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What's Mine Is … Theirs?

Does Sony have the right to disable a hacked console, and would that be cheaper than taking legal action?

You've bought your PS3. You rush home and load her up. You hide the receipt from your partner. You read the instructions and Code of Conduct and see that Sony can suspend you in certain circumstances. Or perhaps not. Who studies the small print when their shiny new hardware is glinting at them?

If you're gaming through the PSN and breach the Code of Conduct by being abusive, threatening or if a fellow gamer makes a complaint about you Sony can suspend your account for an unspecified timeframe. Anecdotal evidence from gamers' forums suggests that such freezes can be for even minor indiscretions from the use of mild insults or curse words to apparently irritating another user by "getting all the weapons first". Infuriating yes, but these are breaches of the Code and you are forewarned of the penalties so this could be fair enough. But it is not the end of the story.

Until very recently the architecture of the PS3 meant that only branded and authorised games were playable on these consoles and effectively the system was locked against pirated games (and the revenue stream for Sony is protected and effectively guaranteed). The security drew the attention of hackers who in 2010 released a USB dongle called PSjailbreak containing software which enabled users to play homemade and pirated games. The challenge continued and it seems that every few days lately security is again battered and breached.

Fail0verflow has recently broken the PS3's security by cracking its master key, and although only the method not the key itself was published by the hackers, the use of this key means that pirated games and software could be installed on the console. The intention, Fail0verflow says, was to develop the hack so as to allow the use of homebrew games on the PS3 rather than to enable the use of games which infringe Sony's copyright. Regardless of the intention, the outcome is clear. Primary copyright infringement has occurred under anti-circumvention provisions and the method has already been applied by another hacker who claims to have created the first custom firmware for PS3 and accredits Fail0verflow for the groundwork in providing the key.

With the PSP also the target of similar hacking it is perhaps indicative of the shape of things to come and the challenges Sony and other console manufacturers now face in protecting their intellectual property rights.

Sony has always reserved the right to suspend, whether temporarily or permanently, an online gaming account when the user is in breach of the Code. They have also been known to update, add or remove functionality through the network. So, although Fail0verflow claims that "there is no recovery from this" because a fix itself would need to be "signed off" by the key, we will wait to whether Sony is able somehow to devise and implement a solution to reset the master key across the board, on an individual basis or at all.

In the meantime Sony have sought injunctive relief and damages in the United States District Court, San Francisco Division, based on alleged violations by the hackers of the Computer Fraud and Abuse Act, copyright, the Computer Data Access and Fraud Act, misappropriation, trespass and breach of contract. Even after the issue of jurisdiction is resolved, the hackers seem reasonably confident that this quest will be fruitless for Sony. But alleged intention is irrelevant and the damage has been done.

However, one cannot help but wonder whether, following on from the latest hacks, we will see a swing towards Sony disabling or modifying a user's console rather than their online account as a punitive measure for copyright infringement and use of unauthorised games, despite that fact that this does not appear to be part of their terms and conditions or feature in the manuals.

On the one hand this seems draconian and at odds with the very concept of physical property ownership: if you spend hundreds of pounds on a piece of hardware you do expect to have control over it and be able to do what you like with it. You might be able to reconcile yourself to not be able to game online for breaching the Code but you'd think you could still play against the computer in your lounge as you always used to. This point is eloquently expressed by Pytey, a member of the Fail0verflow group of hackers "I haven't stolen anything ... it's my own hardware, I can run whatever I like on it". This isn't a universally held view by hackers, some of whom fear legal action against them.

Sony has currently flexed its muscles and demonstrated its litigious inclinations against the hackers. It would seem unlikely that it would take on every individual gamer who applies the key and plays pirated games in the same way. Console disablement would appear a more natural and appealing penalty rather than the legal routes for copyright infringement where potentially millions of defendants exist, since it provides certainty and at virtually no cost. This does however lead to an interesting point of physical versus intellectual property ownership and in the event of a conflict which will be the victor.

By virtue of section 13 of the Sales of Goods Act 1979, all goods which are sold by description will "correspond with the description". Console manufactures may therefore be moving into some grey legal territory if they modify or disable a console. It will be interesting to see what happens if in the future gamers or hackers themselves bring an action of their own along such lines. Untested in the courts as this area is, it just does not feel equitable and, if exercised, Sony may face a backlash from gamers especially since the PS3 is now so much more that just a pure games console and can be the home to all of your treasured photos and other media.

Console disablement as a punishment would appear to be a circumvention of the usual legal routes and, although clearly much more appealing than expensive, lengthy and uncertain litigation, is not going to be looked on kindly. It is interesting to note that, after an initial condemnation of such activities by hackers, Microsoft's approach now appears to be a slightly humbled acceptance of the intricacies of the hackers' minds and an offer to work with hackers rather than pull against it could be the best, and most productive, route for them to take. Further, in a comparable instance in the use of pirated copies of Windows, it is not Microsoft's policy to swoop in and disable the computer but rather to send a warning notice to buy a licence and then potentially take the infringer to court if they do not comply.

Litigation is expensive but we're talking about a company who has sold many millions of consoles globally. Perhaps that is small change to send an anti-piracy message, if they win.

Sony today announced that it is releasing a firmware upgrade to 3.56 for the PS3 console. It is unclear if that is to update the master key, but the timing seems right what with the restraining order granted against George Hotz (Geohot) and the cracked master key roaming freely across the internet.

From the perspective of Sony, it's their business, they will protect it, and they have the technology. Intellectual property rights could trump physical property ownership rights where there is conflict but we await the views from California to clarify a position.

Article written by Brett Farrell, associate, and Katie Hill, trainee, at Barlow Robbins LLP.

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GamesIndustry International is the world's leading games industry website, incorporating GamesIndustry.biz and IndustryGamers.com.

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