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Games Entertainment

More on Microsoft vs. Lik Sang 573

Levendis47 writes "CNET's News.com is running an article on Microsoft's legal manuevers which have successfully shut down the Lik Sang ecomm store where they've been selling various game system mod chips including the OpenXBox Mod Chip. This leads me to two questions (and I'll admit my ignorance, faux or not, in order to get discussion on this topic): 1) When a customer purchases an XBox (or any game system for that matter) are you intrinsically "signing" an end-user agreement in the purchase that makes modding the device illegal? 2) Could a non-profit org setup an effort to have mod chips produced and "distributed" at the cost of production w/o legal repurcussions? (i.e. would not making a profit on XBox's hardware mods protect you from their wrath?) 3) I understand the whole DRM aspect of mod'ing for playing copied games, BUT, what about legit gray-hacks like the Mandrake Linux XBox project and such? It would seem to me that in the long haul, Microsoft would support such efforts because they could sell more devices (and potentially more software if they licensed an opensource validation library)... "
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More on Microsoft vs. Lik Sang

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  • Nice... (Score:5, Insightful)

    by koh ( 124962 ) on Thursday October 10, 2002 @08:07AM (#4422793) Journal
    Another proof, if any more was needed, that US laws don't apply to US citizens only...

    I wonder how much of a precendent that can make for the Kazaa case, among others...

    • Re:Nice... (Score:5, Insightful)

      by Morgahastu ( 522162 ) <bshel ... fave bands name> on Thursday October 10, 2002 @08:09AM (#4422802) Journal
      There was never any doubt. America laws are applicable to you if you sell/ship to america. If you have a building there, you are under their jurisdiction. There are no clear cut rules for internation e-commerce but thats the way its been working so far. You deal with americans, you deal with their laws.
      • Re:Nice... (Score:5, Insightful)

        by Anonymous Coward on Thursday October 10, 2002 @08:21AM (#4422860)
        so, we are better off not dealing with them then.
        • Re:Nice... (Score:4, Interesting)

          by AndyMan! ( 31066 ) <chicagoandy&gmail,com> on Thursday October 10, 2002 @10:42AM (#4423768)
          so, we are better off not dealing with them then

          true. In the skydiving industry, many companies refuse to sell their products in the US. Granted that this is because of the litigous nature of the US, and not related to any specific law. My point, which I think is valid and relevant, is that companies ARE avoiding doing business in the US because of fear of the courts - criminal OR civil.

          The following European manufacturers will ship to Canada but not the US:

          Thomas Sports Equitment [thomas-sports.com]

          Parachute de France [parachutes-de-france.com]

          ParAAvis Co [paraavis.com]

          _Am
      • Re:Nice... (Score:5, Insightful)

        by Ravenn ( 580407 ) on Thursday October 10, 2002 @09:06AM (#4423111) Homepage

        You deal with americans, you deal with their laws.

        Except: The US laws do not apply where it could inconvenience any US company.

        Proof: The recent lawsuit against the tabacco companies, where the payout was in the millions. An Australian is going to try the same thing, but US law only allows a maximum of 30% of a US-based payout to be given to overseas claims. However, a US company (or person) can claim damaged, etc from another country that could total that county's yearly exports.

        And yet, this is considered fair. Just because the US has nuclear weapons, and other politicians are weak-willed brown-nosers.

        • Re:Nice... (Score:4, Interesting)

          by MoTec ( 23112 ) on Thursday October 10, 2002 @09:20AM (#4423198)
          It should be obvious to the rest of the world now that it's not the American people that run the goverment. It's business. Most citizens don't vote. All of our laws are more influncenced by the lobbyists which are fighting for various big business interest.

          I'm an American, and I'm proud to be one - if only because my standard of living is above most of the rest of the world.

          It's more than the USA having nukes, tho. We have the most powerfull conventional military on the planet, too. But it's more than military force. It's the "American Dream". We still give everyone the chance to make more of themselves here in the USA. It seems like most americans have either forgotten that or become lazy. Maybe both.

          The rest of the world knows, tho. We still get people from all over the world comming here - working hard (something unfamiliar to most americans) and making something for themselves. They're making lots of money and supporting families in other countries.

          Well, that was a bit tangential and all. But it's not the people here in the USA anymore... It's money and business. Kinda perverts the word Democracy.

          • Re:Nice... (Score:5, Interesting)

            by dswan69 ( 317119 ) on Thursday October 10, 2002 @10:23AM (#4423661)
            It's the "American Dream". We still give everyone the chance to make more of themselves here in the USA.

            Not true at all. You have no more chance of getting an equal opportunity in the US than you do in numerous other countries; possibly less opportunity. Americans can't see it, probably because they think the world begins and ends at their borders, but for the rest of the world the US is definitely no longer first choice when considering migration. Possibly better communications have made more people aware that they will have few employee protections there and have a much greater chance of being exploited by their employer than in many other countries.

    • Re:Nice... (Score:4, Funny)

      by AlCoHoLiC ( 67938 ) on Thursday October 10, 2002 @08:31AM (#4422907)
      I no sign no agrement. No understand english. I live where english speak nobody.

    • Are you sure ??? (Score:5, Informative)

      by Zemran ( 3101 ) on Thursday October 10, 2002 @09:56AM (#4423462) Homepage Journal
      Did it occur to you that maybe M$ used Chinese law in Hong Kong ? Despite the rantings of the many US law does not apply outside the US but local law applies everywhere. Most international companies use local law teams to use local law to get the same effect. If they tried to use US law in China they would get laughed at, as they would in most of Europe.

      If a company has assets in the US then they can be taken to court in the US but if they do not then there is nothing a US court can do, they do not even have an address to write to. M$ frequently tries to give the impression that they are able to apply there US values elsewhere but it does not work. Look at some of the European copyright cases, they cannot get their licenses to hold up in Europe. They prosecute under other laws, like fruad etc. and claim it as a victory against the sea borne bandits but it is just an ordinary case under ordinary European law.

      I do not know any more about this case than I have read but I have not read anything that suggests that anything strange happened. China is having a crack down on things like this and would have been happy to use their own legal system to support M$.
  • Xbox-Linux project (Score:5, Informative)

    by unixmaster ( 573907 ) on Thursday October 10, 2002 @08:09AM (#4422801) Journal
    They dont directly mod the Xbox.
    They say you need a modded Xbox machine to use it and they are using this clause against possible DMCA issue :

    Everything done on this project is for the sole purpose of writing interoperable software under Sect. 1201 (f) Reverse Engineering exception of the DMCA.

