Sony sucks

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PLAINTIFF'S EX PARTE MOTION FOR TEMPORARY RESTRAINING ORDER; ORDER OF IMPOUNDMENT
Case No. ____________________________.
KILPATRICK TOWNSEND & STOCKTON LLP
JAMES G. GILLILAND, JR. (State Bar No. 107988)
TIMOTHY R. CAHN (State Bar No. 162136)
MEHRNAZ BOROUMAND SMITH (State Bar No. 197271)
HOLLY GAUDREAU (State Bar No. 209114)
RYAN BRICKER (State Bar No. 269100)
Two Embarcadero Center, 8th Floor
San Francisco, California 94111
Telephone: (415) 576-0200
Facsimile: (415) 576-0300
Email: jgilliland@kilpatricktownsend.com
tcahn@kilpatricktownsend.com
mboroumand@kilpatricktownsend.com
hgaudreau@kilpatricktownsend.com
rbricker@kilpatricktownsend.com
Attorneys for Plaintiff
SONY COMPUTER ENTERTAINMENT AMERICA LLC
UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF CALIFORNIA
SAN FRANCISCO DIVISION
SONY COMPUTER ENTERTAINMENT
AMERICA LLC, a Delaware limited liability
company,
Plaintiff,
v.
GEORGE HOTZ; HECTOR MARTIN
CANTERO; SVEN PETER; and DOES 1 through
100,
Defendants.
Case No._________________
PLAINTIFF'S EX PARTE MOTION FOR
TEMPORARY RESTRAINING ORDER,
ORDER TO SHOW CAUSE RE:
PRELIMINARY INJUNCTION, AND
ORDER OF IMPOUNDMENT;
MEMORANDUM OF POINTS AND
AUTHORITIES IN SUPPORT
Date: January 12, 2011
Time: 9:00 a.m., or as soon as can be
heard
Courtroom: 3, 17th Floor
Judge: Hon. Richard Seeborg
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TABLE OF CONTENTS
Page
I. INTRODUCTION .............................................................................................................1
II. BACKGROUND...............................................................................................................3
A. SCEA’s PlayStation®3 Computer Entertainment System And Its
Technological Protection Measures ......................................................................3
B. SCEA’s Copyrights And Copyright Licenses.........................................................5
C. Defendants’ Illegal Activities..................................................................................5
1. The FAIL0VERFLOW Defendants’ Unlawful Conduct and
Circumvention Devices...............................................................................6
2. George Hotz’s Unlawful Conduct and Circumvention
Devices.......................................................................................................7
III. A TEMPORARY RESTRAINING ORDER IS NECESSARY TO
PREVENT VIOLATIONS OF THE DMCA AND THE CFAA...........................................10
A. SCEA Has Satisfied The Standards For Granting A Temporary
Restraining Order And A Preliminary Injunction..................................................10
B. The DMCA Authorizes Courts To Enjoin Persons From
Trafficking In Circumvention Devices, And The CFAA
Authorizes Courts To Enjoin Persons From Accessing
Computers Without Authorization, Obtaining Proprietary
Information And Trafficking In Such Information .................................................11
C. SCEA Has Demonstrated An Indisputable Likelihood of Success
On The Merits Of Its DMCA Claim ......................................................................12
1. Traffics In..................................................................................................14
2. A Technology or Part Thereof ..................................................................14
3. Primarily Designed ...................................................................................14
4. Circumvention Device...............................................................................15
5. Effective TPMs .........................................................................................15
6. Copyrighted Work.....................................................................................15
D. SCEA Has Demonstrated An Indisputable Likelihood of Success
On The Merits Of Its Claim Under The Computer Fraud and
Abuse Act, 18 U.S.C. § 1030, et seq...................................................................16
1. 18 U.S.C. § 1030(a)(2)(C) – Confidential Information On
Computer..................................................................................................16
2. 18 U.S.C. § 1030(a)(4) – Intent To Defraud And Obtain
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Value ........................................................................................................17
3. 18 U.S.C. § 1030(a)(5)(A) – Knowing Transmission of
Code.........................................................................................................18
4. 18 U.S.C. § 1030(a)(5)(B) and (C) – Intentional and
Reckless Damage And Loss ....................................................................18
5. 18 U.S.C. § 1030(a)(6)(A) – Trafficking in Password ...............................19
6. 18 U.S.C. § 1030(a)(7)(B) – Intent to Extort .............................................19
E. Absent Injunctive Relief, SCEA Will Suffer Irreparable Injury And
The Balance Of Hardships Strongly Favors SCEA .............................................19
F. The Public Interest Strongly Favors Granting SCEA Injunctive
Relief...................................................................................................................22
G. SCEA Has Complied With The Procedural Requirements For
Issuance Of A TRO And Order To Show Cause Re: Preliminary
Injunction.............................................................................................................23
IV. AN ORDER OF IMPOUNDMENT OF THE CIRCUMVENTION
DEVICES IS WARRANTED...........................................................................................24
V. CONCLUSION...............................................................................................................25
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TABLE OF AUTHORITIES
Page(s)
CASES
321 Studios v. Metro Goldwyn Major Studios, Inc.,
307 F. Supp. 2d 1085 (N.D. Cal. 2004) ........................................................ 12, 13, 16
A&M Records, Inc. v. Napster, Inc.,
239 F. 3d 1004 (9th Cir. 2001) ................................................................................. 20
America Online, Inc. v. LCGM, Inc.,
46 F. Supp. 2d 444 (E.D. Va. 1998) .........................................................................17
Apple Inc. v. Psystar Corp.,
673 F. Supp. 2d 943 (N.D. Cal. 2009)......................................................................20
Black & Decker (US), Inc. v. Smith,
568 F. Supp. 2d 929 (W.D. Tenn. 2008) .................................................................. 18
Concrete Mach. Co. v. Classic Lawn Ornaments, Inc.,
843 F.2d 600 (1st Cir. 1988) .................................................................................... 22
Connecticut Gen. Life Ins. Co. v. New Images of Beverly Hills,
321 F.3d 878 (9th Cir. 2003) .................................................................................... 23
Coxcom, Inc. v. Chaffee,
536 F.3d 101 (1st Cir. 2008) .................................................................................... 13
Craigslist, Inc. v. Naturemarket, Inc.,
694 F. Supp. 2d 1039 (N.D. Cal. 2010)....................................................................17
Dollcraft Industries, Ltd. v. Well-Made Toy Mfg. Co.,
479 F. Supp. 1105 (E.D.N.Y 1978) .......................................................................... 25
Duchess Music Corp. v. Stern,
458 F. 2d 1305 (9th Cir. 1972), cert. denied, 409 U.S. 847 (1972) .......................... 25
eBay v. Digital Point Solutions,
608 F. Supp. 2d 1156 (N.D. Cal. 2009) .............................................................. 17, 18
Jacobsen v. Katzer,
609 F. Supp. 2d. 925 (N.D. Cal. 2009).....................................................................20
Macrovision v. Sima Products Corp.,
2006 U.S. Dist. LEXIS 22106, 2006 WL 1063284 (S.D.N.Y. 2006).................... 14, 20
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PLAINTIFF'S EX PARTE MOTION FOR TEMPORARY RESTRAINING ORDER; ORDER OF IMPOUNDMENT
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MDY Industries v. Blizzard Entertainment, Inc.,
2010 WL 5141269, 2010 U.S. App. LEXIS 25424, 2010 WL 5141269, No. 09-
15932 Slip. Op. (9th Cir., Dec. 14, 2010) ................................................................. 14
MGM Studios, Inc. v. Grokster,
Ltd., 518 F. Supp. 2d 1197 (C.D. Cal. 2007) ............................................................ 20
Mitchell Int’l, Inc. v. Fraticelli,
2007 U.S. Dist. LEXIS 86787, 2007 WL 4197583 (D. P.R. 2007) ............................ 25
Mortensen v. Bresnan Commun.,
2010 U.S. Dist. LEXIS 13419, 2010 WL 5140454 (D. Mont. 2010) .......................... 17
Nintendo of America, Inc. v. Bung Enterprises, Ltd.,
1999 U.S. Dist. LEXIS 23588 at *36, 1999 WL 34975007, *13 .......................... 20, 21
Nintendo of America Inc. v. Chan,
2009 U.S. Dist. LEXIS 66624, 2009 WL 2190186 (C.D. Cal. 2009) ......................... 13
Nintendo of America, Inc. v. Elcon Indus., Inc.,
564 F. Supp. 937 (E.D. Mich. 1982)......................................................................... 24
Realnetworks, Inc. v. DVD Copy Control Ass’n.,
641 F. Supp. 2d 913 (N.D. Cal. 2009).......................................................... 11, 13, 16
Realnetworks, Inc. v. DVD Copy Control Ass’n, Inc.,555
U.S. 7, 641 F. Supp. 2d 913 (N.D. Cal. 2009) .......................................................... 20
Rebis v. Universal CAD Consultants, Inc.,
