England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		19 July 2004

Mr Justice Laddie:

1. In these proceedings there are three claimants. They are various members of the Sony Group of companies. Nothing turns on the differences between them. I shall refer to them together in the singular as Sony. There are seven defendants. The current application for summary judgment under Part 24 is directed at only one of them, the first defendant, Mr Gaynor David Ball.
2. Sony designs and manufactures games consoles. Each of these is a dedicated computer which is designed to enable the user to play computer games which are depicted on the screen of the television to which the console is connected. Sony also designs and manufactures, or has designed and manufactured on its behalf, computer games for playing on its consoles. Sony sells its consoles and the games for them on a very large scale in many countries of the world, including England. The most recent console is called the Play-Station 2 (the "PS2 console").
3. The games designed for use with PS2 consoles ("PS2 games") contain sophisticated computer programs together with other creative works such as drawings in digital form. It is not in dispute that both the programs and the other creative works are protected by copyright, the latter including artistic works. It is also not disputed that the relevant copyright is owned or controlled by one or other of the Sony companies. The copyright games are recorded onto CDs or DVDs. A user of a PS2 console has to insert one of these CDs or DVDs into it in order to play the game.
4. The PS2 consoles and games are designed to work together. More than that, they also contain a two part copy protection system. That is to say it is a copy protection system in which one part is embedded in the console and one part in the CD or DVD carrying the PS2 game. The two parts co-operate together rather like a lock and key enabling the PS2 game to be played on the type of PS2 console for which it is designed. The way this is achieved is described in the evidence of Mr David Carter served by Sony in support of this application. The description is not disputed. In essence the system works as follows. The CD or DVD contains, in digital form, the programs and other creative works needed to play the game. This material is capable of being copied by readily available CD and DVD copying equipment. However the authentic CDs and DVDs also have other codes embedded on the discs which are not recorded by standard copying equipment. An unauthorised copy of the CD or DVD made on such equipment will not contain copies of these other codes. The PS2 console (unlike standard copying equipment) can read the embedded codes and requires those codes to be present before it will allow the game on the CD or DVD to be played. This means that any copy of the PS2 game made on standard copying equipment will not be playable on the PS2 console.
5. In addition, PS2 consoles are designed to play through standard television systems. In England, the rest of Europe and a number of other countries, the signal system used for colour television transmission and reception is called PAL. A different system, called NTSC/UC, is used in the United States and a number of other countries. A third system, called NTSC/J is used in Japan. Each of Sony's PS2 consoles is designed to operate only in one of the three regions. Thus a PS2 console designed to be attached to European televisions will produce a signal which will be recognised by them but will not be recognised by televisions which can decode only NTSC/UC or NTSC/J signals. Furthermore Sony have designed their copy protection system in such a way that the embedded codes result in PS2 games designed, say, for Europe being playable only on PS2 consoles destined for the European market. Thus a European PS2 game will not be playable on an American or Japanese console. Japanese and American PS2 games will not be playable on a European console. By this means, parallel importation of PS2 games into Europe from abroad can be frustrated.
6. The defendants are involved in the design, manufacture, sale and installation of an electronic chip, called Messiah 2. It can be fitted into a PS2 console and works so as to trick the console into believing that the CD or DVD being played has the necessary embedded codes. By this means, the modified PS2 console can be made to play not only authentic PS2 games designed for the geographical area for which the console was intended, but also unauthorised copies and also games from either of the two regions which are "foreign" to the console.
7. Sony alleges that these activities constitute breaches of its rights contrary to the provisions of s 296 of the Copyright, Designs and Patents Act 1988 ("the 1988 Act") prior to 31 October 2003 and contrary to the provisions of s 296, 296ZA, ZD and ZF of that Act after it was amended on the latter date. In the present proceedings it has alleged breach of all those provisions. It argues that there is no real or substantial defence to any of its claims. Hence the current application.
8. Mr Ball has served a defence. It is now in a re-amended form. I do not understand Mr Ball's counsel, Mr Matthew Kime, to dispute that it is a complex document. Fortunately almost no reference was made to it during the course of the hearing. A number of possible defences were touched upon in Mr Kime's skeleton argument, though without always making it clear whether they were being run or not. In the end, I understood him to restrict his arguments to those raised during the course of oral submissions. I took it that he was not relying on any point which he did not address to me.
9. A convenient starting point is s 296 in its original form. This provides, so far as material, as follows:

"(1) This section applies where copies of a copyright work are issued to the public by or with the licence of the copyright owner, in an electronic form which is copy-protected.

