European court rules that homebrew console circumvention may be lawful

The Court of Justice of the European Union today ruled that software which circumvents the piracy protection system on games consoles may actually be lawful, depending on how it is mainly utilized. In a long-standing court case between Nintendo and retailer PC Box, Nintendo is arguing that the software that PC Box offers to customers that will circumvent an encrypted code system on both the Nintendo DS and the Wii is unlawful, and is allowing consumers to play pirated games. In return, PC Box says that its homebrew software allows for consumers to watch movies and play MP3s on their DS and Wii consoles, and that these are not unlawful acts -- rather, the company argues that Nintendo's protection system is simply preventing these non-illegal options. A new Court of Justice filing today in Milan, Italy, has found that Nintendo's legal protection only covers unauthorized acts of reproduction and distribution of pirated software, and that any protection in this vein must respect the purposes of software that is used to circumvent protection for lawful purposes. The court questioned whether there were better protection measures other than Nintendo's, which would cause less interference with third-party software and allow users to participate in lawful use of their consoles, while also respecting rightholder's rights. That being said, the court added that it must also examine how these sorts of circumvention software are mainly used, to determine whether consumers are frequently using them to read unauthorized copies of Nintendo games, rather than for purposes which do not infringe copyright. In a statement, Nintendo said that it "will continue to fully engage with the Milan Tribunal, from whom the reference to the CJEU arose, in order to allow it to reach a considered reasoned decision in the civil case between Nintendo and PC Box." The company added that its protection systems are only ever necessary to prevent widespread piracy, and that since it believes that PC Box's software is marketed to enable piracy of legitimate video games, Nintendo is confident that the court will eventually determine that the sale of this homebrew software is unlawful. The full press release from the Court of Justice can be found here.