1998 U.S. Dist. LEXIS 12366, 1998 WL 470475 (N.D. Cal. 1998) ........................... 24
Rent-A-Center, Inc. v. Canyon Television & Appliance Rental, Inc.,
944 F.2d 597 (9th Cir. 2001) .................................................................................... 20
Sega Enters. v. MAPHIA,
857 F. Supp. 679 (N.D. Cal. 1994)...........................................................................24
Shugard Storage Centers, Inc. v. Safeguard Self Storage, Inc.,
119 F. Supp. 2d 1121 (W.D. Wa. 2000) ...................................................................17
Sierra On-Line, Inc. v. Phoenix Software, Inc.,
739 F.2d 1415 (9th Cir. 1984) .................................................................................. 10
Sony Computer Entertainment America v. Divineo, Inc.,
457 F. Supp. 2d 957 (N.D. Cal 2006)............................................................. 2, 13, 16
Sony Computer Entertainment America v. Zoomba et al.,
2010 U.S. Dist. Lexis 113228, 2010 WL 4512835 (N.D. Cal. October 13, 2010) ....... 2
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State of Alaska v. Native Village of Venetie,
856 F.2d 1384 (9th Cir. 1988) .................................................................................. 10
SuccessFactors, Inc. v. Softscape, Inc.,
544 F. Supp. 2d 975 (N.D. Cal. 2008)......................................................................11
Sun Microsystems, Inc. v. Microsoft Corp.,
21 F. Supp. 2d 1109 (N.D. Cal. 1998)......................................................................11
Textile Unlimited, Inc. v. A. BMH & Co.,
240 F.3d 781 (9th Cir. 2001) .................................................................................... 10
Ticketmaster L.L.C. v. RMG Techs., Inc.,
507 F. Supp. 2d 1096 (C.D. Cal. 2007)....................................................................23
Universal City Studios, Inc. v. Reimerdes,
82 F. Supp. 2d 211 (S.D.N.Y. 2000) .................................................................. 14, 19
Universal City Studios v. Reimerdes,
111 F. Supp. 2d 294 (S.D.N.Y. 2000) ......................................................................16
Winter v. Natural Res. Def. Council, Inc.,
555 U.S. 7, 129 S.Ct. 365 (2008) ....................................................................... 10, 20
WPOW, Inc. v. MRLJ Enters.,
584 F. Supp. 132 (D.D.C. 1984)............................................................................... 24
Yamate USA Corp. v. Sugerman,
1991 U.S. Dist. LEXIS 20701, 1991 WL 274854 (D.N.J. 1991)................................ 24
Yash Raj Films (USA), Inc. v. Sidhu,
2010 U.S. Dist. LEXIS 25988, 2010 WL 1032792 (E.D. Cal. 2010) ......................... 11
YourNetDating, LLC v. Mitchell,
88 F. Supp. 2d 870 (N.D. Ill. 2000)..................................................................... 11, 23
STATUTES
17 U.S.C. §1201(a)(1) ................................................................................................... 13
17 U.S.C. § 1201(a)(1)(A).............................................................................................. 12
17 U.S.C. §§ 1201(a)(2) and 1201(b)(1)........................................................................ 12
17 U.S.C. § 1201 et seq. ........................................................................................... 2, 12
17 U.S.C. § 1203(b)(1) .................................................................................................. 11
18 U.S.C. §1030 (a)....................................................................................................... 16
18 U.S.C. § 1030(a)(2)(C) ............................................................................................. 16
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PLAINTIFF'S EX PARTE MOTION FOR TEMPORARY RESTRAINING ORDER; ORDER OF IMPOUNDMENT
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18 U.S.C. § 1030(a)(4) ............................................................................................ 17, 18
18 U.S.C. § 1030(a)(5)(A).............................................................................................. 18
18 U.S.C. § 1030(a)(5)(B) and (C)................................................................................. 18
18 U.S.C. § 1030(a)(6)(A).............................................................................................. 19
18 U.S.C. § 1030(a)(7)(B).............................................................................................. 19
18 U.S.C. § 1030 et seq. ........................................................................................... 2, 16
18 U.S.C. § 1030 (g)...................................................................................................... 11
Federal Rule of Civil Procedure 65............................................................................ 1, 23
Local Rule 7-10 ...............................................................................................................1
Local Rule 65-1 ......................................................................................................... 1, 23
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PLAINTIFF'S EX PARTE MOTION FOR TEMPORARY RESTRAINING ORDER; ORDER OF IMPOUNDMENT
CASE NO. ______________________
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I. INTRODUCTION
Defendants George Hotz, “Bushing,” Hector Cantero, Sven Peter and “Segher”
(collectively, “Defendants”) are computer hackers.1 Working individually and in concert with
one another, Defendants recently bypassed effective technological protection measures
(“TPMs”) employed by plaintiff Sony Computer Entertainment America LLP (“SCEA”) in its
proprietary PlayStation®3 computer entertainment system (“PS3 System”). Through the
Internet, Defendants are distributing software, tools and instructions (collectively,
“Circumvention Devices”) that circumvent the TPMs in the PS3 System and facilitate the
counterfeiting of video games. Already, pirated video games are being packaged and
distributed with these circumvention devices. Declaration of Ryan T. Bricker In Support of Ex
Parte Motion for Temporary Restraining Order And Order To Show Cause Re Preliminary
Injunction; Order for Impoundment (“Bricker Decl.”) ¶2, Exh. A. Pursuant to Federal Rule of
Civil Procedure 65 and Local Rules 65-1 and 7-10, SCEA moves ex parte to put an
immediate halt to the ongoing distribution of these illegal Circumvention Devices and avoid
irreparable harm to SCEA and to other video game software developers stemming from
video game piracy.
Defendants’ Circumvention Devices allow users to circumvent multiple TPMs in the
PS3 System – including access control, encryption and digital signature protections – to
enable use or playing of illegal copies of PlayStation®3 video games on the PS3 System.
1 Defendant Hotz, against whom this motion initially is being brought, has established
considerable contacts with the District in connection with his unlawful conduct. Upon
information and belief, Defendant George Hotz is bound by the “Playstation Network Terms
of Service and User Agreement” (the “PSN User Agreement”), ¶14 of which states in relevant
part that “both parties submit to personal jurisdiction in California and further agree that any
dispute arising from or relating to this Agreement shall be brought in a court within San
Mateo County, California.” Further, upon information and believe, in connection with his
unlawful conduct, Hotz has utilized an account via PayPal, a company located in San Jose,
California, and therefore derives a financial benefit through his unlawful conduct in this
district. Bricker Decl. at ¶31, Exh. DD. Mr. Hotz is also unlawfully demonstrating and
distributing a circumvention device or component thereof through YouTube, a widely used
and interactive website located in Mountain View, California. Id. ¶25, Exh. W. Mr. Hotz has
also discussed his unlawful conduct through Twitter, a widely used and interactive website
located in San Francisco, California.
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PLAINTIFF'S EX PARTE MOTION FOR TEMPORARY RESTRAINING ORDER; ORDER OF IMPOUNDMENT
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These Circumvention Devices violate federal copyright law, including the Digital Millennium
Copyright Act (“DMCA”), 17 U.S.C. § 1201 et seq. This Court previously has recognized the
illegality of similar devices and enjoined their sale and distribution. See, e.g., Sony Computer
Entertainment America v. Zoomba et al., 2010 U.S. Dist. Lexis 113228, 2010 WL 4512835
(N.D. Cal. October 13, 2010); Sony Computer Entertainment America v. Divineo, Inc., 457 F.
Supp. 2d 957 (N.D. Cal. 2006). Defendants’ intentional hacking of the PS3 System without
authorization, and their obtaining and transmission of SCEA’s proprietary information
(including but not limited to digital signature keys) also violates the Computer Fraud and
Abuse Act (“CFAA”), 18 U.S.C. § 1030 et seq. If Defendants are not immediately enjoined
from accessing the PS3 System, circumventing its TPMs and trafficking in illegal
Circumvention Devices, Defendants will continue to do so, thereby facilitating and
proliferating the unlawful copying of PlayStation3 games and causing immediate and
irreparable harm to SCEA and others.
Indeed, the Defendants’ enabling of software piracy through their activities over the
last several days has been widely reported. Yesterday, for example, an article trumpeted
that “PS3 Software Piracy Begins as First Game is Played on an Unmodded Playstation 3.”