(2) The person issuing the copies to the public has the same rights against a person who, knowing or having reason to believe that it will be used to make infringing copies –

(a) makes, imports, sells or lets for hire, offers or exposes for sale or hire, or advertises for sale or hire, any device or means specifically designed or adapted to circumvent the form of copy-protection employed, or

(b) publishes information intended to enable or assist persons to circumvent that form of copy-protection,

as a copyright owner has in respect of an infringement of copyright.

(3) Further, he has the same rights under section 99 or 100 (delivery up or seizure of certain articles) in relation to any such device or means which a person has in his possession, custody or control with the intention that it should be used to make infringing copies of copyright works, as a copyright owner has in relation to an infringing copy.

(4) References in this section to copy-protection include any device or means intended to prevent or restrict copying of a work …

(5) Expressions used in this section which are defined for the purposes of Part 1 of this Act (copyright) have the same meaning as in that Part."

10. There is no dispute that the security system adopted by Sony is a copy-protection means. It is also not in dispute that the Messiah2 chip is a device specifically designed or adapted to circumvent it. Furthermore there is no challenge to the allegation that Mr Ball imports, sells, offers or exposes for sale, and advertises for sale the Messiah2 chip and that he publishes information intended to enable or assist customers of the chip to circumvent the copy-protection. He knows full well what the chip is supposed to do. Indeed he sometimes assists customers to install them in their PS2 consoles. s 296(2)(a) and (b) are infringed unless there is some defence.
11. Mr Kime argues that there is no breach of Sony's rights because Mr Ball does not know or have reason to believe that the Messiah2 chip will be used to make "infringing copies". This is because s 296(5) imports all the definitions in Part 1 of the 1988 Act. The definition of an infringing copy is to be found in s 27. It reads, so far as material, as follows:

"(1) In this Part 'infringing copy', in relation to a copyright work, shall be construed in accordance with this section.

(2) An article is an infringing copy if its making constituted an infringement of the copyright in the work in question.

(3) An article is also an infringing copy if –

(a) it has been or is proposed to be imported into the United Kingdom, and

(b) its making in the United Kingdom would have constituted an infringement of the copyright in the work in question, …"

12. Mr Kime relies on this definition in two ways. First, he says that an infringing copy must be an "article". In other words it must be shown that, at the relevant time, Mr Ball knew or had reason to believe that the Messiah2 chip would be used to make articles which are infringing copies. He says that no such articles exist here. The Messiah2 chip is not used for making unauthorised copies of the CD or DVD on which the PS2 game is supplied by Sony. Nor is it argued that an imported authentic, but "foreign", PS2 game is either an infringing copy or made by use of the Messiah2 chip. If there is to be an infringing copy, it has to be created by the unlocked use of either (i) the unlicensed copy CD or DVD or (ii) the imported foreign game.
13. Sony alleges that use of either of these, enabled by the Messiah2 chip, inevitably results in infringement of Sony copyright and the creation of infringing copies. When the game is inserted into the console, the program and other creative works (or substantial parts of them) are read from the CD or DVD and copied into a Random Access Memory chip ("RAM") in the console. This is an act of reproduction. Mr Kime does not dispute that. Furthermore the RAM containing the reproduced digital data from the CD or DVD is an infringing copy. This is disputed by Mr Kime. He points to the fact that the copy of the copyright works in RAM only exist for a small fraction of a second. He says that that is far too ephemeral to turn the RAM into an infringing copy. He says that a copy which lasts for such a short period is not an article. It is a temporary creation produced during a dynamic act of copying. He draws my attention to the Obscene Publications Act 1959, the Factories Act 1937, the Supply Powers Act 1975, the Aviation Security Act 1982, the Sale of Food and Drugs Act 1875 and the Prison Act 1865 to illustrate different ways in which the word "article" has been used in legislation. He argues that the legislature only uses the word "article" in relation to what he calls "tangible substances". He says that a RAM chip containing a copy of the whole or a substantial part of Sony's copyright works is not such a tangible substance.
14. There can be no doubt that silicon chips are articles. Mr Kime does not suggest otherwise. Further he accepts that were the Sony material to be loaded into a Read Only Memory ("ROM"), that is to say a silicon chip designed to retain the loaded material substantially permanently, the chip so loaded would constitute an article. Again, if the copy were unlicensed it would be an infringing copy within the definition in the Act. He also accepts that if the same material were loaded into an Erasable Programmable Read Only Memory ("EPROM"), a type of silicon chip which can record digital data and will retain it until it is instructed to delete or override the data, it would constitute an article, even if it were decided to erase the material within a second or two. He says that the EPROM containing the copy would be a "tangible substance". The only exclusion covers the case when the digital material is copied into a RAM chip as happens in the PS2 console. Although the RAM chip itself is an article, he argues that the RAM containing the copy of Sony's digital data is too short lived to be regarded as tangible. Mr Kime is not able to indicate how short the life of the copy in the chip has to be before the chip containing the copy ceases to be an article. He argues that, wherever the border lies, in the case of the PS2 console, the life is too short to count.
15. I do not accept this argument. The silicon RAM chip is an article. When it contains the copy data, it is also an article. The fact that it did not contain the copy before and will not contain the copy later does not alter its physical characteristics while it does contain a copy. It is always an article but it is only an infringing article for a short time. There is nothing in the legislation which suggests that an object containing a copy of a copyright work, even if only ephemerally, is for that reason to be treated as not an article. On the contrary, the definition in s 27 points to the instant of making of the copy as crucial to the determination of whether or not it is an infringing article. An article becomes an infringing article because of the manner in which it is made. Whether it is an infringing article within the meaning of the legislation must be determined by reference to that moment. It matters not whether it is remains in that state, since retention as a copy is no part of the definition in the section.
16. This is also consistent with the provisions of s. 17 which, insofar as material, provides that:

