The Sydney retailer was installing chips that break regional coding, known as mod-chips, in Australian-made PlayStation consoles and selling them. The modified consoles allowed users to play games bought from anywhere in the world and back-up copies for the purchased games they had made themselves.
Sony uses regional coding to divide the global PlayStation market into three different geographically exclusive zones. So, the coding in an Australian-made PlayStation console is only compatible with games purchased in the same region.
Sony claimed in its case that this practice of regional coding protects its intellectual property by preventing piracy, and that modifications to the machines infringed its copyright.
According to the decision, however, Sony failed to prove that the regional coding was simply a means of copyright protection. Therefore, the modification chips were not proved to be violating Australia’s copyright laws.
The Australian Competition and Consumer Commission, which supported the retailer, welcomed the decision saying that “Australian consumers can now enjoy games legitimately bought overseas, as well as authorised back-up copies, by legally having their consoles chipped.”
Sony points out that the ruling contrasts with recent UK and Canadian decisions, which were in favour of the company. Sony Computer Entertainment Australia said that it was in discussions with its parent company, considering an appeal.
Sony has also sued Stevens of selling pirate copies of PlayStation games. The case has yet to be heard.