Will mod-chips be legal in Australia?

In 2005, the Australian High Court ruled that the combination of the boot ROM and region coding in Sony PlayStations and PlayStation games was not a Technological Protection Measure (TPM). Under the old law, a device had to “prevent or inhibit” the infringement of copyright. Because Sony's technology didn't prevent a copy being made, but only stopped the copy being played in the PlayStation, then it couldn't prevent or inhibit the copying that had already taken place.

This may have changed in the recent changes to Australia's copyright legislation. The definition of a Technological Protection Measure (TPM) was changed from a device designed to 'prevent or inhibit', to a device designed to 'prevent, inhibit, or restrict' the infringement of copyright.1) This effect of inserting the broader term 'restrict' seems to be to legislate around the High Court's decision in /Stevens v Sony/, meaning that a  PlayStation may well be a TPM under the new law, and dealing with mod-chips may soon be illegal.

The changes also introduce a new category of protected devices, called Access Control Technological Protection Measures (ACTPMs). An ACTPM is defined as a device used within Australia in connection with the exercise of copyright, which controls access to the copyright work.2) For ACTPMs, unlike TPMs, it is illegal not only to manufacture or supply a circumvention device or service, but also to actually circumvent the measure. Previously, if you could obtain a circumvention device (mod-chip) from outside of Australia, there would be no restriction on you using that mod-chip yourself; but you couldn't have it done for you. Now, if the device is an ACTPM (but not a TPM), then actual circumvention may result in civil liability,3) and, if done for commercial advantage or profit, criminal sanctions.4) For both TPMs and ACTPMs, the manufacture, importation, distribution, or communication of a circumvention device, or the provision of a circumvention service, will attract both civil and criminal liability, with punishments up to 5 years imprisonment.5)

There is an exception in the new law which provides that a region coding device is neither an ACTPM or TPM, and a device or service designed to circumvent it will not be either a circumvention device or a circumvention service respectively. This means that a device which only has the function of preventing use in Australia of a film, game, or computer program which was purchased outside Australia, will not be protected. (It is important to note that this exception is very narrowly worded – for example, the law may not apply to allow circumvention of a device which restricts use of a game or movie to a particular State or city within Australia.)

The situation becomes more complicated when a single device has functions which both prevent use in Australia and either (a) control access to the copyright work (an ACTPM); or (b) prevent, inhibit or restrict the infringement of copyright (a TPM). Most technical locks on current game consoles arguably have both of these functions – the Sony PlayStation itself, if found to be a TPM under the broader definition of TPM, has both a TPM function and a region coding function.

The question becomes how the new exception will be interpreted, and how tightly manufacturers couple unprotectable region codes with protected TPMs or ACTPMs. In their submission to the House of Representatives Standing Committee on Legal and Constitutional Affairs (LACA) review into Technological Protection Measures, the IEAA stated that “[a]ccess controls used to enforce region coding are tightly coupled with additional and inseparable access controls that distinguish genuine from pirated games”.6) The LACA Committee did not accept that this must always be the case, however, and noted that it should be practically possible to isolate region coding elements from TPM elements.7)

Where the manufacturer creates a dual purpose device, it will be an ACTPM or TPM, but not “to the extent” that it controls market segmentation. This can be read to mean that to the extent that it otherwise controls access, the device will still be an ACTPM or TPM. If a user can circumvent only the regional coding, and no more, then that circumvention will be permissible. A more difficult question arises when the user, in circumventing the region coding, also circumvents the TPM, and whether it was strictly necessary to do so or not. It is unclear under the new law whether circumvention will be prohibited in this case.

There is an argument that can be made that if it is not possible to separate the functions of a legitimate TPM or ACTPM from region coding functions, then none of the combination will be a TPM or an ACTPM. Neither the legislation nor the secondary materials, however, provide any clear guidance as to the extent to which this argument is correct. If this argument is correct, then it is still unclear that where it may be technically possible but extremely difficult and expensive to circumvent only the region coding, whether a 'reasonableness' test would be implied to excuse circumvention of both.