"(2) Copying in relation to a literary, dramatic, musical or artistic work means reproducing the work in any material form. This includes storing the work in any medium by electronic means.

(6) Copying in relation to any description of work includes the making of copies which are transient or are incidental to some other use of the work."

17. Mr Kime accepts that the playing of an unauthorised copy of a PS2 game or a 'foreign' authentic game on a PS2 console involves copying a substantial part of the copyright work into RAM and, questions of licence aside, amounts to infringement pursuant to these provisions, but he argues that there is a difference in scope between the act of infringement and those articles which can be regarded as infringing copies. I can see no justification for such a difference. In my view the meaning of the term "infringing copy" takes colour from its context in the Act. Just as a transient act of copying amounts to infringement, so an article which transiently contains a copy is an infringing copy for the purpose of this legislation. Taken together, these two subsections appear to suggest that even making a transient copy of a work can constitute making a reproduction "in a material form". Thus RAM containing a copy of Sony's copyright work is a reproduction in material form. It would produce an unwarranted inconsistency in the Act were that material form not to be considered an article for the purpose of s 27. It follows that Mr Kime's argument on this point fails.
18. In view of this, it is not necessary to consider Sony's alternative argument that reproduction of the unlicensed or parallel-imported copy of the game, or the copyright artistic works within it, onto the screen of the television to which the PS2 console is connected also creates an infringing copy. Mr Mellor accepts that, were he to fail in respect of the copy in RAM, he must likewise fail in respect of the transient copy on the television screen. On the other hand Mr Kime accepts that, if Mr Mellor succeeds in relation to the transient copy in RAM, it makes no practical difference if there is the same or a better argument that a television screen bearing a visible but transient image is not an infringing copy. It follows that I do not need to determine whether the argument advanced in paragraphs 14.10 to 14-12 of The Modern Law of Copyright (3^rd Ed) is correct.
19. Mr Kime's second argument in relation to infringing copies runs as follows. Mr Ball claims that some 90% of Messiah2 chips are exported to foreign customers. For present purposes it should be assumed that this factual assertion is correct. Those chips will be installed in PS2 consoles abroad. Even if they are used, as they must be expected to be, for running unlicensed copies of PS2 games or authentic games which have been parallel imported from a country using a "foreign" colour television system, the copying into RAM occurs where the console is located, namely in the foreign country. Once again, Mr Kime points to the fact that under s 296 in its original form, Sony's rights are only infringed if Mr Ball knows or has reason to believe that the Messiah2 chip "will be used to make infringing copies". However, under s. 27(2) an article (in this case the transient copy in RAM) is only an infringing copy "if its making constituted an infringement of the copyright in the work in question" or, under s 27(3) if "the article" has been or is proposed to be imported into the United Kingdom. The reference to copyright in the former subsection must be a reference to United Kingdom copyright. Mr Mellor accepts that. In relation to the latter subsection it is not pleaded or suggested that any of the consoles to which exported Messiah2 chips are fitted will be imported back into this country. Mr Mellor accepts that also. Mr Kime argues that it must follow that the sale of the chips into the export market will not result in the creation of infringing copies. For that reason, the trader here who deals with chips which will or might end up abroad can not have the knowledge or belief that it "will be used to make infringing copies" as required by s 296(2).
20. Mr Mellor argues that if this construction is correct, it would be possible to run a coach and horses through these provisions. The merchant would be able to sit in one country and conduct an exclusively export trade. The result would be that companies in Sony's position would be obliged to sue customers in the country of importation. The merchant would be out of reach. Based on this, he suggests a construction which he admits involves a certain stretching of the statutory language. He argues that the legislative intent behind s 296(2) is to catch those who know or have reason to believe that the equipment in which they are trading is to be used to overcome copy-protection. As such, whether or not the use of the equipment causes infringement of copyright and, if so, where, is of little significance.
