedent. So while you are correct that substantial non-infringing uses should be considered in a Fair Use defense to vicarious and contributory infringement, the holding is not directly on point with the DMCA's prohibition of marketing anti-circumvention measures under Section 1201(a)(2) and 1201(b).



Fair Use is a defense to copyright infringement, not an individual right (such as freedom of speech). There are plenty of cases discussing the intersection of the DMCA anti-circumvention provisions and fair use. Check out Universal v. Corely (2nd Cir, 2001), MGM v. 321 (ND Cal) and MPAA v. RealDVD (ND Cal) to see how courts are interpreting the DMCA with regards to new technology that permit unauthorized access to copyrighted materials. There are cases where circumvention was deemed not to violate the DMCA (e.g Chamberlin v. Skylink (Fed Cir) and Lexmark v. Static Control Components (6th Cir)) but the courts relied on the fact that the "protected" code was not copyrightable (no infringement = no violation) or that access was not completely controlled (thus no circumvention). However I am not aware of a decision that has found the DMCA is unconstitutional for being contrary to First Amendment or Fair Use principles as the text of 1201 specifically states that the DMCA does not pre-empt any pre-existing rights including fair use.



BTW - your blog post was a good read. I think from a consumer and policy perspective you made a lot of good points, but I don't think the courts will change their view as long as the copyright holders can show that these mod chips allow for rampant piracy.

E Zachary Knight
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@Kevin,



Yes I understand that the DMCA is de facto invalidated by the Betamax Ruling. I am simply saying that it is a good argument against the DMCA and its anti-circumvention clauses.



I am glad that you liked the blog post.


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