Bricker Decl. at ¶2, Exh. A. The article proceeds to explain:
That didn’t take long, did it? The rootkey crack that was
uncovered by Geohot [i.e., Defendant George Hotz] and other
modders has the door wide open for rampant PlayStation 3
piracy, and the first pirated game on an unmodded PS3 has been
done.
See also, Bricker Decl. at ¶30, Exh. CC. This motion seeks to close the door for rampant
piracy that Defendants have illegally pried open in violation of federal and California law.
Though SCEA need only show “likely” success to obtain a Temporary Restraining
Order (“TRO”), SCEA’s evidence demonstrates a compelling case of DMCA violations and
computer fraud and abuse warranting preliminary relief and an order for impoundment.
Accordingly, SCEA respectfully requests that the Court issue: (1) a TRO immediately barring
Defendant Hotz from (a) circumventing the TPMs in the PS3 System; (b) offering to the
public, marketing, distributing, or trafficking in the Circumvention Devices; and (c) accessing
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PLAINTIFF'S EX PARTE MOTION FOR TEMPORARY RESTRAINING ORDER; ORDER OF IMPOUNDMENT
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SCEA’s protected PS3 System, obtaining and transmitting SCEA’s proprietary information or
code, and impairing the confidentiality of information obtained from the PS3 System until a
preliminary injunction can be issued; (2) an Order for Impoundment; and (3) an Order to
Show Cause why a preliminary injunction should not issue enjoining Defendants from
continued circumvention, distribution of the Circumvention Devices and accessing and
transmitting SCEA’s proprietary information.
II. BACKGROUND
A. SCEA’s PlayStation®3 Computer Entertainment System And Its
Technological Protection Measures
SCEA markets and sells the PS3 System, a computer entertainment system featuring
hardware and firmware designed for the playing of video games. Declaration of Riley R.
Russell In Support of Ex Parte Motion for Temporary Restraining Order And Order To Show
Cause Re Preliminary Injunction; Order for Impoundment (“Russell Decl.”), ¶3, Exh. A. The
PS3 System is a highly sophisticated apparatus that usually connects to a television or
monitor for use in playing video game software simulating three-dimensional action. Id. The
PS3 System also features PlayStation Network (“PSN”), an entertainment network that
supports multiplayer online gameplay, access to the PlayStation Store to purchase video
games as well as rent or buy feature films and PS3 System connectivity. Id.
The PS3 System has enjoyed wide success throughout the United States and the
world. Over 41 million PS3 Systems have been sold worldwide since the product release in
November 2006. Russell Decl. at ¶4. There are hundreds of different video game titles
currently available for the PS3 System in the United States, which typically sell for retail
prices between $40.00 and $70.00. Id.
All genuine PS3 Systems are manufactured with technological protection measures
that effectively control access to the PS3 System and prevent unlicensed or copied software
from playing on the PS3 System. See Declaration of Bret Mogilefsky In Support of Ex Parte
Motion for Temporary Restraining Order And Order To Show Cause Re Preliminary
Injunction; Order for Impoundment (“Mogilefsky Decl.”), ¶4. The PS3 System is designed to
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run multiple levels of authorized, encrypted code in one or more sequences. Id. at ¶5. Each
level features TPMs, which control access, encrypt and decrypt code, and authenticate
signatures to enable access to the files within the code. Id.
One purpose of the PS3 System’s TPMs is to prevent users from playing illegally
copied, pirated games. Id. at ¶14. To that end, every file authorized to run on the PS3
System contains an authentic digital signature. Id. at ¶9. SCEA generates each digital
signature using a pair of electronic keys (“Keys”). Id. at ¶10. The PS3 System verifies each
signature using one of those Keys, which is encrypted and embedded in the system. Id. The
other Key is held by SCEA; it is not distributed and cannot be located anywhere in the PS3
System’s code or hardware, or the code of any authorized video game. Id. The PS3 System
will not execute a file unless that file contains an authentic digital signature. Id.
Unauthorized or unlicensed video game discs (such as those burned from genuine game
discs) do not have an authorized signature code. Id. at ¶11. Accordingly, a normallyfunctioning
PS3 System will not run those pirated video games.
The PS3 System also utilizes access control and encryption TPMs. Id. at ¶8. Those
TPMs prevent, restrict or otherwise limit access to certain sections of the PS3 System
software and hardware. Id. at ¶5. As a result, the TPMs ensure that the PS3 System
functions in a safe and reliable manner. Id. at ¶13. They also protect the encrypted
firmware, encrypted digital signature Keys and other encrypted Keys that are stored within
the PS3 System. Id. at ¶10. Because the PS3 System and its code are protected by these
TPMs, users can neither access nor read the signatures or the Keys, and therefore cannot
use those elements to gain access to the System to run a pirated video game. Id. at ¶13.
Using the types of TPMs discussed above, the PS3 System allows only the operation
of legitimate, authorized and approved software that is licensed for distribution in the region
or geographical territory of the console’s sale. Id. at ¶6. By taking these precautions, SCEA
has been able to protect its exclusive rights to copy, sell, distribute and manufacture video
games. In addition, SCEA has been able to protect its substantial investment – and the
investment of third-party videogame companies – in the development, creation, and
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distribution of the PS3 System and compatible video games.
B. SCEA’s Copyrights And Copyright Licenses
SCEA develops and publishes its own interactive entertainment software video games
for the PS3 System. Russell Decl. at ¶6. Id. SCEA has invested and continues to invest
substantial time, effort and expense in the design, development, testing, manufacturing and
marketing of its video games. Id. at ¶4. Those games are highly creative and SCEA has
obtained copyright registrations to protect them. Id. at ¶7. For example, SCEA owns valid
copyright registration for the following video game software: Ratchet & Clank Future: Tools
of Destruction (Copyright No. PA 1-616-055); Resistance 2 (Copyright No. PA 1-619-506),
and Uncharted Drake’s Fortune (Copyright No. PA 1-611-286). Id., Exh. A.
All PlayStation3 video games are programmed with computer code, referred to herein
as PlayStation3 Programmer Tools (“PS3 Programmer Tools”), that authenticate authorized
video game software and facilitate interaction with the central processing unit and
microprocessors in the PS3 System. Mogilefsky Decl. at ¶3. A video game whose program
does not incorporate the PS3 Programmer Tools cannot be played on the PS3 System. Id.
The PS3 Programmer Tools are also incorporated within the PS3 System firmware. Id.
SCEA is the licensee of the registered copyright for the PS3 Programmer Tools (Copyright
No. TX0007208564) and is authorized to sublicense its rights to use, copy and distribute the
Tools to third party video game developers and publishers. Russell Decl., Exh. B.
SCEA also offers licenses to third parties to develop interactive entertainment
software products for the PS3 System. Russell Decl. at ¶6. These licensees are authorized
to use proprietary PlayStation®3 technology to develop video game software for the PS3
System and to publish and distribute their video games. Id. SCEA receives royalties on
each PlayStation®3 video game manufactured pursuant to its licenses with third party
publishers. Id.
C. Defendants’ Illegal Activities
Since the release of the PS3 System in 2006, software hackers have attempted to
write code to run unauthorized software on SCEA’s gaming system. Mogilefsky Decl. at ¶15.
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Until a few days ago, the efforts of these hackers were largely thwarted by the TPMs that
secure the various levels of the PS3 System. Id. at ¶15. In late December 2010, a hacking
group called FAIL0VERFLOW discovered a way to access certain (but not all) levels of the
PS3 System by circumventing the corresponding TPMs. Id. at ¶16; Bricker Decl. at ¶5, Exh.
D. At that point, hackers were given the tools to run unauthorized and pirated software on
the PS3 System. Mogilefsky Decl. at ¶¶16-18. Building on FAIL0VERFLOW’s work,
Defendant Hotz unlawfully gained access to a critical level of the PS3 System by
circumventing the corresponding TPMs. Id. at ¶26. In early January 2011, Hotz publicly
distributed the circumvention devices necessary to access that level, providing them to the
public via the Internet and releasing software code that will allow users to run unauthorized or
pirated software on the PS3 System. Id. at ¶¶20-25. Unless this Court enjoins Defendants’
unlawful conduct, hackers will succeed in running and distributing Circumvention Devices
that run pirated software on the PS3 System.