21. This construction would amount to ignoring the words "will be used to make infringing copies" in the subsection. Had the legislature wished to prohibit trade in devices which overcome copy-protection without regard to whether that assisted copyright infringement, it could easily have done so. In this section of the Act it did not. As will be seen below, it did in the amended provisions. For better or worse, s 296 in its original form made infringement of the right dependent upon the trader knowing or believing that the device will be used to make infringements of copyright. If Mr Mellor's construction were correct, the rights created by s 296 would be unrelated to copyright or, indeed, any other rights. For example it would catch the trader who made anti-copy-protection devices here for export to a country where its use is not proscribed. The sentiment underlying this section is that it should not be permissible to trade in devices which facilitate an objectionable practice, namely the avoidance of copy-protection leading to the manufacture of unlicensed and infringing copies. If the devices are to be sold in a country where manufacture of the unlicensed copies is not proscribed and therefore not objectionable, there is no compelling reason why the handling of them here should be proscribed. Mr Mellor draws my attention to the provisions of Council Directive 91/250/EEC (the "1991 Directive") and, in particular, Article 7(1)(c). However, the 1988 Act was passed before this came into force and does not purport to give effect to it. It seems to me that it is not permissible to stretch the meaning of the Act so as to accord with what Mr Mellor says is the intended scope of the 1991 Directive.
22. How does this impact on Sony's claim? It should be noticed that the section does not prohibit export of this kind of device. Therefore Sony's claim under this section is in respect of all the Messiah2 chips which are imported into this country and are exploited here whether by way of sale, offer or exposure for sale, advertising for sale and possession for commercial purposes. Insofar as Mr Ball has sold Messiah2 chips here, he has breached Sony's rights under the section. In respect of those products, Mr Ball knows or has reason to believe that they will be used to make infringing copies. On the other hand the position in relation to all the rest of his stock and his other commercial activities, is less straightforward. Assume that he has 100 chips and he advertises them for sale both to UK and Continental customers, for example on the internet. When he effects a sale to the former, he breaches the section. But what is the position before that? If the chips are suitable for sale to any customer in any country, it must follow that, prior to receipt of an order, Mr Ball does not know whether an individual chip will be sold and installed here or abroad. If that is so, then at the time of advertising he does not know or have reason to believe that any particular chip "will" be used to make infringing copies as required by s 296. All that he knows is that it might be so used. He does not breach Sony's rights. The same result may well apply to activities such as manufacturing and having in his possession for commercial purposes. In each case what will count is whether or not he knew that the chips he was dealing with were for supply to a UK or a foreign customer. For example, possession of stock which he knows is destined for the UK market would be a breach but possession of stock which is designed to service future customers in any market or only export markets would not. It follows that Mr Ball's liability in relation to these activities is dependent on the particular facts of each type of commercial activity in respect of which Sony complains. It is not a matter which can be resolved on a summary application.
23. I should add that, it is far from clear that, as a practical matter, the lacuna is as large as Mr Mellor suggests. First, as will be explained below, if the hole in Sony's rights exists it has been filled in large part by the amendments to the Act. Second, particularly in view of the terms of Directive 2001/29/EC ("the 2001 Directive"), it may well be that a trader who carries on business here and also exports to other Member States can be sued here not only for breaches of the 1988 Act but also for breaches of similar legislation in other Member States and pursuant to the provisions of the Brussels Convention. As it is, in this case Sony has not sought to expand the current action so as to bring in any claims for activities conducted by Mr Ball in any other State and, for that reason, this point has not been considered.
24. It follows from what is set out above that, save to the extent that Mr Ball has sold Messiah2 chips to UK customers, it cannot be determined whether there has been a breach of any rights owned by Sony under s 296 without an examination of the details of Mr Ball's commercial operations.
25. Sony also claims that Mr Ball has infringed the provisions of s 296(2)(b) in that he has published information intended to enable or assist persons to circumvent the copy-protection system. This is a reference to Mr Ball's publication of information relating to the installation of Messiah2 chips on internet websites. Such material is published both to British and foreign users of the chips. Insofar as it consists of a publication to the former, it amounts to a breach of this section of the Act. Mr Ball is not saved by the fact that the same publication also goes to non-British users in respect of who Mr Ball will not have the necessary guilty knowledge or reason to believe.
26. Thus far I have considered the provisions of s 296 in its original form. There were substantial amendments made for the purpose of implementing the harmonised law under the 2001 Directive. In effect the anti-copy-protection provisions are now split into two groups. New s 296 is restricted to anti-copy-protection devices which allow copyright computer programs to be copied. S 296A onwards contains similar, but not identical, provisions to counter anti-copy-protection devices designed to facilitate the copying of other types of copyright work. Since, as mentioned above, all PS2 games incorporate both computer programs and other copyright works, Sony alleges that both sets of provisions are breached. I shall consider the new s 296 first. This provides, so far as material, as follows:

"(1) This section applies where –

(a) a technical device has been applied to a computer program; and

(b) a person … knowing or having reason to believe that it will be used to make infringing copies –

(i) manufactures for sale or hire, imports, distributes, sells or lets for hire, offers or exposes for sale or hire, advertises for sale or hire or has in his possession for commercial purposes any means the sole intended purpose of which is to facilitate the unauthorised removal or circumvention of the technical device; or

(ii) publishes information intended to enable or assist persons to remove or circumvent the technical device. …

(6) In this section references to a technical device in relation to a computer program are to any device intended to prevent or restrict acts that are not authorised by the copyright owner of that computer program and are restricted by copyright."

27. It is accepted that these provisions seek to achieve much the same result as was achieved by the section prior to its amendment as concerns the protection of computer programs. The same points on "infringing copy" and relating to commercial activities servicing the non-UK market apply to this section. Mr Mellor again suggests that this would render the new version of s 296 incompatible with the 1991 Directive which it is designed to implement. Even were that true, the wording used in the section is clear and I do not see how I could construe it in any other way.
28. Mr Kime advances two additional arguments. First he points to the requirement that the "sole intended purpose" of the offending means must be to facilitate unauthorised removal or circumvention of the copy-protection device. He argues that that is not the sole intended purpose of the Messiah2 chip. He says it was designed, or arguably designed, to enable any necessary back-up of the original games to be played and, for example, to enable playing of United Kingdom brought original PAL games on non-European PS2 consoles imported into the United Kingdom.
29. This argument could only succeed if either of these classes of activities were authorised by Sony. However they are not. They are the types of activities which the copy-protection devices are designed to frustrate. Take the use of back-ups first. This would only work as a legitimate purpose for the Messiah2 chip if a purchaser of a PS2 game CD or DVD was entitled to make and play a back up of it and, for that reason, such use could be treated as authorised. Back ups were common when computer programs and data were distributed on fragile magnetic floppy discs. When that was so there was a substantial risk of the disc becoming unusable either because it was mechanically distorted or because it was wiped clean by unintended exposure to a magnetic field. To avoid the inconvenience and delay involved in going back to the supplier of a program and asking for a replacement disc, operating manuals provided by the supplier normally suggested that the purchaser make a back-up to keep in a safe location. The purpose was, as its name suggests, to have a spare version of the program or data in case of loss or damage to the original. The question of back-up copies of programs is now covered by s 50A which includes the following:

"(1) It is not an infringement of copyright for a lawful user of a copy of a computer program to make any back up copy of it which it is necessary for him to have for the purposes of his lawful use."

