Console modders beware: Nintendo wins lawsuit against modchip retailer

With enough technical know-how, the right parts, and good old-fashioned determination, the average person can modify a gaming console to add extra functionality – like media center features or the ability to play “homebrew” games. The most common reason users will modify a gaming console, however, is to play pirated video games. Some console modders have even turned their skill into a viable business, selling not only modding services but also modding parts and tools so that others can mod their own consoles.

One entrepreneurial modder named Jeramie King, who owned a company called Go Cyber Shopping Ltd. as well as several web properties that sold his wares and services, came under the scrutiny of game and console maker Nintendo, which sued King over his practices. Nintendo won, winning damages of over $12 million (CAD) which also includes $1 million in punitive damages. As part of the verdict, King is also ordered to post an apology on his website to Nintendo, its developers, and partners.

The DMCA of Canada

Copyright holders operating in the United States have been enjoying extra protections due to the Digital Millennium Copyright Act that went into effect in 1998. Canada, on the other hand, did not effect similar actions to update their copyright laws until 2012 with the Copyright Modernization Act. This act contains several strict provisions, but the two relevant to the case are:

  • Prohibits the circumvention of digital locks, even for personal use, with some limited exceptions (such as unlocking cell phones).
  • Limits the amount of statutory damages for cases of non-commercial infringement to between $100 and $5,000 for all infringements in a single proceeding for all works. Statutory damages for commercial infringement range from $500 to $20,000 per work infringed.

The Federal Court of Canada ruled that King had engaged in copyright infringement and that he had circumvented technical protection measures. Because King was a seller and also had multiple infringements, the court ruled for the maximum of $20,000 per infringements plus another $1 million as punishment. This is the first major anti-circumvention ruling and a notable victory for Nintendo.

From Nintendo’s statement:

“Nintendo continues to be a leader in bringing innovative gaming platforms and software to our fans and millions of gamers across the globe,” said Devon Pritchard, Nintendo of America’s General Counsel and Senior Vice President of Business Affairs. “Nintendo has an established track record that demonstrates our resolve to protect our iconic characters and franchises. We will continue to protect the creative works of our developers and vigorously enforce our intellectual property rights against those that attempt to steal or misuse them.”

Modding in America Again

If you modify your own gaming console for your own personal use that circumvents software protections, then you are in violation of the DMCA. However, you will probably not be targeted because it is cost-prohibitive for copyright holders to sue every individual. If, on the other hand, you socialize your modding tools or sell services or hardware for the purposes of modding, then you will draw unwanted attention.

Even as far back as 2009, for-profit modders in the United States were finding themselves on the wrong side of the law. Matthew Lloyd Crippen was hacking consoles allegedly to play “legally made backups” and was charging roughly $30 per job. He was arrested and indicted on two charges of criminal acts violating the DMCA. Each charge had the potential of sending Crippen to prison for five years.

Modders who don’t publicize their tools or mod for profit are still in violation of the DMCA, but it would be a civil matter. And the statutory damages would be between $200 and $2,500, which is why copyright holders are unlikely to take on those who infringe in a piecemeal manner. That’s not to say that a large company wouldn’t make an example out of a hapless modder just to remind other modders that there is a law and they are breaking it.

A King Dethroned

Jeramie King, the owner of Go Cyber Shopping Ltd., was known for boasting about his illegal activities on social media. After checking a few of his accounts, those posts don’t appear to exist anymore, although there are several posts that have been replaced with messages from the platform indicating that those posts were hidden due to copyright claims. It is unclear if that action is related to the Nintendo lawsuit.

And while the apology demanded by Nintendo is still missing from the Go Cyber Shopping Ltd. website at the time of this writing, there is the following disclaimer on at least one of the available modding products:

This device is designed primarily to aid or assist in the repair or replacement of defective hardware and also for the use of and development of legal open source software. It does not enable any kind of piracy or have any code whatsoever that circumvents any kind of protection. We do not support nor encourage, if possible, potential infringements of others intellectual property rights - please do not contact us with any question related to this use as we will not respond. DO NOT use or buy this product if you are looking to perform any illegal activity. Opening your Xbox 360 renders your warranty null and void. You should not attempt to repair your Xbox 360 unless it is no longer under warranty, or else you do NOT intend to use your warranty. MODCHIPCENTRAL.COM is not responsible for any damage done to your Xbox 360 or any other devices that you may use with this kit. Please do not attempt to repair your Xbox 360 unless you have experience working with computer hardware.