1. The FAIL0VERFLOW Defendants’ Unlawful Conduct and
Circumvention Devices
Defendants Bushing, Hector Cantero, Sven Peter and Segher formed
FAIL0VERFLOW, a hacking group, with the purpose of circumventing the technological
protection measures in the PS3 System and accessing and obtaining SCEA’s proprietary
code from within the System. Bricker Decl. at ¶¶3-4, Exhs. B-C.2 On December 29, 2010,
the FAIL0VERFLOW Defendants appeared at the Chaos Communication Conference (the
“Chaos Conference”), a hacker event in Berlin. Id. at ¶4, Exh. C. Boasting that they had
circumvented TPMs for certain levels of the PS3 System, the FAIL0VERFLOW Defendants
broadcast detailed instructions for their circumvention method (the “FAIL0VERFLOW
Instructional Materials”) and promised to divulge information and proprietary code they
obtained by unlawfully accessing the PS3 System. Id. at ¶5, Exh. D. Hours after the Chaos
2 Each member of FAIL0VERFLOW has a history of circumventing TPMs and touting their
exploits. Bricker Decl. at ¶3, Exh. B; ¶¶6-7, Exhs. E-F; ¶¶10-19, Exhs. I-R; ¶28-29, Exhs.
AA-BB.
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Conference, the FAIL0VERFLOW Defendants’ Instructional Materials were published on the
Internet. Id. Within two days, the group began publishing the code, software tools and
scrambled or encrypted keys derived from their circumvention of the TPMs on Twitter and
other websites. Id. at ¶¶6-7, Exhs. E-F; Mogilefsky Decl. at ¶18.
The FAIL0VERFLOW Defendants’ Instructional Materials and code, software tools
and keys constitute Circumvention Devices. The Instructional Materials enable others to gain
access to certain protected levels in the PS3 System. Mogilefsky Decl. ¶17. Armed with the
code, software tools and keys released by the FAIL0VERFLOW Defendants, individuals can
now decrypt, avoid, bypass, deactivate or impair TPMs that protect fundamental levels of the
PS3 System, and impermissibly run unauthorized software at those levels. Id. at ¶¶17-18.
Indeed, other hackers have used the information and tools released by the FAIL0VERFLOW
Defendants to circumvent the TPMs of the PS3 System and publish and traffick in
circumvention devices. Id. at 17; Bricker Decl. at ¶8, Exh. G. This is exactly what the
FAIL0VERFLOW Defendants wanted when, prior to releasing their Circumvention Devices,
they posted the following message on Twitter:
We’ll release tools … someone else can take over. The fun part
is done ;)
Bricker Decl. at ¶3, Exh. B.
The FAIL0VERFLOW Defendants intentionally circumvented SCEA’s TPMs, accessed
the PS3 System and trafficked in Circumvention Devices and SCEA’s proprietary information,
with full knowledge that their unlawful conduct would irreparably harm SCEA. Indeed, five
days prior to appearing at the Chaos Conference, Bushing echoed a fellow hacker’s
comment anticipating this irreparable harm: “Last chance to sell any Sony stock you may
have.” Id. at ¶18, Exh. Q.
2. George Hotz’s Unlawful Conduct and Circumvention Devices
Defendant Hotz is a well-known hacker who has gained notoriety for circumventing the
technological protection measures in a number of sophisticated software and hardware
systems. Id. at ¶20, Exh. S. Building on the FAIL0VERFLOW Defendants’ Circumvention
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Devices, Hotz circumvented certain other TPMs in the PS3 System, intentionally accessed
the PS3 System without authorization, and misappropriated critical SCEA Keys (referred to
hereinafter as the “Metldr Keys” or the “Root Keys”):
forgot to thank fail0verflow. . . . They had several keys but not the
root key, I used their discoveries to find the [] root key.”
Id. at ¶21, Exh. T.3 The Root Keys, or “Metldr Keys,” that Hotz wrongfully compromised are
part of a TPM in the PS3 System, and are necessary to authenticate code that runs on a
critical level of that System. Mogilefsky Decl. ¶12. With access to this particular level, one
can control crucial functions and operations of the PS3 System and execute code that will
enable pirated video games to run on the PS3 System. Id.
Knowing that the “Metldr Keys” can defeat TPMs in the PS3 System, Hotz began
using these proprietary Keys as a component of a Circumvention Device that applies SCEA
signatures to any file, effectively “tricking” the PS3 System into running unauthorized
programs. Mogilefsky Decl. ¶23. On January 2, 2011, Hotz published the Metldr Keys on his
website under the banner “keys open doors.” Bricker Decl. at ¶23, Ex. V. By doing so, Hotz
purposefully compromised the confidentiality of those Keys and invited other software pirates
to incorporate the Keys into their own circumvention technology. Id. (quoting Hotz January
2nd post: “use this info wisely”). Hotz’s distribution of the Metldr Keys enabled software
pirates to create and run unauthorized copies of video games. Mogilefsky Decl. ¶20.
Shortly thereafter, Hotz began incorporating the Metldr Keys into other Circumvention
Devices and software packages that he or other hackers had built. Mogilefsky Decl. ¶23.
Many of these Devices and packages – including “dePKG Firmware Decrypter” – were of
limited use without SCEA’s proprietary Keys. Armed with some of SCEA’s Keys, however,
3 Hotz further recognized the FAIL0VERFLOW Defendants’ contribution to his circumvention
method, stating “props to fail0verflow.” Bricker Decl. ¶22, Exh. U. The FAIL0VERFLOW
Defendants confirmed their collaboration with Hotz by posting the following statement on
their Twitter page: “We discovered how to get the keys. . . . Geohot exploited metldr, then
used our trick to get its keys.” Id. at ¶3, Exh. B.
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Hotz was able to use his dePKG Firmware Decrypter to decrypt a version of SCEA’s
firmware,4 modify the firmware to remove and/or bypass some of its TPMs, and add a digital
signature using the compromised Metldr Keys. Mogilefsky Decl. ¶22. On January 7, 2011,
Hotz posted a video to YouTube demonstrating his circumvention of the PS3 System’s
access controls and execution of this unauthorized, modified version of SCEA’s firmware.
Bricker Decl. at ¶24, Exh. W. He referred to this process as “jailbreaking,” and happily
explained that the “jailbroken” firmware allowed him to run other unauthorized programs on
the PS3 System. Id.
One day later, in furtherance of his unlawful conduct, Hotz published on his website
the “3.55 Firmware Jailbreak” code, a circumvention device or component thereof that
disables, avoids, bypasses, removes, deactivates and/or impairs a critical TPM in the PS3
System. Id. at ¶22, Exh. U; ¶25, Exh. X; ¶26, Exh. Y; Mogilefsky Decl. ¶24. The 3.55
Firmware Jailbreak code allows users to install and run unauthorized software – including
pirated video games – in circumvention of the TPMs on the PS3 System. Mogilefsky Decl.
¶24. Indeed, in the last few days, people have already started copying, playing and
trafficking in pirated copies of video games using the 3.55 Firmware Jailbreak. Bricker Decl.
at ¶2, Exh. A.
Most recently, on January 9, 2011, Hotz published “Signing Tools” that enable
encryption and signing of unauthorized content, thereby permitting that content to run in
circumvention of the TPMs on the PS3 System. Id. at ¶22, Exh. U; Mogilefsky Decl. at ¶25.
These Signing Tools work together with the 3.55 Firmware Jailbreak to allow piracy.
Mogilefsky Decl. at ¶25.
By distributing the Circumvention Devices discussed herein, Hotz has caused
irreparable injury and damage to SCEA. Russell Decl. at ¶¶9-10. Recognizing the harmful
impact of his unlawful conduct on SCEA and attempting to leverage his circumvention
4 Firmware is a fixed program or data structure that internally controls various electronic
devices, such as the PS3. Mogilefsky Decl. at ¶2.
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activities, Hotz addressed SCEA when he posted the Metldr Keys. Bricker Decl. at ¶22, Exh.
U. In an attempt to obtain employment, he wrote: “if you want your next console to be
secure, get in touch with me.” Id. Furthermore, in a January 6, 2011 interview with the BBC,
Hotz acknowledged that his conduct will catalyze the piracy of video games: “I hate that it
enables piracy.” Id. at ¶27, Exh. Z. Despite feigning disturbance resulting from the
proliferation of piracy, Hotz then went on to release 3.55 Firmware JailBreak and the Signing
Tool – both components of Circumvention Devices that are designed to facilitate videogame
piracy. Id. at ¶22, Exh. U. Even the FAIL0VERFLOW Defendants, when interviewed,
admitted that they expect Mr. Hotz’s conduct “to make piracy easier without accomplishing
anything intrinsically useful.” Id. at ¶28, Exh. AA.5
III. A TEMPORARY RESTRAINING ORDER IS NECESSARY TO PREVENT
VIOLATIONS OF THE DMCA AND THE CFAA
A. SCEA Has Satisfied The Standards For Granting A Temporary Restraining
Order And A Preliminary Injunction
The standards in the Ninth Circuit for obtaining a temporary restraining order are
identical to those for obtaining a preliminary injunction. State of Alaska v. Native Village of
Venetie, 856 F.2d 1384, 1389 (9th Cir. 1988). SCEA is entitled to preliminary injunctive relief
if it shows (1) a likelihood of success on the merits; (2) a likelihood of irreparable harm
absent a preliminary injunction; (3) that the balance of equities tips in favor of issuing an
injunction; and (4) that an injunction is in the public interest. Winter v. Natural Res. Def.