30. Mr Mellor says that Mr Ball does not begin to raise an arguable defence under this provision. One of the advantages of CDs and DVDs is that they are robust and cannot be wiped clean. There is no necessity, as required by s 50A, to make back ups. Mr Ball has not pleaded anything which could justify him saying that it is necessary. Furthermore here it is quite clear that no such necessity could arise. Sony says that it makes replacement CDs or DVDs available to users in the unlikely event that theirs are damaged or destroyed. Since there is no necessity to make a back up, there is no justification for having one. Playing such a disc is unauthorised and the resultant creation of transitory copies of the program (or other data) in RAM is unauthorised. The copy protection system implemented by Sony is designed to prevent this type of activity. Even assuming that the Messiah2 chip was designed, in part at least, to facilitate the use of "back up" copies of Sony games, there is no authorisation from Sony for such use (or indeed the making of such copies in the first place). It follows that this purpose of the chip amounts to an unauthorised circumvention of the Sony copy-protection system and falls within the section.
31. The other point raised by Mr Kime is as follows. Each of the PS2 games intended for the United Kingdom market has marked on it the words "for home use only". This is said to give the user a licence to use in the countries in which they were issued, i.e. in the United Kingdom. It follows that it is permissible to run games purchased in the United Kingdom on PS2 consoles imported from a non-PAL country. Such use must be treated as authorised by Sony. The Messiah2 chip, so it is argued, is designed to allow owners of non-PAL consoles to operate under this licence. Even if one accepts that this is one of the purposes for which the Messiah2 chip was designed and marketed – and I will not venture an opinion as to the likelihood of the court doing so - in my view this argument is hopeless. The label on each PAL PS2 game not only says that it is for home use only but also includes the following words:

"This software is only compatible with the PlayStation®2 computer entertainment system displaying the PAL logo".

32. In other words the purchaser of the PAL game is told in clear language that it is not designed to be played on a non-PAL machine. There is no support for the suggestion of licence or authorisation. Once again the copy protection system adopted by Sony is designed to prevent just such use of a non-PAL game on a PAL console. In this respect as well the Messiah2 chip is designed to facilitate unauthorised removal or circumvention of the copy protection system. None of this provides a defence to Mr Ball.
33. In summary, Sony's copy protection system is designed to prevent all uses of copied PS2 game CDs and DVDs on PS2 consoles and all uses of non-PAL games on PAL consoles (and vice versa), The Messiah2 chips' sole purpose is to circumvent this. Such circumvention is not authorised expressly or impliedly by Sony, nor is it suggested that Sony must be deemed to have authorised it.
34. I should add that s. 296(2)(b) is also breached for the same reasons as are set out above in relation to the section before amendment.
35. Sony also raises a claim under s. 296ZA. This provides a cause of action against the users of anti-copy-protection devices. It provides, insofar as material;

"(1) This section applies where –

(a) effective technological measures have been applied to a copyright work other than a computer program; and

(b) a person (B) does anything which circumvents those measures knowing, or with reasonable grounds to know, that he is pursuing that objective.

36. To the extent that Mr Ball has himself installed Messiah2 chips and used the console so modified, there appears to be no defence to this claim.
37. I now turn to consider the provisions of s 296ZD. This provides, insofar as material, as follows:

"(1) This section applies where –

(a) effective technological measures have been applied to a copyright work other than a computer program; and

(b) a person (C) manufactures, imports, distributes, sells or lets for hire, offers or exposes for sale or hire, advertises for sale or hire, or has in his possession for commercial purposes any device, product or component, or provides services which –

(i) are promoted, advertised or marketed for the purpose of the circumvention of, or

(ii) have only a limited commercially significant purpose or use other than to circumvent, or

(iii) are primarily designed, produced, adapted or performed for the purpose of enabling or facilitating the circumvention of,

those measures."

38. S 296ZF contains the following definitions:

"(1) In sections 296ZA to 296ZE, "technological measures" are any technology, device or component which is designed, in the normal course of its operation, to protect a copyright work other than a computer program.

(2) Such measures are "effective" if the use of the work is controlled by the copyright owner through –

(a) an access control or protection process such as encryption, scrambling or other transformation of the work, or

(b) a copy control mechanism,

which achieves the intended protection.

(3) In this section, reference to –

(a) protection of a work is to the prevention or restriction of acts that are not authorised by the copyright owner of that work and are restricted by copyright; and

(b) use of a work does not extend to any use of the work that is outside the scope of the acts restricted by copyright."

