A year ago Federal Court Judge Justice Ronald Sackville ruled that the devices, which allow Australian PlayStation and Xbox owners to circumvent copy protection technology to play games that have been copied or imported, were not illegal. Justice Sackville found that the technology that the mod chips disable could not be classed as a copy protection measure as it also prevented legal activity such as playing back-up copies of legally acquired games.
However, yesterday, the Federal Court upheld Sony's appeal against the decision, and ordered that the company be awarded legal costs. The chips are now illegal.
The decision comes as a blow to the Australian Competition and Consumer Commission (ACCC), which intervened in the orginal case to argue in favour of upholding the chips' legality.
"The ACCC has long believed that region coding is detrimental to consumer welfare as it severely limits consumer choice and, in some cases, access to competitively priced goods," said former ACCC chairman, Professor Allan Fels at the time.
"The ACCC was concerned to ensure that technology which can overcome these unfair restrictions remains generally available for consumer use."
The court's decision is a victory for Sony, which has long argued that the technology was designed to prevent piracy.
However, some industry observers see the decision as defeat for consumers who are coming under pressure from corporations seeking to increase restrictions on the way they use legally purchased copyright material.
Earlier this month Stephen Peach, chief executive officer of the Australian Record Industry Association, said that making a backup copy of a legally purchased music CD was illegal, and rejected suggestions the law should be changed to allow it.
"Once you legitimise home copying then everything becomes home copying," he said.
This just reaks of big business spending the money until it wins.
If they would remove regional coding, there would be no legal reason to have a mod chip. A lot of great games are never released in Australia and therefore there is a need to import. (A totally legal thing to do).
I can see that there need to stop piracy but if they say making a back up copy of my legally obtained software is illegal, then they can pay to replace all faulty media when it fails.