Australia Approves ‘Mod-Chips’ to Defeat PS2 Regional Coding
In what will be a devastating blow to Sony, Australia’s High Court Thurs. sanctioned the use of “mod- chips” to let PlayStation2 consoles there play videogames “regionally-coded” for use in other markets. Consequently, “Region-2” Australian PS2 owners can legally buy and play games released earlier and sold cheaper in markets such as Region-1 U.S.
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The ruling was the first of its kind. Courts in the U.K. and elsewhere have upheld Sony’s practice of releasing PS2 content on a region-by-region basis with coding that prevents hardware sold in specific markets from playing software released earlier in others. Japan and the U.S. usually get the prime picks of new PS2 games, while other regions such as Europe and Australia/New Zealand wait months for the games, which usually sell at higher prices owing to value-added taxes in those nations. As a result, a lively market emerged in “mod-chips” that enable PS2s to play software not yet available in the secondary markets.
In its ruling, Australia’s High Court (the equivalent of the U.S. Supreme Court) differentiated between “regional coding” and other copy protection mechanisms in the Sony hardware. Although mod-chips can be used to play pirated games, the court said regional-coding wasn’t a factor in copy protection, but rather a barrier to free trade.
“There is no copyright reason why the purchaser should not be entitled to copy the CD-ROM and modify the console in such a way as to enjoy his or her lawfully acquired property without inhibition,” the High Court said. “Sony sought to impose restrictions on the ordinary rights of owners, respectively of the CD-ROMs and consoles, beyond those relevant to any copyright infringements… In effect, and apparently intentionally, those restrictions reduce global market competition.”
In its decision, the High Court said mod-chips don’t breach copyright because, although they let users play copied or imported games, they do not permit the copying of games -- which remains illegal even in Australia.
The court’s ruling ended a 4-year dispute between Sony and Australian retailer Eddy Stevens, who got singled out in 2002 for importing, selling and installing the mod- chips. “This is a hell of a victory for the consumer. That’s why we did it,” Stevens told Australian TB and U.K.’s BBC. Sony spokesman in Australia and elsewhere didn’t return comment on the decision. Similarly, Sony hasn’t returned comment on PC programs that enable users to copy their own DVDs to Sony Memory Sticks for playback on its hot-selling PSP. The availability of those programs likely will crimp sales of $30 movies on UMDs for PSP -- as already seems evident in the U.K. (see separate report, this issue).