Council, Inc., 555 U.S. 7, 129 S.Ct. 365, 374 (2008). A preliminary injunction is a way to
preserve the status quo and prevent irreparable loss of rights before judgment. See, e.g.,
Textile Unlimited, Inc. v. A. BMH & Co., 240 F.3d 781, 786 (9th Cir. 2001); Sierra On-Line,
5 In a public on-line forum, FAIL0VERFLOW Defendant, Cantero, said “We didn’t release
keys due fear of legal repercussions, but we told people exactly how to calculate them, and
they did.” Bricker Decl. at ¶28, Exh. AA. In an earlier post, Defendant Cantero said, “we
used these techniques to obtain encryption, public, and private keys [for several fundamental
levels of the PS 3 System]. With these keys we could decrypt and sign our own firmware. …
The metldr key does break the console’s security even more (especially with respect to
newer, future firmwares – and thus also piracy of newer games) ….” Id.
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Inc. v. Phoenix Software, Inc., 739 F.2d 1415, 1422 (9th Cir. 1984). Indeed, “public policy
favors injunctive relief to remedy the infringement of intellectual property rights.” Yash Raj
Films (USA), Inc. v. Sidhu, 2010 U.S. Dist. LEXIS 25988, *17-18, 2010 WL 1032792, *7 (E.D.
Cal. 2010). Courts may also consider whether the granting of a preliminary injunction favors
the public interest. Sun Microsystems, Inc. v. Microsoft Corp., 21 F. Supp. 2d 1109, 1118
(N.D. Cal. 1998). Both a temporary restraining order and preliminary injunction are clearly
proper here.
B. The DMCA Authorizes Courts To Enjoin Persons From Trafficking In
Circumvention Devices, And The CFAA Authorizes Courts To Enjoin
Persons From Accessing Computers Without Authorization, Obtaining
Proprietary Information And Trafficking In Such Information
SCEA has brought suit against Defendants based, inter alia, on their violations of the
Digital Millennium Copyright Act (“DMCA”).6 The DMCA specifically authorizes the granting
of "temporary and permanent injunctions" to restrain violations of the DMCA,
including circumvention of technological protection measures and trafficking in circumvention
devices. 17 U.S.C. § 1203(b)(1). Likewise, the CFAA provides “injunctive or other equitable
relief.” 18 U.S.C. § 1030 (g). Courts, including this one, have issued temporary and
preliminary injunctive relief to restrain violations of the DMCA in situations like the threat
posed by Defendants here. See, e.g., Realnetworks, Inc. v. DVD Copy Control Ass’n., 641
F. Supp. 2d 913 (N.D. Cal. 2009) (granting TRO and preliminary injunction based on
defendants’ sale of circumvention devices that make copies of copyrighted content);
SuccessFactors, Inc. v. Softscape, Inc., 544 F. Supp. 2d 975, 981 (N.D. Cal. 2008) (granting
preliminary injunction under the CFAA to cease unauthorized access of computer and use of
confidential information); YourNetDating, LLC v. Mitchell, 88 F. Supp. 2d 870, 872 (N.D. Ill.
2000) (granting TRO against computer hacker under the CFAA).
6 In its Complaint, SCEA has also alleged claims for contributory copyright infringement
under the Copyright Act, the California Comprehensive Computer Data Access and Fraud
Act, breach of contract, tortious interference with contractual relations, trespass and common
law misappropriation. SCEA is basing its request for TRO only on its DMCA and CFAA
claims.
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C. SCEA Has Demonstrated An Indisputable Likelihood of Success On T7he
Merits Of Its DMCA Claim
The DMCA was enacted to prohibit, inter alia, circumvention of effective technological
protection measures and the trafficking of devices that circumvent the technological
measures used by copyright owners to restrict access to their copyrighted works. See 17
U.S.C. § 1201 et seq. Liability under the DMCA for circumventing a technological protection
measure is established by showing that: (1) plaintiff’s TPMs, in the ordinary course of
operation, prevent access to a work protected under the Copyright Act; and (2) defendant
has circumvented those TPMs. See 17 U.S.C. § 1201(a)(1)(A); 321 Studios v. Metro
Goldwyn Major Studios, Inc., 307 F. Supp. 2d 1085, 1095 (N.D. Cal. 2004). Liability under
the DMCA for trafficking in circumvention devices is established by showing that: (1)
plaintiff’s technological mechanism, in the ordinary course of operation, prevents access to a
copyrighted work (or protects a right of the copyright owner in the work); and (2) defendant
traffics in devices, or components thereof, primarily designed to circumvent such protections.
See 17 U.S.C. §§ 1201(a)(2) and 1201(b)(1); 321 Studios, 307 F. Supp. 2d at 1097-99.
SCEA easily satisfies the elements to prove that Defendants have both circumvented the
TPMs that prevent access to SCEA’s copyrighted works and trafficked in circumvention
devices or components thereof.
Defendants have circumvented technological protection measures that effectively
control access to the PS3 System, the works therein, and other copyrighted SCEA works and
the in violation of the DMCA, insofar as Defendants decrypted, avoided, bypassed, removed,
deactivated, or impaired those technological measures. Indeed, both the FAIL0VERFLOW
Defendants and George Hotz circumvented multiple encryption and access controls in order
to retrieve and compromise various Keys used by SCEA to prevent individuals from running
unauthorized code on the PS3 System. Bricker Decl. at ¶28, Exh. AA (Canton, a member of
FAIL0VERFLOW, noting that the group “deserve[s] a little more credit than we're getting for
[Hotz’s 3.55 Firmware Jailbreak]” because “he used our key recovery attack verbatim”);
Bricker Decl. at ¶5, Exh. D (explaining the “recovery attack” used by the FAIL0VERFLOW
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Defendants and Defendants Hotz in detail). In addition to their circumvention of such
encryption and access controls, the Defendants misappropriated SCEA’s proprietary Keys
and used those Keys without permission in order to avoid SCEA’s effective technological
measures. Bricker Decl. at ¶21, Exh. T (announcing Hotz’s disclosure of Metldr Keys). By
circumventing those effective TPMs, all Defendants have clearly violated 17 U.S.C.
§1201(a)(1). Such conduct constitutes circumvention, as this Court has recognized several
times. For example, in Realnetworks, Inc. v. DVD Copy Control Ass'n, 641 F. Supp. 2d 913,
934 (N.D. Cal. 2009), this Court held that the defendant had circumvented technological
measures that effectively controlled access to copyrighted DVD content, where the defendant
had a limited license to use some of the Plaintiff’s “decryption keys,” but used those keys
outside of the scope of its license to gain unlawful access to the DVD content and create a
permanent copy. Moreover, this Court concluded that the defendant in Realnetworks
circumvented technological measures each time it accessed the content that it copied during
its first instance of circumvention. Id. See also 321 Studios v. Metro Goldwyn Mayer
Studios, Inc., 307 F. Supp. 2d 1085 (N.D. Cal. 2004) (holding that decryption software
violated the DMCA by avoiding and bypassing an encoding scheme used by DVD producers,
because although the software used authorized “decryption keys,” it did so without the
permission of the content owner).
The law is also clear that trafficking in Circumvention Devices is illegal under the
DMCA in that their primary purpose is to bypass a technological measure designed to protect
copyrighted works. For example, in Sony Computer Entertainment America v. Divineo, Inc.,
457 F. Supp. 2d 957 (N.D. Cal. 2006), this Court granted summary adjudication and
injunctive relief based on defendants trafficking in similar “mod chip” circumvention devices in
violation of the DMCA. See also 321 Studios, 307 F. Supp. 2d at 1085 (granting summary
judgment and injunction in favor of copyright holders on DMCA claim); Nintendo of America
Inc. v. Chan, 2009 U.S. Dist. LEXIS 66624, 2009 WL 2190186 (C.D. Cal. 2009) (granting
preliminary injunction based on defendant’s marketing and trafficking of “game copiers.”);
Coxcom, Inc. v. Chaffee, 536 F.3d 101 (1st Cir. 2008) (granting TRO and preliminary
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injunction based on defendants’ sales of digital cable filters in violation of the DMCA);
Macrovision v. Sima Products Corp., 2006 U.S. Dist. LEXIS 22106, 2006 WL 1063284
(S.D.N.Y. 2006) (granting preliminary injunction based on defendants’ sale of “video
enhancer” products that circumvented plaintiff’s DVD copy protection technology); Universal
City Studios, Inc. v. Reimerdes, 82 F. Supp. 2d 211, 225-26 (S.D.N.Y. 2000) (granting
preliminary injunction on DMCA claim).