    So they are perfectly legal imho...

    • So sue me. (Score:5, Insightful)

      by TechnoLust ( 528463 ) <<moc.liamg> <ta> <tsulonhcet.iak>> on Thursday October 10, 2002 @08:29AM (#4422895) Homepage Journal
      Good point, but really it doesn't matter. You can sue me because you don't like the shirt I'm wearing, or I can sue you because I don't like your pants. It doesn't matter if there are any laws involved, if you have enough money, you can force me to stop wearing that shirt, and maybe even pay you damages for the "trauma" of seeing me wear that shirt. I really wish it didn't work that way, and there was a time when people actually worked their problems out WITHOUT calling in a lawyer, but everybody these days is greedy, and they want to sue and get $millions in damages.
      • Re: (Score:3, Insightful)

        Comment removed based on user account deletion
    • by martyn s ( 444964 )
      No. That section has so many loopholes that it can almost never be applied. For example, you can only reverse engineer if you want to IMPROVE the security of a product and not undermine it (not that I see the difference). This is according to Robin Gross from EFF, at 2600 H2K2.
  • by MrRee ( 120132 ) on Thursday October 10, 2002 @08:09AM (#4422803) Homepage
    Seems to me hardware vendors don't have a leg to stand on concerning aftermarket modifications to their hardware. People have been moding cars for years with aftermarket parts.

    Dangit, if I buy the hardware and want to modify it, I payed for it--it's mine--why shouldn't I be able to? Void the warranty, yes. But don't tell me I'm doing something legally wrong.
    • by Louis-Nap ( 552925 ) on Thursday October 10, 2002 @08:16AM (#4422826) Homepage
      It all comes back to the DMCA (damn the US government for making a law that always reminds me of a Village People song!). Whether it's right or wrong, the law says you can't go around and break apart copy protection systems, which is what goes into the consoles. If Ford were to ever start putting region encoding in their engines, then modding cars would all of a sudden require a lawyer :0)
      • by MrRee ( 120132 ) on Thursday October 10, 2002 @08:22AM (#4422863) Homepage
        I work for Ford in a Taurus/Sable plant's IT department. The computer and software that controls air/fuel mixture/shifting/braking/air-bag/climate-control/e tc. is indeed copy protected. The software varies from region to region (california is different from the rest of the US, Canada is different, etc). Yet there are "speed chips" available. Ford isn't going after these "speed chip" manufacturers under the DMCA.

        Yeah, it does sound like a Village People song-I agree with you there.
      • http://ars.userfriendly.org/cartoons/?id=20020428

    • by Anonymous Coward
      It all depends.

      The article clearly states that they were selling XBox with mod chips pre-installed. Though you may argue that you have the right to change parts on an electronic machine, it could still be legally questionable if:

      - They have a distribution agreement with Microsoft that prevents them from altering the XBox

      - These changes include installing software ( even if it is in ROM, EPROM, FLASH, etc ) that is illegal under DMCA
    • by reachinmark ( 536719 ) on Thursday October 10, 2002 @08:24AM (#4422879) Homepage
      Dangit, if I buy the hardware and want to modify it, I payed for it--it's mine--why shouldn't I be able to?

      What if it's a new car, and you modify it so that it fails to comply with emission regulations? Modding a car is not the best example - a modded car can be illegal to drive.. or worse, kill people. A modded x-box isn't likely to have such an extreme effect (unless, maybe, you play for 86 hours straight..?)

    • Dangit, if I buy the hardware and want to modify it, I payed for it--it's mine--why shouldn't I be able to? Void the warranty, yes. But don't tell me I'm doing something legally wrong.


      You aren't. Once you buy that XBox, you can do whatever you want with it. There's a long standing rumor that you can't mod your consoles -- but that's just a rumour, put there to discourage people from doing it.

      That's why Microsoft doesn't go after modders themselves -- they litereally wouldn't have a leg to stand on.

      Instead they go after the modchip makers and sellers. It's a little easier that way.
  • by rjforster ( 2130 ) on Thursday October 10, 2002 @08:10AM (#4422804) Journal
    Selling the hardware is normally a loss-leader with the idea being to get you to buy loads of high profit margin games, which even out the overall deal in their favour.
    As soon as you only buy the hardware (because with a mod-chip it makes a cheap general purpose computer) then the finances get all screwed.

    • by bludstone ( 103539 ) on Thursday October 10, 2002 @08:16AM (#4422825)
      Selling the hardware is NOT normally a loss-leader. This is a general misconception about the gaming industry. There have been 2 consoles sold at a loss; Dreamcast and X-Box. The gamecube and the ps2 both make profits for nintendo and sony respectively. Sure, its not much.. may even be cents.. but please do not continue to push this rumor.

      Just to back your argument up a bit. The basis of profit for sony, nintendo, and MS are, indeed, selling high profit margin games. But MS is the only one currently losing money on a console.... and they are losing money hand-over-fist.
      • Close.... 4 consoles (Score:4, Interesting)

        by alexhmit01 ( 104757 ) on Thursday October 10, 2002 @10:09AM (#4423556)
        The Saturn was the first "sold at a loss." Saturn + Dreamcast at loss = Sega almost bankrupt.

        The Gamecube was admitted to be sold at a loss (admitted by Nintendo at launch) but it was small. Estimates were that it was sold at a $5-$15 loss, compared to the $200 or so on the Xbox. And that was only at launch, they got costs down real quick and were profitable before and after the price cut.

        The "all consoles" are sold at a loss is a strange rumor. They have always been sold "at cost," retailers make ZERO markup on the consoles, or at least that was the case in the 80s. We used to get our games through a wholesaler through a family friend in retail (wholesale to mom-and-pop stores, not Toys R Us level stores), we'd save about $8 a game, but couldn't get ANY savings on consoles. I think we saved sales tax, but I don't remember if we had to pay it through their store.

        Alex
    • by XaXXon ( 202882 ) <xaxxon&gmail,com> on Thursday October 10, 2002 @08:20AM (#4422848) Homepage
      Yet another mis-use of government to keep a bad business model alive..