While it may be technically possible to circumvent only the region coding portion of a dual purpose device, it may be prohibitively difficult to do so. Most mod-chips bypass the entire device completely. In the Blizzard v BNetD case, the modders had to bypass a check to allow them to use their games on an interoperable server. In doing so, and because they didn't have the information required to implement their own checks, they also bypassed the CD-key authenticity check.8)) This was held to be an illegal circumvention. If a modder is required to bypass only the region coding portion of a dual purpose device, instead of a simple bypass, they may have to engage in very difficult low level reverse engineering, and may even require confidential information to reconstruct a working access control. By relying on this requirement, a manufacturer can construct a region coding which, while technically legal to remove, would be very nearly (but not quite) impossible to remove without also removing the access code.

When asking, then, whether mod-chips will be permitted under the new law, there are a number of questions:

  • Does the device “control access” to a copyright work? If so, then the device may be an ACTPM, and circumvention will normally be prohibited, as will dealing with or providing mod-chips or circumvention services.
  • If not, does the device “prevent, inhibit or restrict” the infringement of copyright? If so, the device may be a TPM, and while actual circumvention by people with the technical skill to do so will be allowed, dealing with or providing mod-chips or circumvention services will be prohibited. The new wider language of this test means that the device in the PlayStation may well be a TPM, where it wasn't under the old law.
  • If the device also implements region coding, does the mod-chip only circumvent the region code and leave the access control or the TPM intact? If so, the mod-chip will be legal.
  • If the device also implements region coding, and the mod-chip circumvents both the region code and the access control or TPM, the position is still unclear. A Court may ask whether it was reasonable for the chipper to circumvent the TPM or ACTPM in order to bypass the region code. Alternatively, a Court may take the narrower approach and ask only whether it was technically necessary to do so. This is a fundamental uncertainty in the new law, and one which may take another test case, many years, and potentially another High Court decision to resolve.

It is not clear whether mod-chips are legal in Australia. The new law is more restrictive than the old law, because the definition of TPM is broader. This means that a mod-chip which allows the playing of homebrew games may not be allowed, where it would have been under the old law after /Stevens v Sony/. A mod-chip which only allows playing of games from other regions will probably be allowed. What about a device which does both? The answer is unclear at best.

The great danger of this new legislation, in addition to the fact that the types of protected devices has been significantly expanded, lies in the ability of a copyright owner to design around the limitations of the wording. A TPM can be designed to also be an ACTPM, in order to obtain protection from actual circumvention. An unprotected region code can be rendered protectable by creating a dual purpose device in which the functions are separated but any method of circumvention necessitates circumvention of both the access control and the regional coding. The manufacturer is the only person in the position to confine a device to specific functions, but this legislation does not impose any clear obligation to do so. Instead, it provides an incentive to create dual purpose devices.

There remains much uncertainty as to whether the circumvention of region coding in Australia will be legal under the new legislation, and the ambiguity within the legislation provides a potential loophole for manufacturers to obtain legal protection for devices which would not ordinarily be protected. It will now be up to the Courts, again, to determine when Australians have the right to remove arbitrary or anticompetitive restrictions imposed upon their property by copyright owners.

/Copyright Amendment Act 2006 /(Cth) s 10(1).
Copyright Amendment Act 2006 (Cth) s 10(1).
Copyright Amendment Act 2006 /(Cth) s 116AN.
Copyright Amendment Act 2006 (Cth) s 142APC.
Copyright Amendment Act 2006 (Cth)  ss 116AO, 116AP, 132APD, 132APE.
House of Representatives Standing Committee on Legal and Constitutional Affairs, “Review of technological protection measures” (2006) 35.
Ibid, 36.
Davidson v Internet Gateway 422 F. 3d 680 (8th Cir 2005