The Ninth Circuit in MDY Industries clarified this standard, explaining that the test
requires that the defendant (1) traffics in (2) a technology or part thereof (3) that is primarily
designed, produced, or marketed for, or has limited commercially significant use other than
(4) circumventing a technological measure (5) that effectively controls access (6) to a
copyrighted work. MDY Industries v. Blizzard Entertainment, Inc., 2010 WL 5141269 at *18,
2010 U.S. App. LEXIS 25424 at *28-29, 2010 WL 5141269 at *18, No. 09-15932 Slip. Op.
(9th Cir., Dec. 14, 2010).
1. Traffics In
The Defendants are trafficking, offering, and distributing their Circumvention Devices
through various internet channels, including their websites and Twitter accounts. Bricker
Decl. at ¶¶5-7, Exhs. D-F; ¶22, Exh. U.
2. A Technology or Part Thereof
These Circumvention Devices comprise computer code that circumvents the TPMs in
the PS3 System, thereby allowing users to install and run unsigned programs, and play
pirated video games. Mogilefsky Decl. at ¶¶18-24.
3. Primarily Designed
The FAIL0VERFLOW team and George Hotz designed these illegal Devices with the
sole purpose and function to circumvent the TPMs that effectively prevent access to the PS3
System and related copyrighted works. Id. at ¶ 27. Indeed, the Defendants themselves
advertise and promote their own circumvention, and distribute those Circumvention Devices
with a clear message inducing others to use the Devices in the same manner. See, e.g.,
Bricker Decl. at ¶24, Exh. W (video showing Defendant Hotz using his “3.55 Firmware
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Jailbreak” to circumvent TPMs in the PS3 System); Id. at ¶22, Exh. U (offering links to
download the “3.55 Firmware Jailbreak,” the “Signing Tools).
4. Circumvention Device
The Circumvention Devices distributed by Defendants enable users to circumvent or
disable the TPMs in the PS3 System: Hotz’s Metldr Keys, dePKG Firmware Decrypter, 3.55
Firmware Jailbreak code and Signing Tool, individually, or in combination, decrypt, bypass,
disable, or impair certain TPMs within the PS3 System and enable users to run pirated video
games; indeed, some of these Circumvention Devices have even been packaged together to
facilitate piracy. Id. at ¶30, Exh. CC (“First PS3 Backup Working on Geohot CFW 3.55,”
providing step-by-step instructions for using the 3.55 Firmware Jailbreak code and Signing
Tool to pirate video games). Further, the FAIL0VERFLOW Defendants’ code, software tools
and keys together with their Instruction Materials enable users to bypass TPMs to allow
unauthorized software to run. Mogilefsky Decl. at ¶18; supra, Section I (C)(1). Moreover,
The combination of Defendants’ various Circumvention Devices and/or components thereof
have no commercially significant purpose other than to circumvent SCEA’s technological
protection measures. The Defendants designed the methods, programs, and code described
herein, and offered to the public, trafficked in, and/or distributed those Circumvention Devices
with the express intent of allowing others to circumvent SCEA’s technological protection
measures so that they can impermissibly run unauthorized code on the PS3 System.
5. Effective TPMs
As noted above, the TPMs in place on the PS3 System prevent users from playing
unlicensed or copied video game discs and installing unlicensed software, such as Hotz’s
3.55 Firmware Jailbreak. Mogilefsky Decl. ¶ 7.
6. Copyrighted Work
If these TPMs are circumvented or disabled, users can access the copyrighted PS3
Programmer Tools and can copy borrowed or rented video game discs, and play those
copied video games later without inserting the authentic, licensed disc. Id. at ¶14.
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In sum, SCEA has shown an unquestionable likelihood of success on the merits of its
DMCA claim.7
D. SCEA Has Demonstrated An Indisputable Likelihood of Success On The
Merits Of Its Claim Under The Computer Fraud and Abuse Act, 18 U.S.C. §
1030, et seq.
Defendants have committed numerous offenses under the Computer Fraud and
Abuse Act (CFAA”), 18 U.S.C. §1030 (a), including: circumventing the TPMs in the PS3
System, intentional unauthorized accessing of the PS3 System firmware, obtaining SCEA’s
proprietary information or code and distributing it, and impairing the confidentiality of
information obtained from the PS3 System.
1. 18 U.S.C. § 1030(a)(2)(C) – Confidential Information On Computer
To prove a violation under 18 U.S.C. § 1030(a)(2)(C), SCEA must show that
Defendants: (1) intentionally accessed a protected computer used for interstate commerce or
communication; (2) without authorization or by exceeding authorized access to the protected
computer; and (3) thereby obtained information from the protected computer. SCEA has
established these elements.
First, the PS3 System consists of a “protected computer” because it is used in
interstate commerce (e.g., the Internet.) Second, without SCEA’s authorization, Defendants
intentionally accessed certain levels of the PS3 Systems by circumventing SCEA’s TPMs in
the PS3 Systems. Mogilefsky Decl. at ¶¶16-22. Defendants’ access to such levels in the
PS3 Systems is not authorized; to the contrary, the PlayStation Network Terms of Service
and User Agreement (“PSN User Agreement”) prohibits the circumvention of security
7 “Fair use” is no defense even if there were a conceivable noninfringing use for these
devices. As this Court explained in Divineo, “downstream customers’ lawful or fair use of
circumvention devices does not relieve [defendant] from liability for trafficking in such devices
under the DMCA.” 457 F. Supp. at 965. See, e.g., Realnetworks, 641 F. Supp. 2d at 942
(any limited “fair use” exception does not apply to manufacturers or traffickers of the
circumvention devices); 321 Studios, 307 F. Supp. 2d at 1097 (“the downstream uses of the
software by the customers of [defendant], whether legal or illegal, are not relevant to
determining whether [defendant] itself is violating the statute.”); Universal City Studios v.
Reimerdes, 111 F. Supp. 2d 294, 318 (S.D.N.Y. 2000).
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features in the PS3 System. Complaint at ¶15, Exh. A.8 See, e.g., Craigslist, Inc. v.
Naturemarket, Inc., 694 F. Supp. 2d 1039, 1052 (N.D. Cal. 2010) (violation of user
agreement established “without authorization” requirement of the CFAA); eBay v. Digital
Point Solutions, 608 F. Supp. 2d 1156, 1164 (N.D. Cal. 2009) (“access and use beyond
those set forth in a user agreement constitute unauthorized use under the CFAA.”); America
Online, Inc. v. LCGM, Inc., 46 F. Supp. 2d 444, 450 (E.D. Va. 1998) (“Defendants’ actions
violated [the] Terms of Service, and as such was unauthorized.”) Finally, as a result of their
unauthorized access, Defendants succeeded in discovering – then obtaining – SCEA’s
proprietary information, including SCEA’s Keys that digitally sign code to run on certain
secure levels of the PS3 System. Mogilefsky Decl. at ¶¶16-20.9
2. 18 U.S.C. § 1030(a)(4) – Intent To Defraud And Obtain Value
To prevail on a claim under § 1030(a)(4), SCEA must show that Defendants: (1)
knowingly and with intent to defraud accessed a protected computer without authorization, or
exceeded authorized access; and (2) by means of such conduct furthered the intended fraud
and obtained anything of value. SCEA has satisfied these elements.
As discussed above, Defendants accessed the PS3 Systems without authorization.
Because Defendants intentionally circumvented the TPMs in the PS3 Systems, their acts
were knowing and with intent to defraud, and they furthered the intended fraud and obtained
something of tremendous value – SCEA’s proprietary information, including the Keys to the
PS3 Systems. Bricker Decl. at ¶¶3, 22, Exhs. B, U. Indeed, “fraud” in this context means
simply “wrongdoing and not proof of the common law elements of fraud.” Shurgard Storage
8 In its Complaint, SCEA has also brought claims for breach of the PSN User Agreement and
tortious interference with contractual relations.
9 SCEA has standing to assert claims under the CFAA because Defendants’ conduct has
caused loss to SCEA during any one year period aggregating far more than $5,000 in value,
and because Defendants’ conduct has caused damage affecting 10 or more PS3 Systems
during any one year period. See Mortensen v. Bresnan Commun., 2010 U.S. Dist. LEXIS
13419, at *20-21, 2010 WL 5140454, at *7 (D. Mont. 2010) (installation and distribution of
Internet cookies onto multiple computers was sufficient to allege damages in excess of
$5,000)
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Centers, Inc. v. Safeguard Self Storage, Inc., 119 F. Supp. 2d 1121, 1126 (W.D. Wa. 2000);
see also eBay, Inc. v. Digital Point Solutions, Inc., 608 F. Supp. 2d 1156, 1164 (N.D. Cal.
