Tribunal of rehearing of Bolzano – Order Dec. 31, 03

Hacking a Playstation Sony by adding a “modchip” is not an intellectual proprierty infringment. The customer who paid for the purchase, has all and any right to “handle” his private proprierty

Tribunal of rehearing of Bolzano

Order Dec. 31, 03

The Tribunal of Bolzano, in camera, composed by the Magistrates:

Dott. Edoardo Mori, President,

Dott. Claudio Gottardi, Judge

Dott. Tullio Joppi, Judge

Issued the following

ORDER

Seen the petition filed by “… Salvatore”, investigated for the criminal offence mentioned in sec.171 ter Law, Par. 22, 41 n. 633, remarks:

During an investigation of Guardia di Finanza, based upon the theory that the commercialization of modified playstations is a criminal offence, the Public Prosecutor of Bolzano issued a search and seizure warrant against those companies that purchased modified consoles from another company previously investigated by the Public Prosecutor of Bassano del Grappa.

On Dec. 13, 03, the enforcing of the warrant issued against the company “… Salvatore” based in Rimini, resulted in seizing a playstation together with some chips necessaries to hack it.

“… Salvatore” appealed the warrant to the Tribunal of rehearing.

Having read the case proceedings, the Court observes:

This case involves the general problem of the playstations circuit hacking, a problem that has been internationally raised up by Sony, an important, albeit not the only, manufacturer of this “dedicated computer”, able to read CD or analogous media containing videogames produced by the same playstations manufacturers or by their licensees.

The lucrative business for the manufacturers is the sell of the games, for a price of about €30,00, not the console whose cost is about € 200,00, and often sold under the regular price to attract purchasing the games.

For these reasons, the manufacturers embed in the playstations some limitations making the consoles able to read only the media they have developed. Further more, for nothing else but business reasons, the world has been divided in three zones (America, Asia, Europe and Australia), and the playstations distributed in America (to be used with NTSC TV) don’t allow playing the media distributed in Europe for PAL and SECAM TV. While the playstations distributed in Europe don’t allow playing the American-market released media.

Further more, the media are recorded in a way to prevent a copy of the original media might run on the playstation, that only plays the original discs (thus infringing those Italian provisions granting every software purchaser the right of making a back up copy should the original be damaged).

Facing these limitations, technicians have created a pretty simple chip, whose cost is only a few Euros, that restores all the console functions thus making the hardware able to read original media coming from other markets, read copies of those media, play both independent third-parties produced or console purchaser realized videogames, work together with other devices, such as a computer.

This is not the place to deal with the technical problems related to both the console and the chip. It is enough to say that “mod-chips” or “converter-chips” are components putted inside the consoles, instructing the sub-bus controller device to accept both the regional and the original CD codes.

Ironically, is Sony the first who had supported strongly the thesis that a playstation is a true computer and not just a game console, when asked by the EU to pay for custom duties imposed over the consoles (while computers aren’t subjected to this tax). Sony filed a claim to the EU Court of Justice that, in the appeal decision, stated that, in effect, a playstation is a computer (decision issued on Sept. 2003).

To put in short: we are facing manufacturers who sell not-fully-working hardware to be only used the way they like.

The problem has been internationally dealt with, with various results, depending obviously, by the single involved legislations.

In Australia, after a favourable decision, sustained directly by the Antitrust Authority accusing Sony to deprive Australians from the globalization advantages (Kabushiki Kaisha Sony Computer Entertainment & Ors v. Eddy Stevens, N929 of 2002), on Jul. 23, 03 the Supreme Court ruled that it is a copyright infringement; a similar decision has been issued in England (with the enforcement of more rigid rules than the European). In Germany, until present times, the mod-chips are legal, as in Italy, following the (scarce) jurisprudence (Tribunal of Vicenza, Jun. 27, 03 n. 53/03).

It must be said that the problem is partially overruled since Sony is read to promote a new system called PSPTM, with a new kind of optical disk that make mod-chips obsolete.

