The High Court of Australia has allowed Mr. Eddy Stevens' appeal of an Australian Full Court decision, which ruled that mod chips sold by Mr. Stevens in Australia were illegal because they violated the copy protection devices built into PlayStations. The High Court overturned the Full Court decision, holding that because the actual PlayStation and PlayStation 2 chips circumvented by Stevens' mod chips cannot be considered 'technological protection measures,"? as defined by copyright legislation, Stevens' mod chips are not illegal.
An unmodified PlayStation or PlayStation 2 will not play a pirated or imported game, and will only play games containing a certain region code - which cannot be copied. A mod chip effectively works to trick the PlayStation into ignoring the need for this code, and thus permits the console to play pirated or imported games, but does not actually copy the game itself. The High Court held that in order for a mod chip to be illegal, it must contravene a 'technological protection measure,"? which is a device designed to prevent or inhibit copyingin breach of copyright. Because the PlayStation's security devices only prevent the playing of a pirated or imported disc - but do not prevent the actual copying of a legitimate game - their contravention by Mr. Stevens' mod chips does not qualify as a violation of copyright.
It has been speculated that mod chips would be considered legal by the High Court because they do not have purely illegitimate uses. Although they do permit the play of evil pirated games, they also allow wonderful foreign-region-encoded games (i.e., legitimately purchased games from a foreign country) to be played on a domestic machine. Hopefully, Sony will stop region-coding in the future, allowing hard core gamers to import great games from around the world.
Coverage at http://www.hcourt.gov.au/media/Stevens.pdf