      Seems like MS is still stuck in the "New Economy".. If you don't want to lose money, don't sell something for less than it costs you. Plain and simple math.
    • by Scarblac ( 122480 ) <slashdot@gerlich.nl> on Thursday October 10, 2002 @08:24AM (#4422874) Homepage

      As soon as you only buy the hardware then the finances get all screwed.

      Yes, but that's not your problem, is it? That's a "feature" of their business model. If people decide to use their property in some other way, or just decide to buy no games, then it may cost MS money - but that doesn't make it illegal! You never went into any agreement with them to let them keep making profit off you, you just bought some box cheaply.

      On the other hand, these mod chips apparently contain a modified version of the Xbox's RAM, and therefore they're quite simply illegal, if they really do.

    • I own a restuarant. I give away all the food for free, but i charge anyone who walks past on the sidewalk $100 to make up for it. Now, some people are walking past without paying! If we don't get some laws passed, then the finances get all screwed!
  • "Legit"? (Score:4, Informative)

    by krinsh ( 94283 ) on Thursday October 10, 2002 @08:10AM (#4422805)
    You assume that ANY modification of the electronics is legit. I doubt the producer/manufacturer, especially Microsoft, would approve of any hardware or software modifications to consoles and other devices designed for a particular purpose. Take note of the FCC stickers accompanying devices that produce or receive signals of any kind.
    • Re:"Legit"? (Score:3, Insightful)

      by GigsVT ( 208848 )
      I'm not sure what you are saying.

      MS doesn't have to approve of changes. You see, once you sell something, it's no longer yours, you can't tell someone how to use it (with the small exceptions of land covenants).

      As far as FCC certiification goes, as long as you aren't reselling the device, it's meaningless. FCC certification only is required to sell hardware, not to use it.
  • by Lieutenant_Dan ( 583843 ) on Thursday October 10, 2002 @08:10AM (#4422806) Homepage Journal
    If Lik Sang would have only seen the light and made the whole operation Open Source they would not be in this. The vast technical knowledge contained within the Open Source developer community would have gone a long way to create a product that would be able to weather MS's legal attacks.

    Only when we realize the vastness of the experience of the Open Source developer community can we reach the heights that the Dreamcast and Jaguar reached in the gaming world.

    • ...can we reach the heights that the Dreamcast and Jaguar reached in the gaming world...

      Uhm. In all seriousness... was that a joke?
      (Think "where are they now")
    • Yeah, whatever.

      Your argument only works if the proprietors of Lik-Sang did what they did to be altruistic. But, since they were doing it to make a profit it would've been completely illogical for them to give their business away for free.

  • by c.derby ( 574103 )
    "It would seem to me that in the long haul, Microsoft would support such efforts because they could sell more devices (and potentially more software if they licensed an opensource validation library)... "

    Well, if they weren't selling the devices at a loss I'm sure that just "selling more devices" would be acceptable. They have ot make their money back somewhere (software & accessories).
  • Er, no (Score:5, Interesting)

    by cca93014 ( 466820 ) on Thursday October 10, 2002 @08:12AM (#4422811) Homepage
    It would seem to me that in the long haul, Microsoft would support such efforts because they could sell more devices

    They don't want to sell devices, they want to sell games...

    I'm still undecided as to whether the Xbox is a honeypot for MS to see how easy people find it to crack the hardware, in preperation for whatever is going to replace it. I'd like to think it isn't, but then for some reason XP refuses to return any results if I search my entire system for "*.java" in XP, and I'm a Java Developer...

    • DRM Practice run (Score:4, Interesting)

      by DrSkwid ( 118965 ) on Thursday October 10, 2002 @08:40AM (#4422948) Journal
      I'm firmly of the opinion that the DRM features are present in the XBox as a practice run.

      They can hone their skills on known hardware.

      Thus being cracked and modded is a successful operation for them. They even get practice on how to oil the wheels of litigation.

      All this with not much reputation to lose, after all it's *only* a games console.

      Once they've got it sorted out with their own hardware design they will be in a position to know how to issue "DRM Compiant" certificates for motherboards, for a fee. Then we'll be paying an MS tax on hardware without anyone arguing about pesky OS's. Their patent on DRM OS's may mean that there'll be another license fee to pay should *your* OS want to use the DRM facilities built into *your* motherboard.

      • Re:DRM Practice run (Score:3, Interesting)

        by schlach ( 228441 )
        I'm still undecided as to whether the Xbox is a honeypot for MS to see how easy people find it to crack the hardware, in preparation for whatever is going to replace it.

        The Xbox is a honeypot to see how easy it is to tap some of the 9-billion-USD/year-and-rising video game market. Carving off a decent chunk of the console market (don't forget they've already got a PC games division) would represent a substantial slice of their yearly gross. Seems like a good enough reason on it's own.

        I'm firmly of the opinion that the DRM features are present in the XBox as a practice run.

        Maybe, but this is a bit of a stretch. The Palladium group is totally separate from the X-Box group. Different buildings, different campus. Maybe they've met each other.

        MS isn't substantially in the PC-hardware business. Don't confuse their Palladium plans with the TCPA hardware plans. We like to make up fantastic M$ conspiracy plans (they've certainly replaced NSA as the /. boogeyman), but they just don't hold water. Reason: MS devs are the same as the rest of us. (Granted, most of em got recruited straight out of school, so they might be lacking real-world experience, but they're still human.) It's only HR, Marketing, and Legal that are the evil departments, but then show me a corporation that has Catbert the Fairy Godmother HR rep.

        The point is, as I struggle to get back on topic, that Palladium could be a very good thing for the Windows world. The ability to efficiently separate software privilege according to least-privilege principle and the status of trusted, signed code -- what's not to like? The thing that all of us are worried about is whether the power to determine what code to run will lie with the end-user or with some external authority.

        My guess is both. Right now, XP ships with a very decent home firewall. However, group policy on a domain can overrule Administrator's decision to turn on the firewall, so that in a corporate environment, you don't break things by having your firewall on in an ostensibly trustworthy environment. It's not a big stretch to see how, on an unconnected computer (home user), full control of Palladium's features lies with Administrator, and on a business domain, full control lies with the Domain Administrator.