Similar to the one examined here is the problem, dealt with only for the sake of thoroughness, arising by the circumstance that playstations, just with a few hacks and some accessory, may be transformed into a computer. The Microsoft X-Box (cost about € 200,00) has the full Pentium 3-based computer but is artificially constrained into a console. An Xbox-mod-chip quickly became available on the market, allowing the use of Linux (the free operating system). But this powerful hardware is artificially limited, cannot play US purchased videogames and, while is capable of reading DVD, one must pay €30,00 more to access that feature. But if the device, with a few hacks, may run Linux, why in the world shouldn’t a user be free of use it in all the ways he likes? This is as if FIAT would sell a car forbidding the use to non-EU citizens and on out-of-town roads.

In our legislation the only provision regulating the issue is sect. 171 ter Law Apr.22, 1933 n. 633 that, enforcing a EU directive, so state at the letter f): (is punished whoever) manufactures, imports, distributes, sells, rents, give someone other in every way, advertise for selling or renting, or possess for commercial purposes, tools, products or components, or provide services having the main finality or the commercial use of circumventing the effective technological measures as mentioned in sec. 102 quater, or be mainly designed, adapted or manufactured with the end of making possible or easier to circumvent the above mentioned measures.

By its side, sec. 102 quater says:

1 – Owners of copyright, connected rights, and of the right mentioned in sect. 102 bis Para 3, can adopt, over the works or protected materials, effective technological protection measures, including all the technologies, devices or components whose function is, during their normal way of working, to block or limit non copyright owner authorised actions.

2 – The technological protection measures are considered effective when the use of the protected work or material is controlled by the copyright owners through an access device, or a protection process, like encryption, scrambling or any other protected work transformation, or is limited through a copy-control mechanism able to reach the scope of protection.

Two things are, so, clear:

1 – the protection granted by law is only in respect of the right of the author and only indirectly, over the media (sect. 102 q.)

2 – tools or components mainly devoted to the circumvention of the measures mentioned in Para 1 (sect. 171 ter lett. f bis) are forbidden.

But a third point, not covered by the right of author law, is equally important: to which extent can a machine seller forbid the modifications allowing a use different than the ones he likes.

It must be, now, verified whether the mod-chip might be considered as mainly aimed at circumventing the right of author protection measures applied to videogames.

Regarding this point it can be easily affirmed that mod-chip primary function is to avoid monopolistic stakes and better use the playstation, and not allowing the use of illegal copies since the chip make readable:

– Imported discs (the European distributor might dislike that, but there are no right of author infringements. By another side, the differences introduced by distributors might infringe the free competition regulation.); one must think that not all the US games are distributed with the European region code, so there is an interest in finding them straight to the source and that the cost is about 20% less the European.

– Third parties (different than the company who manufactured the playstation) discs (these might sometimes and maybe infringe some software patent or the license granted, but this is a problem of no interest for a legitimate purchaser)

– The (admitted by the Italian law) software back up copy

– Media containing other kind of contents (different than the ones originally designed) but surely legal

– And exploiting as a computer all the playstation features

Let’s see, at last, whether the machine manufacturer might forbid a use different than the one he likes.

Under our civil code regulation, the answer is surely negative: the proprietor of a thing can use it in the most broad and exclusive way.

Knowing all that, the manufacturers tried to circumvent the stake inserting into the package a paper claiming that should some seal be broken, the guarantee would be lost (and nothing can impose to the owner of the thing to give up the guarantee!) and that it is forbidden reverse engineer the console software being that copyrighted or only licensed for use.

It is clear that under our legal system these conditions totally lacks of any value; whoever enter a shop and purchases a box with a software or a console inside, purchases without limits or conditions because he doesn’t know what has been written (in English, maybe) into the box. States correctly the Civil Code that General Agreement Terms can be used against to the other contractor if the latter knew it before entering into the agreement; how could the purchaser know it if the seller didn’t make it read and sign before give away the object and get the money?

So all the attempt to bind the purchaser with after-purchase statements are simply ridiculous; sentences “who opens the envelop acknowledge the conditions” “who wants to use the software must click here and acknowledge the conditions” don’t exist for the software user. By the way, he rarely knows these conditions since the software is usually installed by a technicians more skilled than the average end-user, and the opening of the envelop, the breaching of the seals, the OK given to the screen-displayed conditions, are related to entities different than the purchaser or end-user.

The conclusion is that the seize is not legal because the invoked law is not enforceable to the situation.

For these reasons

Agreeing with the petition ut supra filed, declares the illegitimacy of the seize dated Dec. 12, 03 against “… Salvatore” and order that the seized things be given back to the proprietor.

Bolzano, Dec. 31, 03