2009) (“’fraud’” under the CFAA only requires a showing of unlawful access.”). Accordingly,
Defendants have violated §1030 (a) (4) of the CFAA.
3. 18 U.S.C. § 1030(a)(5)(A) – Knowing Transmission of Code
Under 18 U.S.C. § 1030(a)(5)(A), SCEA will also likely prevail on its claim that
Defendants “knowingly caused the transmission of a program, information, code or
command, and as a result of such conduct, intentionally caused damage without
authorization, to a protected computer.” Defendants knowingly transmitted SCEA’s
proprietary information or code via the Internet, which has greatly damaged SCEA and
threatens to cause immeasurable damage to the PS3 System. Bricker Decl. at ¶¶6-7, 21,
Exhs. E-F, T.
4. 18 U.S.C. § 1030(a)(5)(B) and (C) – Intentional and Reckless Damage
And Loss
To prove a violation under 18 U.S.C. § 1030(a)(5)(B) and (C), SCEA must show that
Defendants “intentionally accessed a protected computer without authorization, and, as a
result of such conduct, recklessly causes damage” or “recklessly causes damage or loss.”
As established above, Defendants intentionally accessed the PS3 System without SCEA’s
authorization. There is no doubt that Defendants’ unlawful access of the PS3 Systems has
caused and will continue to cause great damage and loss to SCEA unless enjoined. Russell
Decl. at ¶10. By accessing the PS3 Systems, Defendants have impaired the TPMs in the
PS3 Systems, which protect fundamental levels of the PS3 System, and they are illegally
running unauthorized software at those levels. Mogilefsky Decl. at ¶¶23-24. See Black &
Decker (US), Inc. v. Smith, 568 F. Supp. 2d 929, 937 (W.D. Tenn. 2008) (“intentionally
rendering a computer system less secure should be considered ‘damage” even when no
data, program or system is damaged or destroyed.”). Unless Defendants are enjoined,
SCEA will continue to sustain great loss, including lost video game software sales for SCEA
and other game publishers, as a result of Defendants’ unauthorized access to the PS3
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System. Russell Decl. at ¶¶9-10.
5. 18 U.S.C. § 1030(a)(6)(A) – Trafficking in Password
Under 18 U.S.C. § 1030(a)(6)(A), SCEA will likely prevail on its claim that Defendants
“knowingly and with intent to defraud traffics in any password or similar information through
which a computer may be accessed without authorization if such trafficking affects interstate
or foreign commerce.” As discussed above, Defendants have trafficked in Circumvention
Devices and SCEA’s proprietary information, including the Keys which effectively provide the
“password” to access the most secure areas of the PS3 System, with full knowledge that
their unlawful conduct would irreparably harm SCEA.
6. 18 U.S.C. § 1030(a)(7)(B) – Intent to Extort
Finally, SCEA will likely prevail on its claim under §1030(a)(7)(B), which prohibits
“intent to extort from any person any money or other thing of value” by threatening “to obtain
information from a protected computer without authorization or in excess of authorization or
to impair the confidentiality of information obtained from a protected computer without
authorization or by exceeding authorized access.” Hotz violated this provision when, in the
same post in which the published SCEA’s Keys, he attempted to obtain from SCEA “a thing
of value” in the form of employment: “if you want your next console to be secure, get in touch
with me.” Bricker Decl. at ¶22, Exh. U.
To prevent further harm to SCEA, the Court should immediately enjoin Defendants’
unauthorized access of the PS3 Systems.
E. Absent Injunctive Relief, SCEA Will Suffer Irreparable Injury And The
Balance Of Hardships Strongly Favors SCEA
Defendants’ distribution of Circumvention Devices and unauthorized access of the
PS3 System allow copyright infringement to occur unchecked. Unless Defendants are
enjoined, SCEA will be irreparably harmed. See e.g., Universal City Studios, Inc. v.
Reimerdes, 82 F. Supp. 2d 211, 215 (S.D.N.Y. 2000) (technology that circumvents copy
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protection systems gives rise to “the same immediate and irreparable injury” as would occur
with direct copyright infringement.)10
There can be no dispute that Defendants’ continued illegal distribution of the
Circumvention Devices will greatly erode SCEA’s ability to protect its valuable intellectual
property rights. A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1029 (9th Cir. 2001)
(granting injunctive relief because otherwise “plaintiffs would lose the power to control their
intellectual property.”). If SCEA “is unable to prevent the circumvention of its technology, its
business goodwill will likely be eroded, and the damages flowing therefrom extremely difficult
to quantify.” Macrovision v. Sima Products Corp., 2006 U.S. Dist. LEXIS 22106, *8, 2006 WL
1063284, *3 (S.D.N.Y. 2006). See, e.g., Apple Inc. v. Psystar Corp., 673 F. Supp. 2d 943,
948 (N.D. Cal. 2009) (irreparable harm in a copyright infringement action may be established
through reputational harm); MGM Studios, Inc. v. Grokster, Ltd., 518 F. Supp. 2d 1197, 1215
(C.D. Cal. 2007). All the cases hold that “Intangible injuries such as damage to. . . goodwill
qualify as irreparable harm.” Rent-A-Center, Inc. v. Canyon Television & Appliance Rental,
Inc., 944 F.2d 597, 603 (9th Cir. 2001).
The Central District of California in Nintendo of America, Inc. v. Bung Enterprises, Ltd.,
1999 U.S. Dist. LEXIS 23588 at *36, 1999 WL 34975007, *13 summed up the dilemma
facing copyright owners like SCEA:
The sale of pirated video games, primarily through electronic
transfers on the Internet, is proliferating. For obvious practical
reasons, Nintendo and other owners of game copyrights, cannot
attack this practice through actions against the direct infringers,
who are frequently individuals or small commercial operations that
use [circumvention devices ] to make illegal copies of Nintendo
10There is a split of authority among the courts in the Northern District of California on
whether a presumption of irreparable harm based on likelihood of success on the merits in
copyright actions exists after the U.S. Supreme Court’s decision in Winter v. Natural Res.
Def. Council, Inc., 129 S. Ct. 365, 374 (2008). Realnetworks, Inc. v. DVD Copy Control
Ass’n, Inc.,555 U.S. 7, 641 F. Supp. 2d 913, 953 (N.D. Cal. 2009) (recognizing presumption
of irreparable harm in copyright infringement case). But see Jacobsen v. Katzer, 609 F.
Supp. 2d. 925, 936 (N.D. Cal. 2009) (rejecting any presumption of irreparable harm in
copyright cases). However, even if irreparable injury is not presumed, SCEA has established
such harm.
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products, which are then sold or given to others or uploaded to
the Internet. As Congress clearly recognized when it adopted
Section 1201 of the DMCA, the only effective way to protect a
game or other software developer’s investment in its copyright is
by bringing an end to the sale of devices which are designed to
circumvent the security protection placed within the software.
Congress thereby recognized that the only effective way to stop
the game counterfeiting industry is by enjoining
companies… from making the devices through that industry
is able to thrive.
Nintendo of America, Inc. v. Bung Enterprises, Ltd., 1999 U.S. Dist. LEXIS 23588 at *36,
1999 WL 34975007, *13 (emphasis added). Unless enjoined, the proliferation of PS3 video
game piracy will irreparably harm SCEA by: (1) undermining SCEA’s monumental investment
in the PS3 System; (2) eliminating SCEA’s control over distribution of its copyrighted works;
(3) harming SCEA’s reputation with third party game developers; and (4) diminishing the
sales of legitimate PS3 video games by SCEA and its authorized retailers. Russell Decl. at
¶¶10-12.
SCEA’s affiliates invested hundreds of millions of dollars developing the PS3 System,
including the PS3 System’s security measures. Id. at ¶12. The widespread distribution of
devices that disable or circumvent these measures, however, eradicates the investment in
the technology and undermines the values that these TPMs are meant to preserve. Id.
Primary among these values is SCEA’s ability to control distribution of its copyrighted video
games, as well as those video games owned by third party licensees. Id. For each new
consumer that gains access to Defendants’ circumvention devices, SCEA loses the ability to
prevent that consumer from copying and playing copied SCEA-copyrighted video games. Id.
Once these devices are in the hands of consumers, the loss of control over SCEA’s
copyrighted material is permanent and irreparable. Id. Equally serious is the damage to
SCEA’s reputation and goodwill with third party game developers, whose own copyrighted
video games are pirated for use with the PS3 System as well. Id. All of this piracy adds up
ultimately to lost sales for SCEA and other video game publishers as an enormous number of
consumers naturally prefer free copies of video games over spending money to purchase the
originals. Id.