        You could run any app you wanted, but as soon as you connected to a Domain, you'd have to check with the Domain's policy server to verify whether these programs are also allowed to run when connected to the domain. Kazaa would probably be shut down, but Word would stay open. Mozilla would never miss a beat, but bo2k would disconnect.

        Compare this to TCPA, where control cannot *possibly* be with the end user, because the end user does not even control the hardware. TCPA hardware might have a market with business, but I can't imagine many people jumping on board to buy crippled hardware, and as long as people are voting with their wallets, somebody will be selling non-crippled hardware.

        And don't forget that these days most folks can do everything they need to on free software on a free OS. I don't think we're going to lose converts to the DRM craze, so even in a TCPA-dominated world, you'll only need the platform to run specialized software like Photoshop, 3dsmax, etc., where companies can actually make money selling exclusively TCPA-aware versions. But then look at the progress of the gimp, and blender...

        bleagh, this is too long to discuss in a post. =) Summary: TCPA bad, Palladium good, maybe. But then again, I like NSA's SELinux, too... ; )
  • by mumblestheclown ( 569987 ) on Thursday October 10, 2002 @08:12AM (#4422812)
    I am always underwhelmed by arguments that " {grey activity} should be legal because it would help {microsoft/mpaa/riaa} sell more {software/movies/music}."

    The fact of the matter is that if under current law those companies are the rightsholders, it is up to them to decide whether or not to undertake some alternate distribution method. Just because under some economic analysis such grey activities may help them sell more units does not make those activities any more legal or morally acceptable.

    If you honestly a) hate RIAA and b) think that Napster et al increased music sales, then you would NOT have used napster, right?

    • by CashCarSTAR ( 548853 ) on Thursday October 10, 2002 @08:18AM (#4422836)
      Overall, P2P increases music sales. However, what has happened is that sales of top-40 profitmaking stuff have been replaced with sales of either indie artists or older material. (Often used). That's what the RIAA doesn't like. It's not about piracy, it's about market share.
    • by ReconRich ( 64368 ) on Thursday October 10, 2002 @09:08AM (#4423115) Homepage
      The fact of the matter is that if under current law those companies are the rightsholders

      Hold on there cowboy. Modding your X-box can't be illegal because you own it. It is not, by anybody's definition licensed. I bought it. It is not software. It may contain software, which is presumably licensed, but that license cannot disseize me of property rights. The Mod itself could be illegal, that is, and illegal copying of copyrighted software, and that seems to be what is happening here. If I buy a mod chip from someone, they are responsible for the legality of what they are selling, not me, so long as there is a quid pro quo. Which seems to be where Lik Sang screwed up.

      grey activities may help them sell more units does not make those activities any more legal or morally acceptable

      Your statement here makes the assumption that we all believe that sellers have the intrinsic right to dictate to buyers what they can and cannot do with the product which they have bought. This is so utterly ludicrous that I have to believe that you are astroturfing for the MPAA. I suggest you review the legal concept of quid pro quo. I'll give you a hint, its latin, and it means "this for that". And when you sell something You Give Up Ownership This is the fundamental principle of Capitalism. Get used to it.

      -- Rich
  • by Louis-Nap ( 552925 ) on Thursday October 10, 2002 @08:13AM (#4422814) Homepage
    It seems to me that this whole situation isn't as clear-cut as it may first appear...for starters, there only seems to be once source to confirm that it was Microsoft who ordered Lik Sang closed down (which admittedly was Microsoft itself, but the Australian branch, which from prior experience I know shouldn't be trusted :0).

    Also, why are Lik-Sang still collecting e-mail addresses for people who want to be told when they are back online? Why not just shut down the domain and save on hosting bills? I know most of you are going to say that it's a Microsoft ploy to get a list of addresses of mod chippers, but that's a little farfetched even by MS standards.

    The much more likely scenario is that MS doesn't want Lik-Sang to close down altogether (betcha they sell a whole pile more PS2 chips than they do X-Box ones), they just want them to stop selling X-Box mod chips...in which case, the site will be back up in a few weeks, when all the legal problems are sorted and Lik-Sang have "smelt the glove" of Microsoft :0)
  • by nuggz ( 69912 ) on Thursday October 10, 2002 @08:15AM (#4422820) Homepage
    If it is your property you should be able to do whatever you want with it.
    If as a condition of sale you agree to certain things, then you must conform to them, you are free to buy or not buy. But I should clearly and explicitly tell you BEFORE you purchase the product.
    People should be free to have almost any contract they wish, I don't think the government should restrict my freedom by saying I can't enter into a fair and equitable agreement.

    Undisclosed onerous conditions should not be be valid.
  • not exactly (Score:2, Informative)

    "It would seem to me that in the long haul, Microsoft would support such efforts because they could sell more devices (and potentially more software if they licensed an opensource validation library)... "

    But MS does not make a real profit on the devices, only on the software. The XBoxes are dead cheap to make sure people by them, instead of other gaming consoles. So if you have a mod chip that allows the xbox to run other software, even if it's not illegal, then you're still a pain in the ass for microsoft because people use and (possibly) buy less of their software.

  • You got busted for making (or altering) illegal (or otherwise legal) hardware for a closed system.

    Next time anyone does this, make the *source* available so we can do it ourselves, and not force us to pay a red cent to make it work.

    *sniff sinff* Microsoft busted us for being a monopoly!

    Boo Hoo. Post the source, post the how to's before thinking about selling the unit.

  • by Epeeist ( 2682 ) on Thursday October 10, 2002 @08:16AM (#4422827) Homepage
    > The chips typically allow a game machine to play legally and illegally copied discs, run unauthorized software, and play game discs intended for other geographic regions.

    I buy an Xbox (not that I would), it is therefore mine. I chip it, which presumably voids the warranty, but this is still legal because I own it.

    If I use it to play pirated games then I am breaking the law because the vendor has copyright on the game, not because I have done anything illegal with the console.

    If I purchased the console then it is up to me to decide what software I run on it. The OEM has no right to tell me what is and is not authorised software.

    If I use it to play games from other regions then this should be fine, because the vendor of the game is applying a restraint on trade.

