On 24 June 2008, the Court of Appeal handed down the judgment in Neil Stanley Higgs v R, a criminal case relating to modchips. Mr Higgs (who calls his business "Mr Modchips") had his conviction under the Copyright Designs and Patents Act 1988 (CDPA 1988) quashed. As a result, many are reporting that the sale and installation of modchips is now legal. This is not a correct. Mr Higgs's victory was due only to the inability of the prosecution to plead its case correctly. Although the fate of Mr Higgs was dependent on the peculiar facts of this case, the comments made by Lord Justice Jacob are relevant to the issue of copyright protection devices at large.
A modchip is a computer chip that is fitted into a computer games console. Games consoles contain embedded codes and will normally only allow a game to be played if the CD-Rom containing the game also contains a corresponding code. The codes on the CD-Rom cannot be copied by normal copying machines although the game "content" can. These codes are employed by console manufacturers to prevent infringing copies of the games from being played on the consoles. Console manufacturers also use this system to prevent authentic games imported from other regions of the world from being played on consoles sold in this region. Installing a modchip into a games console allows such CD-Roms to be played, even though they do not contain the appropriate code.
Specific provisions have been put into the CDPA 1988 to overcome problems of this nature. Section 296ZB deals with "devices and services designed to circumvent technological measures". Most acts which, in the course of business, enable or facilitate the circumvention of effective technological measures are offences under this section. "Effective technological measures" are defined by section 296ZF CDPA 1988 as a component designed, in the normal course of its operation, to protect a copyright work. "Protection" of the work is the prevention or restriction of acts which are not authorised by the copyright owner of that work and are restricted by copyright.
Although this section is relatively complex, the upshot is that an effective technological measure is a device that prevents the copying of a copyright work.
The argument of the prosecution was that by selling modchips, Mr Higgs was in effect encouraging and exploiting a market for pirate games. No-one would make or sell them unless they could be played. Mr Higgs was enabling infringing copy games to be played, so creating an incentive for a pirate market. If the modchips were not present in the consoles, the technology in the console would prevent an infringing copy from being played on the console and the practical effect would be to prevent or restrict infringement.
The Court of Appeal held that this interpretation of effective technological measures was too broad The court asked itself whether it is enough for the technological measure to be a discouragement or general commercial hindrance to copyright infringement, or whether it must be a measure which physically prevents it. The court held that it has to be the latter - a general form of hindrance is not enough. Hence Mr Higgs' conviction was quashed
However, the court noted that the technology in the console as originally sold would be likely to amount to an effective technological measure had the prosecution pleaded its case correctly and led appropriate evidence. When a game is played on a games console, a transient copy of the game is stored in the Random Access Memory (RAM) of the console. Under s.17(6) CDPA 1988, "copying in relation to any description of work includes the making of copies which are transient or are incidental to some other use of the work". In a civil case with very similar facts (Sony v Ball), Mr Justice Laddie held that a transient copy in a games console is an infringing copy of a work.
However, in Mr Higgs's case, the prosecution did not put forward any evidence relating to whether or not his modchip enabled a transient copy of the infringing work to be made in the games console. The implication from the judgment of the Court of Appeal is that it believed that it is likely that this would have happened but could not uphold the conviction against Mr Higgs as they had not seen any evidence in this case that a transient copy was made. Indeed, the judgment described Mr Higgs as a "fortunate man" as this error had been made by the prosecution. The court noted that he may not be so lucky if sued in the civil courts, where such an error in the evidence could have been rectified more easily.
Although Mr Higgs had his conviction quashed by the Court of Appeal, this case makes it clear that it is almost certain modchips are still illegal. It is generally known, (especially by those who have read Sony v Ball, which presumably did not include the prosecution in this case) that transient copies of infringing material are made when games that have been copied are played in a games console. It is also known that this is an infringement of copyright which is enabled by the installation of a modchip. Therefore, the manufacture and sale of modchips is likely to be a circumvention of effective technological measures under s296 CDPA 1988.
Mr Modchip's website implies that he will start business again in just over a month, as a result of his win -whether or not this is sensible given the comments of the Court of Appeal remains to be seen. If he does start selling modchips again, it may well be that the console manufacturers take action against him in the civil courts and obtain damages and an injunction which, if he breaches, will mean he could end up in prison (as observed by Lord Justice Jacob).