Sony Cries 'Fraud' to PS3 Jailbreakers

It is perfectly legal to jailbreak a device such as an iPhone in the US, but according to Sony Corp. (NYSE: SNE), it is fraud to jailbreak a PS3 PlayStation.

For the uninitiated, jailbreaking is a hacking or cracking process that allows devices running, for example, Apple Inc. (Nasdaq: AAPL)'s iOS operating system (e.g., the iPad, iPhone, etc.) to gain full access to all features of the operating system. So this removes any limitations imposed by Apple. Once a device is jailbroken, users are able to use other phone service providers and download additional applications, extensions, and themes that are unavailable through the official App Store.

A legal case that is sure to be a landmark is going on right now in Sony v Hotz. For anyone not familiar with the background: In brief, Sony has filed a civil complaint against several developers citing a hack on a PS3. Sony claims this is a breach of the Digital Millennium Copyright Act.

This action has escalated discussion on several gray areas. Sony disabled several of the original PS3 functions that George “GeoHot” Hotz, the infamous hacker who first jailbroke the iPhone, publicly claimed he had circumvented. Among these functions was Linux support. Sony also filed a temporary restraining order to stop the flow of information about the PS3, which by now was freely available, thanks to the jailbreak. According to the order, “Pirated video games are being packaged and distributed with these circumvention devices,” causing “irreparable” harm.

Hotz flatly denies any attempts at piracy, as he sees it as a loophole in the law that allows jailbreaking of mobile phones, but not necessarily other devices. When Hotz was asked "What exactly the issue is, what are you being sued for here?" he replied, “For making Sony mad.”

Other issues come into play, such as, “If I buy it, I own it,” which in the context of software just doesn’t apply. The now invariably standard “shrink-wrap” user contract, where terms and conditions for a product can only be read after purchase, allows for the inclusion of a clause that gives the developer the right to change a license at will, for any purpose.

This issue is being tested in a much-publicized case, Vernor v Autodesk, in which Timothy Vernor tried to sell an already secondhand copy of AutoCAD (made by Autodesk Inc. ) on an online auction site. Autodesk claimed breach of the shrink-wrap license that prevented resale of the product. After claims and counter-claims in the courts, the court ruled in favor of AutoCAD, but this is now up for appeal.

So what is the current state of play?

Let us take on Sony’s logic: You have a computing, mobile, or game device that you bought and paid for. So you would assume there are no restrictions on what you can do with it or use it for. However, your device needs licensed (restricted) software to operate certain functions. The license is arbitrarily changed later by the manufacturer, in this case Sony, to remove certain functions, although you bought it purely for the functions as advertised. Although suspiciously similar to “bait and switch” retail fraud, you have no rights, as you would have agreed to any later arbitrary changes by accepting the “shrink-wrap” license.

So to extend this logic: While working on your device, you discover a vulnerability in the software. You can crack or hack it to restore the functions that at point of sale had been advertised. Should you:

(a) Tell others, and demonstrate your technical expertise?

(b) Keep quiet, and look after just yourself?

It would appear, according to Sony, if you choose (a) you have “exceeded authorized access” and therefore should be prosecuted under the CFAA.

So who has authorized access to my PC, smartphone, or game console, while I’m running software that, apparently, I only rent? If my operating system runs on Windows, does Microsoft’s access rights exceed my own access rights?

In the context of Sony’s current legal action, we all need to remember the Sony DVD spyware fiasco. Sony would appear to have not learned from this bitter experience, or perhaps the pendulum has now swung back in favor of the big industry players.