    This article seems, like many others, to be offering a report that has little to do with logic or the law but has everything to do with partiality.
  • Copyright BIOS code (Score:5, Informative)

    by vaguelyamused ( 535377 ) <jsimons@rocketmail.com> on Thursday October 10, 2002 @08:16AM (#4422830)
    The Mod chips Lik Sang were selling probably contained partial copies of the BIOS code from the X-box. Since the BIOS code is usually copyrighted this is a copyright violation. While I don't necessarily agree with what MS is doing Lik Sang should have been a little more cautious. They gave MS an easy legal device to threaten them with, copyright violations, when it would've been more difficult to assault them with DMCA in Hong Kong.
  • My thoughts, FWTW (Score:5, Informative)

    by gila_monster ( 544999 ) <traveler...in...black+sd@@@gmail...com> on Thursday October 10, 2002 @08:16AM (#4422831) Homepage
    1) When a customer purchases an XBox (or any game system for that matter) are you intrinsically "signing" an end-user agreement in the purchase that makes modding the device illegal?

    I haven't seen the packaging, but EULAs aren't that common on hardware purchased. In fact, the traditional business model is that you own the hardware you have purchased, although you do not own the rights to the design. I think MS would object if you were modding boxes and reselling them, however. (We can debate whether they have a legitimate gripe all day....)

    2) Could a non-profit org setup an effort to have mod chips produced and "distributed" at the cost of production w/o legal repurcussions? (i.e. would not making a profit on XBox's hardware mods protect you from their wrath?)

    I doubt it. First, this isn't about profit, it's about ownership of the design. Microsoft's beef with Lik is that they are infringing on MS proprietary assets. (There's a lot more going on, of course, being that they're MS.) Even a non-profit group is not allowed to ignore intellectual property laws, so there's no protection inherent in being non-profit.

    Second, remember that "non-profit" doesn't necessarily mean "makes no money." Many non-profit companies thrive & make a ton of bucks (Underwriters Labs, for ex), but they do not distribute dividends to shareholders. "Profit" is reinvested in the company. (Business gurus, correct any inaccuracies here.) As such, NP companies aren't that much different. They're still making money and paying salaries.

    3) I understand the whole DRM aspect of mod'ing for playing copied games, BUT, what about legit gray-hacks like the Mandrake Linux XBox project and such?

    I'm not prepared to address this one right now. (I'm at work, and I could easily spend a day trying to analyze that situation.)

    Short version is that MS wants to prevent distribution of a chip they believe infringes on their intellectual property. They aren't really upset with the people making the mods...yet....
  • License & Copyright (Score:5, Interesting)

    by phulshof ( 204513 ) <phulshof@xs4all.nl> on Thursday October 10, 2002 @08:19AM (#4422839) Homepage
    The answers to the questions are IMHO:

    1. No, you don't sign an agreement when you buy an XBox. Even if such an agreement was included, it is questionable if this holds any legal value.

    2. Profit is not truly an issue in this conflict.

    3. There are a few reasons why a MOD chip (and/or its sale) can be illegal:
    - The MOD chip contains copyrighted code from the original.
    - The MOD chip qualifies as a circumvention device under the DMCA or similar non-US law.
    These are usually the reasons a MOD chip is pulled off the market by a court order.
    • by iceT ( 68610 ) on Thursday October 10, 2002 @08:48AM (#4422992)
      Even if such an agreement was included, it is questionable if this holds any legal value.

      I bought an XBOX, and since the agreement wasn't on the outside of the box, Buying it is not an implicit agreement of any kind.

      It's not like DirecTV where, when you buy the equipment, they open it right there, take down your information, the box serial number, and make you sign an agreement about establishing service...

      Also, Several of the chips that Lik-Sang sold didn't include any BIOS software... So it literally was just a collection of parts, and a method of connecting those 'parts' to an XBOX... I'd think if they included instructions on how to hook it to your toaster, there's not much basis for a lawsuit.

  • by coditoergosum ( 576312 ) on Thursday October 10, 2002 @08:19AM (#4422847)
    Microsoft won't allow anyone to mod their xbox because then anyone could write software for it. If this were to happen, than M$ wouldn't get any money from game publishers, etc for allowing said publishers to distribute games for xbox. They might allow someone to port linux or other OSs to the xbox, but only if that someone were willing to pay the same fees as game publishers (or perhaps even higher fees), but I doubt it. Even then M$ would probably force the ported OS to use DRM, so it would only run the software they chose (ie, whose developers payed them).
  • by den_erpel ( 140080 ) on Thursday October 10, 2002 @08:21AM (#4422853) Homepage Journal
    It would seem to me that in the long haul, Microsoft would support such efforts because they could sell more devices (and potentially more software if they licensed an opensource validation library)... "

    As far as I know about these things, the hardware is sold at cost or with a loss, and the manufacturers want to get profit out of the games.

    Modding it would not increase their profit, instead, as you are running software where M$ (or Nintendo or Sony) they are not paid for.

    On the other hand, Sony does support Linux on their PS/2 and develops for it. I guess that they think (rightfully) that if you buy a PS/2, you will most likely buy games for it too. Having Linux (and network on it) might just be the extra push the customer needs.
  • Licenses (Score:5, Insightful)

    by sql*kitten ( 1359 ) on Thursday October 10, 2002 @08:22AM (#4422862)
    1) When a customer purchases an XBox (or any game system for that matter) are you intrinsically "signing" an end-user agreement in the purchase that makes modding the device illegal

    Well, if you aren't, then the GPL isn't binding either, since you aren't intrinsically "signing" anything when you use GPL'd code. Why is it that the EULA is wrong, but the GPL, BSD license etc are OK? After all, in the Unix community (or the traditional Unix community, at any rate) programmers and users were largely indistinguishable, so using source code is analogous to using a consumer application.

    Be careful what you wish for: you might get it.
    • Re:Licenses (Score:3, Informative)

      EULAs apply to usage of the software, while GPL/BSD/etc place no restrictions on use of the software but on further redistributions and modifications which aren't normally allowed by EULAs at all.
    • "
      Well, if you aren't, then the GPL isn't binding either, since you aren't intrinsically "signing" anything when you use GPL'd code.
      "

      Correct. Ten points to the smart one at the back. Question 2. Why doesn't this matter?

