Nintendo vs Modchips: Score Draw in the CJEU

Angus MacCulloch

The Court of Justice of the EU handed down its judgment in Case C-355/12 Nintendo v PC Box on 23 January 2014. It is the first of two cases concerning the legality of modchips for videogames consoles to come before the Court (Case C-458/13 is remains pending). The judgment doesn’t finally decide on the legality of modchips, but it sets out the factors that courts across Europe should address when deciding on an individual device’s legality.

In a previous post I commented on AG Sharpston’s Opinion, which was delivered in September 2013. The Court essentially adopts a similar approach, but before going into the judgment itself it is worth explaining the technology and legislation that underlies the dispute. If you have been following the case you can skip the next paragraph. Continue reading

The Copyright Directive, Modchips and DRM

800px-Xenium_ICE_in_XBOXAngus MacCulloch

There have been questions surrounding the legality of videogame console ‘modchips’ for many years. We may be about to see some authoritative answers for the first time as a number of cases come before the EU Courts. Two cases, stemming from legal actions instigated by Nintendo in Italy (Case C-355/12) and Germany (Case C-458/13), have been referred to the Court of Justice of the EU for preliminary references. AG Sharpston delivered her Opinion in the first of those cases, Nintendo v PC Box Srl, on 19th September 2013.

Before I look at the Opinion in detail I’ll set out a few background issues – on the technical background of modchips for the lawyers, and their legal background for the technicians. For the last few videogame console generations there have been on-going skirmishes between the console manufacturers who use technical ‘locks’ in their console hardware and software to stop console owners running ‘unauthorised’ software. Unless each game disc or cartridge carries the correct encrypted key it will not run on the console. For the manufacturer this has two benefits; it means that pirate copies of their software will not function on standard hardware, and also that software publishers must get a licence, after paying an appropriate fee, to make their software available to the public. Modchips are pieces of hardware which effectively disable those ‘locks’ allowing pirated software, and legitimate, but unlicensed, ‘homebrew’ software to run on consoles. EU Law protects copyright holders efforts to protect their work through ‘technological protection measures’ (TPMs); such as these encrypted codes or other forms of DRM. All EU Member States are to give adequate legal protection against ‘circumvention of any effective technological measures’, by Art 6(1) of Directive 2001/29. Art 6(2) of the Directive requires MS to give legal protection against the manufacture or sale etc. of any device which (a) has the purpose of circumventing a TPM, (b) has a limited commercially significant purpose other than such, or (c) is primarily designed to do so. We don’t have time for a for a detailed examination of the issues with the Directive in this piece but you can read a lengthy comment on the UK’s implementation and case law which I wrote with David Booton in 2012. Continue reading