Sony alleged that the Defendant, Filipiak, operated an on-line retail store that sold devices (“mod chips”) used to modify PlayStation and PlayStation 2 video game consoles so as to circumvent copyright protection mechanisms that prevent copied games from being played on them.
Sony sued the Defendant for injunctive relief and damages for alleged copyright infringement under the US Digital Millennium Copyright Act. The DMCA prohibits the sale of devices which circumvent copy protection, and the Plaintiff chose the option of statutory damages under the DMCA (between $200 and $2,500 for each infringement).
The court held that the DMCA allows a separate award of statutory damages for each device sold, and that statutory damages would be set at $800 for devices sold before June 12, 2004 (when the defendant agreed to stop selling the mod chips), and at the maximum $2,500 after that date (because the later sales constituted wilful violations of the DMCA). Ultimately, the District Court awarded Sony over $6 million in statutory damages.
This decision demonstrates that the DMCA can be a powerful took against modders and hackers in the United States. As we have mentioned before, Canada does not have comparable anti-circumvention legislation, but there is some is in the works.