    • Re:Licenses (Score:5, Insightful)

      by Wdomburg ( 141264 ) on Thursday October 10, 2002 @08:35AM (#4422921)
      >Well, if you aren't, then the GPL isn't binding
      >either, since you aren't intrinsically "signing"
      >anything when you use GPL'd code.

      As has been pointed out numerous times before, there is nothing preventing you from *using* GPL code without agreeing to the GPL.

      The license is for *distribution* not use. As you have no right to distribute copyrighted works otherwise, you are bound to seek licensing before doing so, in which case the authors provide the GPL.

      Matt
    • The GPL is binding because it gives you rights beyond normal copyright law (redistribution, etc). If you don't agree to the GPL you can still use the software, but you only have the rights granted by normal copyright.
      Most other EULAs demand that you agree to them so that you have the rights that would normally be granted by copyright. This is in contradiction to the doctrine of first sale, and a few other legal norms. The GPL is not. If ANY EULA is binding it would be the GPL. This issue has really been discussed to death on slashdot already, just search around and you'll understand eventually.
    • Re:Licenses (Score:5, Informative)

      by Col. Klink (retired) ( 11632 ) on Thursday October 10, 2002 @08:42AM (#4422956)
      Software is protected by Copyright. When you buy a book, you have a right to resell it or copy for personal use, but you do not have a right to make copies (or derivatives) and distribute them.

      The GPL gives you additional rights: the right to copy and make derivative works, provided your derivatives have the same license. In *no way* does the GPL take any rights away from you. You would not otherwise be able to redistribute a copyrighted work.

      Under normal copyright, you have every right to take source code that you download and modify for your personal use. The GPL only kicks in if you try and redistribute.

      Click-through EULAs that say you can NOT modify for personal use, or limit what you can use a product for, or in any other manner take away your rights are entirely different from a license like the GPL which extends your rights.

      Under the First Sale Doctrine, MS can't sell you an XBox and tell you what you can do with it.
    • Re:Licenses (Score:3, Insightful)

      Copying or using any copyrighted program is illegal. To even use the software or copy it, you must agree to the gpl. If not then the fsf has a case agaisnt you since you are in violation of copyright. So if the gpl is not legally binding then you can not use or copy their products.

      The ms EULA is far different. MS by law can only dictate whether or not " you can use" or " copy the product". All this garbage about installing drm software without your consent hidden in some EULA in a service pack or agreeing not to benchmark or say anything bad about ms on a website is not supported in copyright law. The terms are rediculous. Yes a legal agreement, is binding if you actually sign a legal contract with a notory present .

      Not by clicking a button or reading a notice saying you must agree to the EULA inside this cd before opening it. That is true bs and I doubt will hold up in court. Bill Gates mentioned the EULA in an interview in 1980 as an agreement similiar to petro-chemical plants allowing Exxon to use their patents for oil refineries. I do not buy this. No singed contract, no legitimacy. And signing permission to use something thats patented is different then some vague non signed agreement about doing something that does not cover "right to use" or "right to copy".

      I would seriously not be supprised if ms in the future puts a sticker on the xbox stating "By opening the box, you agree to the terms of the EULA inside". If ms did this, it would still not apply but I wonder if it could be argued on behalf of Microsoft that the hardware is copyrighted?

      What can and can not be a copyrighted work?

      If its argued that hardware is copyrighted, then even using it without their permission is agaisn't copyright laws. I know this sounds crazy but I fear this is where the IP world is heading. They want patent like powers of copyrighted works, and to top it off they still want to own them after they are purchased by a consumer! Before you know it, auto repair shops could be sued by car manufactors for violating copyright laws by changing oil and reparing their vehicles.

      Anyway ms has no case unless they dare to bring up the issue of the hardware itself being copyrighted which I do not think they will do unless they are desperate.
  • As always, money talks!

    1) M$ wants to make money from games and selling expensive SDKs.
    2) M$ introduces a console called XBox constructed from a PC with some signing stuff in HW.
    3) XBox gets modded fairly quickly.
    4) XBox can now run Linux.
    5) M$ sees a potential threat divided in two parts a. one can copy games, b. one can use the XBox to pull M$'s legg (running Linux on it).
    6) M$ sues the hell out off anyone getting to close.
    7) M$ ends up with a huge pile of money!

    Please excuse me ranting, but I get so tired of their lame attempts to introduce signing. Use a custom CPU with on-chip signing, a motherboard without any standard devices etc. and it will become harder. They could not for a minute have thought that a PC based console would be left unhacked.
    As for custom conponents being more expensive - the *big* money can be found in games, not the actual hw. If they were sure to sell games they could just give the thing away!
  • by jukal ( 523582 ) on Thursday October 10, 2002 @08:26AM (#4422885) Journal
    Every time when something like this happens, it makes me think what is so different in making computers or software compared to producing food,cars and comdoms for example. I can "mod" my car, boat or socks as much as I want - atleast as long it remains secure for me and others. Also, I can glue my socks and condoms together if I want - I don't know if that's wise, but I can. So, why is it illegal to glue this chip and the device together - or to sell this chip.

    I guess this business is just so young, maybe 50 years of serious computer/software business so far, that these failures are just result of immaturity. In my opinion there is nothing so different in this industry of ours and it should just follow the same rules as with everything else - with only minor changes.

    • The difference with modding your car and your OS is that, for some misguided reason, the courts see software as a service, rather than property. The big debate here is that the bios for the mod chip contains MS proprietary code, and by distributing these things, you are cutting into MS's IP.
      Does MS sell these chips? No. Is Lik Sang cutting into their market? No. Do these chips contain MS proprietary code? Who knows. To me, it contains only sand and metal.
      Nobody is using this technology to replace the X-box, only augment it. My opinion is that countries already have laws to deal with piracy, enforce those ones, instead of making new ones.
  • by zmooc ( 33175 )
    Can someone please explain to me what laws where used to stop Lik Sang?
  • by jdreed1024 ( 443938 ) on Thursday October 10, 2002 @08:28AM (#4422891)
    BUT, what about legit gray-hacks like the Mandrake Linux XBox project and such? It would seem to me that in the long haul, Microsoft would support such efforts because they could sell more devices (and potentially more software if they licensed an opensource validation library)... "

    This statement makes no sense. Why would MS support Linux - their sworn enemy? Why would they make it easy for people to buy their hardware and run Linux on it?

