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Sony Files Exhibits Trying to Link Hotz to California - Updated - A Supplemental Brief
Tuesday, January 18 2011 @ 11:45 AM EST

I know you are wondering what happens next in Sony v. Hotz if the judge in California decides Sony doesn't have jurisdiction, which she expressed doubts about. And some of you may wonder what jurisdiction means. Sony has filed some exhibits with a Declaration by the lead lawyer, James Gilliland, and so we find out now why Sony thought George Hotz had a PS3 Network account and had links to California, so I'll use that to show you why I agree with the judge that they may not. And if not, the simple answer to what happens next is that Sony can file in New Jersey, which is where George Hotz resides.

So, he will have to face this litigation in one place or another. And that has me wondering about something that some of you will have the expertise to explain to me. Supposing you were Sony, and you were in a panic because you figured some gamers out there would use Hotz's research to cheat on games. You want to shut that door. I know they could make new hardware with a better system to keep this from happening. Hotz offered to show them how. But there are many Playstation 3s out there already. Is there a way to do what Sony wants to do, shut the door that was opened? I mean, for networked gamers, not if you are in your own home tinkering. They likely don't much care about that. But what about the gamers who go online and want to play fair and square? Isn't there a way for Sony to screen who gets to play networked gaming? Why wouldn't that solve its problem? If it is a problem. Maybe it's a missed business opportunity.

Maybe you can explain that to me, and I'll explain to you some things about jurisdiction.

First, here are the filings:

01/14/2011 - 29 - Transcript of Proceedings held on January 14, 2011, before Judge Susan Illston. Court Reporter/Transcriber Katherine Powell Sullivan, RPR, CRR, CSR, Telephone number 415-794-6659/Katherine_Sullivan@cand.uscourts.gov. Per General Order No. 59 and Judicial Conference policy, this transcript may be viewed only at the Clerks Office public terminal or may be purchased through the Court Reporter/Transcriber until the deadline for the Release of Transcript Restriction.After that date it may be obtained through PACER. Any Notice of Intent to Request Redaction, if required, is due no later than 5 business days from date of this filing. Release of Transcript Restriction set for 4/14/2011. (Sullivan, Katherine) (Filed on 1/14/2011) (Entered: 01/14/2011)

01/14/2011 - 30 - ORDER granting 20 Administrative Motion to File Under Seal (tf, COURT STAFF) (Filed on 1/14/2011) (Entered: 01/14/2011)

01/14/2011 - 31 - Declaration of James G. Gilliland, Jr. in Support of 2 MOTION for Temporary Restraining Order filed bySony Computer Entertainment America LLC. (Attachments: # 1 Exhibit A, # 2 Exhibit B, # 3 Exhibit C, # 4 Exhibit D)(Related document(s) 2 ) (Gaudreau, Holly) (Filed on 1/14/2011) (Entered: 01/14/2011)

Before I tell you the rest, let me start by stating how much I admire James Gilliland's work. We saw him in action in the Apple v. Psystar case, and it was a beautiful sight. He showed himself to be not only skilled, but a decent guy, and without a doubt Sony will do better with him than with any other lawyer. But here's why I think they'll very likely have to file in New Jersey.

The Declaration by Gilliland has an Exhibit A, as you see, which is a screenshot of a sign-up sheet for a PS3 Network acount for a "George Hotz", signing up with the nym Geo1Hotz, which Sony's records show is "active and related to" seven other accounts, maybe more. I'm not a gamer, so I don't know what it means to be "related to" other accounts. Maybe some of you can educate me. Perhaps it means friends of or plays games with? Or, please note that one of the related accounts is a nym uKinfurator using the email pookie87@yahoo.com. Now, look at Exhibit A. Note the email address by "Geo1hotz" is pookie82@yahoo.com. Hmm. That would make me wonder if they are one and the same person signing up for two different accounts.

Looking around at my friend Google's house on the web for a pookie82 at Yahoo, I find a pookie82. But she seems to be a girl. A girl in Ireland.

Gilliland notes in his Declaration:

The account may show some specious information because when a PSN user assents to the license agreement the user can enter any address, phone number, or birthday he wishes.
Well, zowie. If so, can you sue someone on probably specious information? And obtain jurisdiction?

I mean, George Hotz is famous. Anyone can use that name. Others might sign up as Nobody Nowhere as the name. Haven't you ever seen "Bill Gates" commenting on Slashdot? I've had at least two kidders try to sign up for a Groklaw membership as "Darl McBride". People leave comments as "me" on other boards all the time, very offensive ones too. In fact, years ago, I had to post here on Groklaw that I wouldn't leave a comment anywhere but on Groklaw, unless I mentioned it here, so people would know when it was really me and when it was some donkey pretending to be me and trying to make me look bad.

The address "George Hotz" used is Providence, RI. NYB Street. Is there really such a street? Did Sony check that address to see if it really exists? And the account indicates that Geo1Hotz is 15 years old. The real Hotz isn't 15. He was 17 in 2007, according to this BBC article, where, by the way, he mentioned he owns a PS3 but "never really played" it, which is harmonious with what he told the court, not so much with Sony's claims:

He said his motivation was "curiosity" and "opening up the platform".