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SCEA has established that Defendants’ publication, trafficking in and distribution of
the Circumvention Devices facilitate the sale and playing of unauthorized or unlicensed
copies of PS3 System video game software. See Section III.c., supra. If these devices are
made further available on the market, they will have a dramatic downward effect on the sales
of PS3 video games, as unauthorized copies of PS3 System video games will quickly
circulate and become prevalent in the marketplace. Russell Decl. at ¶¶10-12; Bricker Decl.
at ¶30, Exh. CC. It is already happening. Even now, pirated video games are being
packaged and distributed with these circumvention devices. Bricker Decl. at ¶¶2, 30, Exhs.
A, CC. In the absence of injunctive relief, Defendants will continue their illegal activity while
SCEA will continue to be greatly harmed by the distribution of these circumvention devices to
the public. The lack of injunctive relief will therefore result in the loss of goodwill to licensees,
encourage infringers to increase operations, and discourage anti-piracy enforcement – all of
which is great and irreparable harm. In contrast, Defendants will only be ordered to cease
their illicit activity. They will not suffer any monetary damage since, at this point, they are
only distributing Circumvention Devices for free on the Internet. Because of the irreparable
harm to SCEA and because the balance of hardships weighs heavily in favor of SCEA,
SCEA is entitled to a TRO and preliminary injunction.
F. The Public Interest Strongly Favors Granting SCEA Injunctive Relief
In copyright infringement cases, it is ordinarily presumed that an injunction will serve
the public interest if the copyright holder shows a likelihood of success on the merits.
Concrete Mach. Co. v. Classic Lawn Ornaments, Inc., 843 F.2d 600, 612 (1st Cir. 1988). "[I]t
is virtually axiomatic that the public interest can only be served by upholding copyright
protections and, correspondingly, preventing the misappropriation of the skills, creative
energies, and resources which are invested in the protected work."
The interest of the public will be strongly served through a TRO and preliminary
injunction against Defendants’ trafficking of the Circumvention Devices and unauthorized
access to the PS3 System. Allowing the ongoing distribution of Circumvention Devices will
reward – not deter – software piracy, ultimately harming the public. True innovators will be
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deterred from investing the effort and resources needed to create new products if counterfeitenabling
developers are allowed to siphon away the compensation that real creators such as
SCEA otherwise would earn. On the other hand, no public benefit results from Defendants’
activities. No new works have been created; indeed, piracy deters creativity. Public policy
certainly does not support violations of the DMCA to facilitate software piracy.
G. SCEA Has Complied With The Procedural Requirements For Issuance Of
A TRO And Order To Show Cause Re: Preliminary Injunction
SCEA has complied fully with Fed. R. Civ. P. 65, Local Rules 65-1 and 7-10 for
issuance of an ex parte TRO and an Order to Show Cause why a preliminary injunction
should not issue. SCEA has submitted declarations and other evidence showing that it will
be irreparably harmed without an Order restraining Defendants from any further distribution
of Circumvention Devices. SCEA has submitted the required documentation in compliance
with Local Rule 65-1(a). Bricker Decl. at ¶32.
Fed. R. Civ. P. 65 (c) provides that a bond be posted “in an amount that the court
considers proper to pay the costs and damages sustained by any party found to have been
wrongfully enjoined or restrained.” A bond “may not be required, or may be minimal, when
the harm to the enjoined party is slight or where the movant has demonstrated a likelihood of
success.” Ticketmaster L.L.C. v. RMG Techs., Inc., 507 F. Supp. 2d 1096, 1116 (C.D. Cal.
2007); see also Connecticut Gen. Life Ins. Co. v. New Images of Beverly Hills, 321 F.3d 878,
882 (9th Cir. 2003) (“bond amount may be zero if there is no evidence the party will suffer
damages from the injunction.”); YourNetDating, LLC, 88 F. Supp. 2d at 872 (no bond
required for TRO against hacker who violated the CFAA). Here, there is virtually no prospect
that any of Defendants’ legitimate interests would be impinged by an order requiring them to
cease distribution of the Circumvention Devices. However, if the Court requires that a bond
be posted, SCEA submits that the bond should not exceed $5,000 since that amount is more
than sufficient to account for the unlikely possibility that Defendants would be “wrongfully
enjoined or restrained,” from distributing the Circumvention Devices. Fed. R. Civ. P. 65 (c)
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IV. AN ORDER OF IMPOUNDMENT OF THE CIRCUMVENTION DEVICES IS
WARRANTED
Section 1203 (b) (2) of the DMCA specifically authorizes impoundment of “any device
or product that is in the custody or control of the alleged violator and that the court has
reasonable cause to believe was involved in a violation” of §1201.11 Accordingly, SCEA
seeks the impoundment of any and all media in which circumvention devices are stored
within the possession, custody or control of Defendants, including computers, hard drives,
CD-ROMs, DVDs, USB sticks and other media.
Impoundment “most often is granted in ‘piracy’ actions involving widespread
duplication or marketing of counterfeit merchandise such [as] . . . video game and other
software.” 6-35 Nimmer on Copyright §35.05 (2008). Impoundment “is a form of preliminary
relief and the same standards apply with respect to issuance of an impoundment order as to
issuance of a preliminary injunction.” Yamate USA Corp. v. Sugerman, 1991 U.S. Dist.
LEXIS 20701, *41-42, 1991 WL 274854, at *14 (D.N.J. 1991). Accordingly, courts routinely
order the impoundment of infringing materials in preliminary injunction cases. See, e.g.,
Sega Enters. v. MAPHIA, 857 F. Supp. 679, 691 (N.D. Cal. 1994) (ordering the impoundment
of video game copiers and unauthorized copies of video game software); Rebis v. Universal
CAD Consultants, Inc., 1998 U.S. Dist. LEXIS 12366, *12, 1998 WL 470475 *4-5 (N.D. Cal.
1998) (ordering the impoundment of infringing software); Yamate USA Corp., 1991 U.S. Dist.
LEXIS 20701 at *44-45, 1991 WL 274854, *14 (ordering the impoundment of defendants’
equipment used in making the infringing video games); Nintendo of America, Inc. v. Elcon
Indus., Inc., 564 F. Supp. 937, 938 (E.D. Mich. 1982) (ordering the impoundment of infringing
video games); WPOW, Inc. v. MRLJ Enters., 584 F. Supp. 132, 139 (D.D.C. 1984)
11 Section 503(a) of the Copyright Act also provides that “at any time while an action under
this title is pending, the court may order the impounding, on such terms as it may deem
reasonable, of all copies. . . . claimed to have been made or used in violation of the copyright
owner’s exclusive rights. . .or other articles by means of which such copies. . . may be
reproduced.”
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(impoundment of infringing material issued since the standard for preliminary injunction was
met); Dollcraft Industries, Ltd. v. Well-Made Toy Mfg. Co., 479 F. Supp. 1105, 1118 (E.D.N.Y
1978) (ordering impoundment of materials infringing copyright and components used for
manufacture of the infringing items); Duchess Music Corp. v. Stern, 458 F.2d 1305, 1308 (9th
Cir. 1972), cert. denied, 409 U.S. 847 (1972) (impoundment order in copyright infringement
case should “impound everything the plaintiff alleges infringes his copyright,” including any
“means” for making infringing copies.) (emphasis in original). In Duchess Music Corp., the
Ninth Circuit held it was error for the district court not to order impoundment of machines
used by defendants to reproduce the copyrighted records. The Ninth Circuit explained that
“machines, blank cassettes and cartridges . . . and other devices are ‘other means’ for
making infringing copies to [plaintiff’s] copyrights” and thus “fall within the scope of both the
statute and the rules and were properly impounded.” Id. at 1308. Further, computers, when
used to copy and store copyrighted programs, also are subject to impoundment. In Mitchell
Int’l, Inc. v. Fraticelli, 2007 U.S. Dist. LEXIS 86787, *25-26, 2007 WL 4197583, *10 (D. P.R.
2007), the district court ordered the impoundment of defendant’s computers to determine
whether they contained any of plaintiff’s copyrighted software programs. The same should
occur here, as it is almost certain the original Circumvention Devices are stored by
Defendants on their computers.
V. CONCLUSION
SCEA respectfully requests that the Court grant the relief in the proposed Order
submitted herewith.
DATED: January 11, 2011 Respectfully submitted,
KILPATRICK TOWNSEND & STOCKTON LLP
By:
JAMES G. GILLILAND, JR.
Attorneys for Plaintiff
SONY COMPUTER ENTERTAINMENT AMERICA LLC
63092926 v1