    Even if MS didn't care about Linux, just look at the facts. The Xbox is basically a PC. However, it's sold at a huge loss. The sales of games make up for this loss. However, if everyone buys the Xbox at a loss, and then doesn't buy any games, but installs Linux on it, and uses it as a PC, MS loses a shitload of money. Without the Xbox, these same people wanting a PC would have to buy one from Dell, or something, which comes with Windows XP and other MS software, so MS has made money on software, without losing any money on hardware.

    The only reason MS entered the game console market is to make money. They need the games in order to make money. Without them, they lose, and the Xbox will be as dead as the Nintendo PowerGlove.

    Yes, you _can_ buy an Xbox, and run Linux on it with a modchip, but why would you want to? Why would you want to use MS hardware, which is a stipped down, shitty PC, and run Linux on it, when you can get a mini form-factor (XPC) bare-bones system for under $150, add a processor and drive, and be up and running on a better system without having to look at an MS logo everyday? Sure, I understand the "because I can", argument, and yeah, it's cool to make Linux run on something that wasn't mean to explicitly support it, but really, it's not like it's going to become a true platform.

    That having been said, I am in no way supporting MS' extension of US laws to foreign companies. That does in fact suck.

  • othernews (Score:4, Funny)

    by oliverthered ( 187439 ) <oliverthered@nOSPAm.hotmail.com> on Thursday October 10, 2002 @08:29AM (#4422896) Journal
    A man has been arrested to taking a sledge hammer to an Xbox after Microsoft said, "modification and disassembly of the XBox hardware is against the EULA"

    • Re:othernews (Score:3, Interesting)

      by back_pages ( 600753 )
      Ya know, I've wondered about stuff like this.

      After John Lennon made his infamous remark about Jesus Christ, angry fans collected their albums and made a huge pile to be smashed by a steam roller. The PR fiasco that caused was gigantic.

      Suppose enough rabid people were willing to spend $200 on an Xbox (or other MS products), lose some money for MS, and stage a peaceful protest in which a steamroller crushes brand new Microsoft merchandise. What would it take to make this a big event? 100 people with 100 products in an urban center could probably draw a crowd and a news team. Someone can get in front of the camera and explain that until Microsoft is sentenced for attacking the American economy (big issue), until Microsoft cancels its strategy of restricting home users' rights (big issue), they should be considered a(n) (PR buzzword here - "enemy combatant"? "traitor"? "evil influence"?) in America and the public must take action.

      Hell, at the very least, it would be fun. At best it might force the issue to the forefront and raise awareness among the regular citizen about what the future holds.

  • by Dolph ( 132127 ) on Thursday October 10, 2002 @08:30AM (#4422899)
    Regarding point 3 (that Microsoft would encourage development of systems such as Mandrake for the XBox, etc.), I don't think this would be that case.

    At the moment, Microsoft aren't trying to make money (and they're clearly not doing so anyway). Rather they're trying to wrest control of the market from Sony (and, to a lesser extent, Nitendo and other console-makers). Basically they're trying the gain a monopoly in the market (ala PCs).

    Once they have this control, _then_ they can begin to make money. They're sitting on enough cash to run as a loss-leader if they want, lose money at the outset, and then increase prices once people are tied in.

    The development of alternative systems for the XBox may increase the purchase of the consoles short-term, but long-term it opens up the device to others, destroying the whole idea of monopolizing (i.e. they can't increase the price of games development on the system, of all of the software houses can just roll out a version of the game for Mandrake on the XBox to exactly the same end-users).

    I think Microsoft will be no more keen to encourage 3rd party O/S development on the XBox than they are to encourage it in the PC market (and they're in a much better position to control it in the case of the XBox, as they control the hardware directly).
  • by Woodie ( 8139 ) on Thursday October 10, 2002 @08:31AM (#4422901) Homepage
    1) When a customer purchases an XBox (or any game system for that matter) are you intrinsically "signing" an end-user agreement in the purchase that makes modding the device illegal?

    Not particularly, no. Of course MS is under no obligation to support you, or your box if it breaks. Also don't necessarilly expect it to work with the Live service. In other words, you're free to break it, just don't dump on MS when it breaks or you can't use it with some new game, or their online service, they are well within their rights to exclude you if they are able.

    2) Could a non-profit org setup an effort to have mod chips produced and "distributed" at the cost of production w/o legal repurcussions? (i.e. would not making a profit on XBox's hardware mods protect you from their wrath?)

    Ahh, now here's where you get to the quasi legality. It's the production for profit of mod-chips that has dubious legal value. Ever wonder why you can't just walk into a store and buy a cable descrambler? You might be able to avoid them - but you have to show up in court, and pay the legal fees when they sue you.

    3) I understand the whole DRM aspect of mod'ing for playing copied games, BUT, what about legit gray-hacks like the Mandrake Linux XBox project and such?

    Microsoft is concerned about a larger picture. Of having the X-Box be an end unit in a network of units. They want to make sure that the network is somewhat secure. By supporting something like Linux on the X-Box, they help to compromise their plans.
  • by defile ( 1059 ) on Thursday October 10, 2002 @08:37AM (#4422935) Homepage Journal

    Plain vanilla copyright allows you to make modifications to software/hardware you've purchased. For example, you can purchase Windows NT Workstation and hex edit the bits that cripple Workstation so that it acts more like Server. You may not however redistribute it.

    Microsoft hates the idea because they want to sell Server, which is just a recompile (with a few other tools) for much much more. They claim that you are bound to the End User License Agreement when you open the shrink-wrap package you forfeit this and many other rights. Of course, they don't get your signature, and most people never have any idea of what this license says, and some would say it's plain illegal to force customers to waive so many rights just to use software, so it's kind of up in the air.

    I imagine this same EULA makes mod chips illegal. EULAs have not been sufficiently validated in court (cases seem to go both ways for a number of reasons), so you're rolling the dice by challenging it.

    However, IANAL.

    Greetz DJB, JS

  • by cardshark2001 ( 444650 ) on Thursday October 10, 2002 @08:41AM (#4422951)
    So rarely do I see a post where someone says "I am a lawyer specializing in X", where X is the subject in dispute on /.

    Much, much more often, I see endless "IANAL, but...". So, I have my own ask slashdot. What is the damn point of asking legal questions here? This is news for nerds, not news for barristers.

