Hefty award to Sony in action against seller of PlayStation 2 “mod chips”

Court awards over $6 million in DMCA statutory damages

Defendant Filipiak ran an online business that sold, among other things, “mod chips” that allowed Sony PlayStation and PlayStation 2 consoles to play copied games. Sony filed suit against Filipiak under the Digital Millennium Copyright Act (“DMCA”), which makes it illegal to sell any device that is primarily designed or produced to circumvent a technological measure that effectively controls access to copyrighted works. 17 U.S.C. §1201(a)(2).

Filipiak stipulated to liability for selling circumvention devices. The court awarded Sony over $6 million in statutory damages under 17 U.S.C. §1203(c)(3)(A), which provides that

At any time before final judgment is entered, a complaining party may elect to recover an award of statutory damages for each violation of [17 U.S.C. § 1201] in the sum of not less than $200 or more than $2,500 per act of circumvention, device, product, component, offer, or performance of service, as the court considers just.

The court drew a number of noteworthy conclusions in arriving at the damages figure. First, it held that §1203(c)(3)(A) authorizes a separate award of statutory damages for each device sold. (Filipiak had sold thousands of devices.) Next, the court looked to §504 of the Copyright Act (17 U.S.C. §504) to help it construe the meaning of the word “just” as it appears in §1203. No previous case had construed the meaning of the term in §1203, so the attorney’s fees provision of §504 provided guidance.

The amount of damages was calculated by awarding $800 per mod chip sold before June 12, 2004, and the full amount of $2,500 per mod chip sold after June 12, 2004. On that date, Filipiak had signed a stipulated injunction in which he agreed to discontinue sales of the chips and related software. The court concluded that the sales made after Filipiak signed the agreement constituted a willful violation of the DMCA, thus justifying a higher amount of statutory damages.

Sony Computer Entertainment America, Inc. v. Filipiak, (Slip. Op.) 2005 WL 3556676 (N.D. Cal., December 27, 2005).

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2 thoughts on “Hefty award to Sony in action against seller of PlayStation 2 “mod chips”

  1. harold

    Interesting… did the court look at the loss to Sony in terms of piracy when working out the damages? The main reason for mod chips is that they let people play pirated games, after all. Or were they just plucking a figure out of the air and then increasing it when the guy deliberately went against the DMCA and sold more?

  2. Simon Newman

    Sounds like the latter to me. It’s notable that most countries haven’t found these chips illegal at all under their TRIPS-based laws.

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