"To tell you the truth, I've never really played a PS3," he said. "I have one game, but I've never really played it."

His interest is not on Sony's radar, it seems to me. He's interested in math and solving puzzles and the freedom to tinker. If you sold him a car, he'd want to open the hood and mod it too, probably. But this is higher math, you might say. He is, I gather, a genius. His Playstation was a gift, by the way. He didn't even buy it. So, he's not some guy wanting to cheat on PS3 networked games, I gather, and he's been quoted in the news as saying that he took steps to block that kind of cheating, but the BBC article indicates that might not have happened immediately.

If so much information on that sign up sheet is spurious, then, is the name "George Hotz" *more* likely to be truthful or less? I can't rule out that Sony has more information than this up its sleeve, like IP addresses, but you'd think this would be the time they'd roll it out for the court, with so much riding on getting jurisdiction. Then again, who knows? Lawyers are strategists. So, we will have to allow for anything and draw only draft conclusions, but so far it looks like Sony relied on spurious information. Why, you are asking?

I'm only guessing here, but probably they hoped for California because there is more than one defendant, and Sony seemed to think that they are all working together in some kind of conspiracy, which Hotz has fervently denied. But if you are Sony, you'd rather have one case to litigate, so your lawyers don't have to fly all over the place and do discovery in two or more states. All that is expensive. If you notice, Gilliland's Declaration mentions another defendant apparently is in California, someone using the nym "Bushing," so if that sticks, then presumably Sony argued at the hearing that putting both cases together made sense. But if that doesn't work, they can file in New Jersey against Hotz and in California against the other guy. We'll get to read the transcript of the hearing eventually, in April, and when it comes out, I'll add it here.

Anyway, Hotz, the real one, says in his Affidavit that he's lived in New Jersey since 1995. That's not Rhode Island, last I looked. Or California.

But Gilliland noticed that Hotz did "live in" California from April of 2008 to October of that same year, while he did some work for Google. Ever hear of Google's Summer of Code? No doubt Google has other such arrangements for brilliant coders, but something like that is temporary. By then, Hotz was, what, 18? Presumably he had more education in mind for his future. Anyway, you kind of have to be a PhD to get hired permanently at Google. If I applied, I'd have no chance. Trust me. My point is, April to mid-October isn't a California residency to me. You don't give up your home in New Jersey, I guess you could say. It's a temporary assignment. And where does Rhode Island come into this picture? It doesn't.

In short, while I hate to explain this, since it might burst some bubbles, there are one or two people on the Internet who don't tell the truth when they sign up for things, so they can pretend they are not a dog or just because everyone is utterly sick of being tracked everywhere they go.

If you went into a store and looked around, if a salesman followed you around taking notes on what drew your eyeballs and what you eventually bought and how old you are and what stores you went to next and where you live, etc., it would totally creep you out. Yet people go to Facebook or wherever and let that happen to them. Incidentally, some prosecutors use Facebook during jury selection now, using issued iPads. They want to know what you really think.

But geeks are a bit more knowledgeable, and a lot of them will sign up with bogus info to protect their privacy, if the site allows it. And so, if you let companies sue based on sign up sheets, you are going to miss the target more than you'll hit a bull's eye. From what I'm seeing, that is what has happened here.

I have no idea yet what is true and what isn't, of course, since I don't have access to the actual info, only what the parties are saying to the court, and as retiring Judge Walker said in a speech the other day, every case has two sides and sometimes lawyers believe in their clients more than they should, but I do have to agree with the judge that I have some deep worries as to whether Sony has jurisdiction over Hotz in California.

I get that they are worried. I totally understand needing to protect the fairness of a networked game, by the way. And as you know, I believe in keeping the law, whether I admire a law or not, but how much control can a vendor have over *hardware* that someone has legally bought or gotten as a gift? It used to be clearer, but ever since the US Copyright Office said you can jailbreak an iPhone, where is the line now? I confess, I don't know now. That is what this case is really about. The judge will decide, and we'll find out where she thinks the line is.

But I promised to explain jurisdiction. I'll direct you to this article that goes into it in detail. The short version is this: there is subject matter jurisdiction and personal jurisdiction. The first is whether the court hears the kind of case being presented. You have to go to bankruptcy court for a bankruptcy, in other words. If you file elsewhere, the court will not have subject matter jurisdiction. We saw a dispute over subject matter jurisdiction when SUSE argued -- albeit unsuccessfully -- that the Delaware bankruptcy court had no authority over the arbitration in Europe between SCO and Novell/SUSE.

Personal jurisdiction is whether the plaintiff can sue you in the court it has chosen. We saw that come up in the Pelican litigation when the plaintiff tried unsuccessfully to bring a case against Darl McBride and his partners in New York instead of Utah.

In this case, Hotz says he has no connection to California, and in the US, you can't sue someone in a state where they don't live, have a presence, like a store, or some tie to the state. The reason is because it is inconvenient to have to travel across a country as large as the US to defend yourself any old place someone might choose to sue you in. The plaintiff has to choose a place where you might expect to be sued.