  • Because you can now run Linux on the Xbox, the mod-chip makers actually have a better chance in the legal squabbles.

    The mod-chip becomes a "reverse-engineering" product, with verifyable "non-infringing" use.

    I.e. since running Linux on an Xbox is perfectly legal, and you need a mod-chip to make it happen, the mod-chip manufacturer gets some legal protection, since it is not only used for "illegal" purposes.

    P.S. IANAL, please Fla^H^H^HCorrect me if I'm wrong.
  • by Woodie ( 8139 ) on Thursday October 10, 2002 @08:43AM (#4422964) Homepage
    Amazingly enough in the business world, foreign laws are often applied to US businesses. Wow - it's called reciprocity. Amazing.
  • Lik-Sang are using our OpenSource eCommerce solution called osCommerce [oscommerce.com] (shameless plug, I know).

    They were always one of our best refernces. Dammit.
  • If points 1 and 2 are illegal, then the Mandrake Linux XBox Project is in the same boat since that requires modification to the XBox's components to make it work (and a custom USB connection).

    No offense to anyone, but why the hell would anyone want to make the XBox run Linux? Just because you can? It doesn't help, it doesn't make it faster, all I can see that it does do is void your warranty for the sake of being l337.
  • by deRusett ( 612599 ) on Thursday October 10, 2002 @09:14AM (#4423158)
    I think MS is right is using the copyright laws to keep people from altering there hardware. YOU, as an individual can MAKE YOUR OWN Mod chip, BUT going out and buying one, even if it is not for profit is wrong, Its like the black box for cable to unscrable all the channels, there is really no legal use for this technology so it should not be permitted to be sold, The same goes with Mod Chips, there is said "grey area" like the linux project, But if one wishes to do the linux project one must fist make there own mod, I don't think telling people how to make there own mod should be illegal since it is just sharing of information, But making it for some one is/should be illegal. Thats my views on the matter, Most likly I am in the manority, since I also think downloading MP3s with P2P programs is illegal
    • I'm so sick of hearing this same ridiculous argument. You haven't thought it out at all. Why do you think people should have to create their own mod? Why should everyone have to invent things over and over and over again?

      Historically, someone invents something and people benefit from it. What you suggest is that everyone should invent everything that they use instead of just buying it from someone with expertise in its making. I don't know how to make cars or refrigerators or televisions either - and yet I have all of those!
  • by toddlg ( 319712 ) on Thursday October 10, 2002 @09:36AM (#4423295)

    License: Software in and with the Xbox console is licensed to you, not sold. You are licensed to use this software only with your Xbox and you may not reverse engineer it, except as permitted by applicable law notwithstanding this limitation.


    So does the DMCA permit you to reverse engineer it?
  • by pieterh ( 196118 ) on Thursday October 10, 2002 @10:11AM (#4423565) Homepage
    I've said this before and other posters have said the same. Of course MS is after Sony's market, but they are very patient. IMHO they believe that normal PCs, running normal Windows, is the best gaming platform.


    But PC software is always pirated. What they have to build is a DRM PC. And this is what they are making. The X-Box is a practice run.
    Their goal is a DRM PC. Cheap hardware, but impossible to run pirate software.


    The payoffs from a DRM PC are much higher than any game console. And I believe this is what MS is aiming at. Modding the X-Box just pushes this process along faster than it would go otherwise.

  • It wasn't *that* long ago when Ma Bell owned everyone's phone. Here [telcorock.com] is a link that in some ways sounds strangely familiar.

  • Why XBox (Score:5, Insightful)

    by Ektanoor ( 9949 ) on Thursday October 10, 2002 @10:49AM (#4423819) Journal
    Well I don't own an X-Box and don't plan to do it. Anyway, I understand why people want Linux on XBox. The problem has tow sides:

    1. It's a challenge. And Linux community is a world of challengers. The challenge may be making some noses to all-mighty M$. But the mainstream is probably following the old true challenge of getting one more piece of hardware and putting it to test. The versality and universality of Linux was made of these "Will Linux run on Sparc, PPC, Palmtop, S/390...? Even Sony's PlayStation couldn't run from this mood. And let's remember that some people referred to XBox + Linux in the way - "Sony PS-2 was first now it's time for XBox". And they probably are not hunting games, like some lamers speak here. Their objective is more the traditional "hack the thing".

    2. XBox goes much cheaper than the traditional computer. Some have already noted this... And if you wanna use it as a cheap server, why not?

    So these are probably tow vectors that move the crowd. What will happen if M$ cuts the trend. Well it will just loose customers, nothing else. Because if they are not for games then XBox will be nothing for them. And they may loose a large piece of the market. I don't think that Linux hackers can repeat Lego Mindstorms phenomena but there are parallels that force me to remind this story. A few years ago Lego launched is small and cute robot, planning to sell some 10000 units. However, the thing was not so popular among chidren as among hackers (I even have one). At first they didn't like this and tried to charge with all this copyright boolaboo. However when they saw sales jumping over 100000 (10x the expectations), they even started to make publicity to some of these guys.
  • Comment removed (Score:5, Interesting)

    by account_deleted ( 4530225 ) on Thursday October 10, 2002 @11:00AM (#4423883)
    Comment removed based on user account deletion
  • by ruiner13 ( 527499 ) on Thursday October 10, 2002 @11:27AM (#4424163) Homepage
    If we can't use the hardware like we want, wouldn't that imply that it's a rental or lease agreement? If I buy my house, I'm allowed to remove the security system if I don't like it. Sure it's there to protect me, but if I don't want it, I have that choice right? Now if i was renting a house, or leasing it, I could see not being able to modify it. The same goes for cars. I can remove the CPU chip from it and replace it with a "modded" one if I own the car, but they'd be pissy if I was leasing it.

    So, following on that idea, when M$ releases the X-box-2 (or whatever clever name their ad guys come up with) comes out, they'll let me trade in for the new model, right? Or if I accidentally, say, bash it with a sledgehammer, would they sue me? It's "their hardware", or so they imply by not letting us mod it.

    I dunno, I think they are crossing a lot of lines here that they shouldn't. I feel that once I buy something outright, I should be able to do whatever the heck I want with it. Tell bill gates that he can't remodel his house, or replace parts in his car and see how he feels.

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