Are Modchips Illegal?

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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:

Closing thoughts

[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.]