Personal jurisdiction, then, is whether they can sue *you* as a person and make you show up in the court you want to sue in; subject matter is whether the court can rule on the issue presented, the type of case.

If you look at any complaint, you'll find a section usually titled "JURISDICTION AND VENUE" or something in that ballpark, where the plaintiff asserts why it believes the court has subject matter jurisdiction and why it thinks it has personal jurisdiction over the defendant(s). If you look at SCO's first complaint for slander of title against Novell in Utah state court, for example, you can see that section:

II. PARTIES JURISDICTION AND VENUE

9. Plaintiff SCO is a Delaware corporation with its principal place of business in Utah County, State of Utah.

10. Defendant Novell is a Delaware corporation with its executive offices and headquarters in Waltham, Massachusetts that does business in the State of Utah, has a registered agent in Salt Lake County, Utah, and lists a sales office located at [address], Utah.

11. This Court has subject matter jurisdiction over this matter pursuant to section 78-3-4 of the Utah Code.

12. This Court has personal jurisdiction over Novell because Novell transacts substantial business in the State of Utah.

13. Venue is proper in this Court pursuant to section 78-13-7 of the Utah Code.

That complaint was filed in the Third Judicial District Court of Salt Lake County, Utah. Novell, however, denied that the case belonged in state court, transferred the case to federal court, and successfully argued that it should be heard by federal court, because it involved copyright claims, and that's federal court's subject matter.

It's more complex than that, actually, since there are cases that overlap, and then it's a balancing analysis. If you want to follow all the arguments as to why Novell prevailed on its jurisdictional argument, you can. Here's where SCO argued in a motion to remand that the case was more a contract case and so should go back to Utah state court. And here's Novell's presentation of its arguments that it belonged in federal court because everything depended on whether or not SCO owned the copyrights at issue. There was a hearing on the matter, and here's the court's decision in favor of Novell. The judge found that copyright was the central piece, but it's a long order, because, as the ruling states, "Determining whether a claim requires construction or interpretation of the Copyright Act rather than just contract interpretation may be a discrete issue but it is not a simple task." You'd have to read his ruling in full to get all the nuances of how courts decide such jurisdictional matters.

If you do, you'll understand why the judge in Sony v. Hotz didn't immediately rule on the matter of personal jurisdiction at the hearing. She has to carefully consider all the nuances.

All of those articles I've linked to for you explain aspects of jurisdiction in some detail, if you are interested in digging deeper. My purpose is just to help you understand what is going on now in the Sony case, that it's an argument about jurisdiction, personal jurisdiction, but that it won't in any way hinder Sony from suing Hotz somewhere. The only question now is where.

On the question of whether Sony has a problem with "hackers" or is missing a business opportunity, here's the article I linked to earlier about Microsoft, of all companies, facing a similar situation. From the article:

"Companies should make it easy for people to hack," says Karim Lakhani, an assistant professor at Harvard Business School who studies open-source projects. "Why wouldn't you want people going crazy with your products?"
Speaking of which, here is a handy mod to your iPhone some creative Virginia Tech grads came up with. It's a mini-fridge that throws you a beer, controlled by an app. I mean, there's no telling what wonderful things can happen if you let creativity fly free. It's the essence of the success of app stores, if you think about it.

Microsoft has announced it will be making an official developers' kit available to encourage "hacking". Why couldn't Sony do that too? If the issue is networking, couldn't it set up a separate gaming environment for modded PS3s, or is that impractical? If you were Sony, a perfect and clueful Sony, what would you do?

Update: Sony has now filed a Supplemental Brief, listing yet more arguments why the court should decide it has jurisdiction over Hotz:

01/17/2011 - 32 - Supplemental Brief in suupport of 2 MOTION for Temporary Restraining Order filed by Sony Computer Entertainment America LLC. (Gilliland, James) (Filed on 1/17/2011) Modified on 1/18/2011 (ys, COURT STAFF). (Entered: 01/17/2011)

What does it mean? It means that unless it spoke up fast, Sony was worried about the outcome. And what are its further arguments? As I suspected, one is that other defendant and the likely witnesses are in California. But Sony also argues that the harm was to a California entity, and Hotz did what he did on purpose knowing it would harm Sony. I am not sure that's true, but it's one of those things that probably depends on one's point of view. Plus, just between us chickens, lawyers argue whatever they think will work, if it's arguable at all. It's part of the adversary system.

Even in that context, I was disappointed to see this:

Hotz is and was well aware of the harmful impact of his unlawful conduct on SCEA. Bricker Decl., Exhs. U, Z. Moreover, just like the defendant in Panavision, Hotz attempted extortion. When posting the "Metldr Keys" on his website, in an attempt to obtain employment from SCEA, Hotz wrote: "if you want your next console to be secure, get in touch with me." Id.
*Extortion*? What a negative overlay on to words that just say that Sony doesn't seem to know how to make secure products, and Hotz was offering to help them. I see nothing there about money. Just an offer to help.

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