39. It should be noticed that this creates a tort of strict liability. Mr Ball cannot escape from liability by showing that he did not know or have reason to believe the Messiah2 chips would be used to make infringing copies of Sony copyright works. On the other hand the definitions show that the main purpose of the copy protection system must be to protect copyright work so as to prevent infringements of copyright. However there are important differences between these provisions and those under s 296. Here, the reference to protecting copyright and, by implication, the suppression of infringement is all restricted to the definition of "technological measures". In other words, to determine whether the Sony system is one protected by these provisions, it is necessary to determine whether it is designed in the normal course of its operation to prevent unauthorised use of Sony's copyright work in a way which would amount to an infringement of copyright. It is clear from what has been set out above, that the Sony system is so designed and, for that reason, is a technological measure within the scope of these provisions.
40. The wording of s 296ZD does not define breaches of the copyright owner's rights in terms of causing or facilitating infringements of copyright. Once a protected technological measure exists, it is breach of the provisions, for example, to advertise for sale any device, product, component or service which is primarily designed, produced, adapted or performed for the purpose of enabling or facilitating the circumvention of the technological measure. However, it seems to me that there is no reason why the section should be read as covering circumvention outside the jurisdiction. Thus, if the Messiah2 device is "primarily" designed to enable or facilitate the circumvention of the Sony system, that circumvention to take place within the jurisdiction, there is a breach of Sony's rights. This is a fact dependent matter which cannot be resolved on this summary application.
41. However, the sub-sub-sections to s 296ZD(1)(b) give rise to independent types of breaches. In my view, s 296ZD(1)(b)(i) is particularly significant. It is an infringement of the section, for example, to have in one's possession for commercial purposes a product which is promoted, advertised or marketed for the purpose of the circumvention of the technological measure. Although Mr Ball asserts that a significant proportion of his Messiah2 chips are exported and installed abroad, there is no doubt that he distributes, offers, exposes or advertises for sale and has in possession for commercial purposes these products and he promotes and advertises them for customers in this country as well as customers abroad. The fact that he advertises his stock to both groups of customers, does not alter the fact that he promotes and advertises all of it to customers in this country. That is a breach of s 296ZD.
42. Finally I should mention one other point which Mr Kime directs at all these provisions both before and after amendment, but particularly the latter. He says that the mischief at which they were directed was the circumvention of copy protection systems which were "applied" to a computer program or other copyright material. Here, he says, the copy protection system is applied by Sony primarily to the hardware. For that reason it is not the sort of system which should be protected by this legislation.
43. It seems to me that this point fails for four reasons. First, in relation to s 296 before amendment, there is no reference or restriction to the protection being applied to the computer program or the other copyright material. All that is required is that the work be issued to the public in an electronic form "which is copy-protected". Copy-protection is defined as including any "means intended to prevent or restrict copying of a work". Even were the Sony copy protection system located primarily or only on the hardware, it would fall within these provisions. Second, even after amendment, there is nothing in the wording of the sections which requires of the copy protection system to be on the software rather than in the hardware. Thus, the new version of s 296 refers to a "technical device" which has been "applied to a computer program" and a "technical device" is defined as referring to "any device intended to prevent or restrict acts that are not authorised by the copyright owner of that computer program and are restricted by copyright". There is nothing in this which limits where the device should be. The protection device is applied to the program either by being put on the program or on the apparatus which reads it, or both. Similarly s 296ZD refers to a "technological measure" which has been "applied to a copyright work other than a computer program". In this case "technological measure" is defined, as noted above, as meaning "any technology, device or component which is designed, in the normal course of its operation, to protect a copyright work other than a computer program." This, if anything, is broader than the definition of "technical device" but, even were it not, there is nothing in it which requires the technology be only on the software. Third, it appears to me that there is nothing to support the suggestion that Mr Kime's approach was what was intended by the legislature. On the contrary, I can see no reason why the legislature should have been concerned where the copy protection system resides. What counts is that there is copy protection, not where it is. Fourth, even if Mr Kime were correct, the copy protection is located, in part at least, on the software as explained above. In my view there is nothing to suggest that it must be primarily or solely on the hardware rather than the software. Most copy protection systems work on a lock and key basis. This inevitably means that part of the system is on the software and part of it is on the hardware which is designed to read it. These are just the sort of systems which the legislature clearly intended to cover. For example the systems covered in s 296ZF include ones using encryption and scrambling. In each case it is the program which is encrypted or scrambled and, normally, it is the hardware which contains the facility to decrypt or unscramble. I can see no justification for restricting the scope of these provisions as Mr Kime suggests.