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US games software giants target UK mod-chip supplier

Seller 'prepared to fight'

Exclusive The founder of a UK-based games console modification company has pledged to fight the US software industry's attempt to shut down his business.

Crewe, Cheshire-based Games World Direct (GWD) last week found itself targeted by the US-based Entertainment Software Association (ESA), after the organisation contacted its ISP, Luton-based UH Hosting Ltd, and demanded its website be removed.

The ESA accused UH of hosting pages in violation of the controversial Digital Millennium Copyright Act (DMCA).

According to an email sent to UH's owner and founder, James Smith, the ESA "has a good faith belief that the person(s) operating the Internet site... violates the DMCA and infringe(s) the intellectual property rights of one or more ESA Members by offering for sale circumvention devices".

Said devices are console mod chips, the ESA alleged.

In an exclusive interview with The Register, GWD owner Ben Holding confirmed his company does indeed sell mod chips. However, he said they are "blank" - they lack any code taken from Sony or any other games console manufacturer, unlike older mod chips whose sale has got a number of other vendors into hot water.

Court action

In July 2004, mod-chip seller David Ball was ruled by the English High Court to have violated the Copyright and Related Rights Regulations Act of 2003, the UK's enactment of the European Union Copyright Directive (EUCD) - Europe's answer to the DMCA - for selling 1500 Messiah 2 chips which enabled the PlayStation 2's copy protection scheme to be bypassed.

And last month, a 22-year-old Caerphilly man became the first Briton to receive a criminal conviction for selling modified Xbox consoles via the web.

Holding maintains he does not infringe the law, since his chips do not contain any code. "If you fit a new chip as sold it does not affect the operation of the console in any shape or form," he told The Register. Only if a customer independently loads homebrew loader code will the chip operate to boot an alternative operating system, such as Linux, he said.

Holding admitted some customers could also use the chip to run games legally acquired overseas, or backed-up games, but he was adamant that they could not do so using the chips as sold. "It's the customer's choice if they locate and install the loader," he said.

He maintained that his chips were no different from blank CDs and DVDs - they too have illegal uses, but that does not prevent their sale because there are also perfectly legitimate uses to which they may be put.

However, Struan Roberston, a senior associate with law firm Pinsent Mason, said such an argument may carry little weight should the case come to court. "Almost all court decisions have gone against mod-chip sellers," he said.

"The law surrounding mod chips is not 100 per cent clear," he admitted, but "anyone who decides to sell mod chips has to be prepared to take a big risk. He has to be prepared for a fight."

Holding said he was indeed ready for a battle, if it comes to that. Past cases have gone against products containing unquthorised copies of copyright code. Holding maintains his do not, and that puts his case in the grey area.

DMCA/EUCD

The games industry has long been opposed to mod chips, partly because they may bypass the region-coding console developers and software firms use to maintain regional markets, but mostly because they can be used to run pirate copies of games.

Like the DMCA, the EUCD, when enacted onto member states' statute books, makes it an offence to bypass copy-protection mechanisms and knowingly to sell or promote devices that can enable such an action.

The ESA is in a tricky position: the scope of the DMCA does not extend to the UK. If a company sells to US consumers then the seller "has to comply with US laws", said Robertson, but there remains the issue of enforcement. The ESA can't compel UK residents to come to a US court.

However, it doesn't need to, Robertson told The Register: the ESA could pursue the case in the UK, most likely through its European equivalent, the European Leisure Software Publishers' Association (ELSPA). Indeed, ELSPA was behind last month's mod-chip conviction, bringing the case to the attention of local Trading Standards officials, who mounted the prosecution.

Robertson said an ISP notified that it is hosting illegal content has a responsibility to remove it, but the company may argue that it believes the material not to be unlawful, but that leaves it in a tricky position should the content later be deemed by a court to have broken the law. ®

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