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Sony Wins TRO, Impoundment - Updated
Thursday, January 27 2011 @ 08:30 PM EST

Sony's motion for a temporary restraining order, asking for an injunction and impoundment, has been granted [PDF]. The Hon. Susan Illston says she thinks Sony has demonstrated that it is likely to prevail on its DMCA claim. She has also ruled that Sony has met its burden to show that the Court has specific jurisdiction over George Hotz in California, because "he purposefully directed his activities at the forum state."

A TRO is designed to prevent injury until a full hearing can take place, and a date for that isn't set yet. So that will be the next step. Meanwhile, there's a list of things that Hotz and anyone working with him can't do and must do. Like clean up the Internet by taking back whatever he put up there about how to circumvent. Sigh. And hand over any computers or equipment that has any infringing stuff on it, and not erase anything. The judge says Hotz's lawyers are free to file a motion challenging jurisdiction "on a fuller factual record," if they want to, and they've said they want to. But I doubt it will influence anything, judging by this order.

For now, it is ordered that George Hotz, his lawyers, and "all other persons or entities in privity or acting in concert or participation with Defendant Hotz" are temporarily restrained from the following:

1. Offering to the public, creating, posting online, marketing, advertising, promoting, installing, distributing, providing, or otherwise trafficking in any circumvention technology, products, services, methods, codes, software tools, devices, component or part thereof, including but limited to the Elliptic Curve Digital Signature Algorithm ("ECDSA") Keys, encryption and/or decryption keys, dePKG firmware decrypter program, Signing Tools, 3.55 Firmware Jailbreak, root keys, and/or any other technologies that enable unauthorized access to and/or copying of PS3 Systems and other copyrighted works (hereinafter, "Circumvention Devices").

2. Providing links from any website to any other website selling, offering for sale, marketing, advertising, promoting, installing, importing, exporting, offering to the public, distributing, providing, posting, or otherwise trafficking in any Circumvention Devices.

3. Engaging in acts of circumvention of TPMs in the PS3 System to access, obtain, removed, or traffic in copyrighted works.

4. Engaging in unauthorized access to the PS3 System or the PlayStation Network ("PSN") in order to obtain, access, or transmit any program, code, information or command therein.

5. Publishing, posting, or distributing any information, code, program, instructions, video, or other material obtained by circumventing TPMs in the PS3 System or by engaging in unauthorized access to the PS3 System or the PSN.

6. Assisting, facilitating or encouraging others to engage in the conduct set forth above in Nos. 1-5.

I can't believe they think this will work. The court also orders Hotz to "retrieve any Circumvention Devices or any information relating thereto which Hotz has previously delivered or communicated to the Defendants or any third parties." Hotz may be a genius coder, but I doubt even he has the power to censor the Internet or make it bend to his will, let alone remove knowledge from other peoples' brains. But it's a court order! This poor soul. How does he get a judge to comprehend that the order makes no sense in real life? It's too late to wipe the Internet or anyone's brain.

Hotz is also ordered to hand over to Sony "any computers, hard drives, CD-roms, DVDs, USB stick, or any other storage devices on which any Circumvention Devices are stored" in his "possession, custody or control." I guess it's off with his head, too, then, because he surely knows how to do what he did. People who live in countries that don't have the DMCA also know. Just saying.

I would have thought Sony would be more technically clueful about the Internet, but what they do well is get the law to help them out. That's the purpose of the DMCA, if you think about it, to scare people so they won't do what they otherwise can do. So Hotz is in some hot water at the moment, I'd say, an object lesson, and it'll stay that way until the hearing, a date for which is not yet chosen. And from my reading, I'd say after that too, at least with this judge.

There were some further filings leading up to the orders, and here they all are:

01/23/2011 - 44 - AFFIDAVIT of George Hotz in Opposition to 2 Plaintiffs Ex Parte Motion For Temporary Restraining Order filed by George Hotz. (Kellar, Stewart) (Filed on 1/23/2011) Modified on 1/24/2011 (ys, COURT STAFF). (Entered: 01/23/2011)

01/23/2011 - 45 - AFFIDAVIT of Yasha Heidari in Opposition to 2 Plaintiffs Ex Parte Motion For Temporary Restraining Order filed by George Hotz. (Attachments: # 1 Exhibit A)(Kellar, Stewart) (Filed on 1/23/2011) Modified on 1/24/2011 (ys, COURT STAFF). (Entered: 01/23/2011)

01/23/2011 - 46 - Supplemental Brief in Opposition to 2 Plaintiffs Ex Parte Motion For Temporary Restraining Order filed by George Hotz. (Kellar, Stewart) (Filed on 1/23/2011) Modified on 1/24/2011 (ys, COURT STAFF). (Entered: 01/23/2011)

01/24/2011 - 47 - Reply to Opposition to Defendant George Hotz's Supplemental Brief on Personal Jurisdiction filed by Sony Computer Entertainment America LLC. (Gaudreau, Holly) (Filed on 1/24/2011) (Entered: 01/24/2011)

01/24/2011 - 48 - ORDER granting 41 Motion to REMOVE INCORRECTLY FILED DOCUMENTS (tf, COURT STAFF) (Filed on 1/24/2011) (Entered: 01/24/2011)

01/24/2011 - 49 - ORDER granting 40 Administrative Motion to File Under Seal (tf, COURT STAFF) (Filed on 1/24/2011) (Entered: 01/24/2011)

01/27/2011 - 50 - ORDER granting 2 Motion for TRO (tf, COURT STAFF) (Filed on 1/27/2011) (Entered: 01/27/2011)

01/27/2011 - 51 - ORDER granting TRO (tf, COURT STAFF) (Filed on 1/27/2011) (Entered: 01/27/2011)

01/27/2011 - 52 - DOCUMENT E-FILED UNDER SEAL re 49 Order on Administrative Motion to File Under Seal by Sony Computer Entertainment America LLC. (Attachments: # 1 Exhibit J, # 2 Exhibit K, # 3 Exhibit L, # 4 Exhibit M, # 5 Exhibit N, # 6 Exhibit O)(Gaudreau, Holly) (Filed on 1/27/2011) (Entered: 01/27/2011)

Sony today announced a new "PlayStation Suite":

Sony Computer Entertainment Inc. (SCE) today unveiled “PlayStation®Suite” (PS Suite), delivering the PlayStation® experience to Android™ based portable devices*1. Through this entirely new initiative, users will be able to enjoy PlayStation content on an open operating system for the first time in PlayStation history.

In the dramatically evolving and diversifying mobile market, the number of users who enjoy games casually on a variety of devices including mobile phones, smart-phones and tablet PCs, has been increasing significantly. By offering “PlayStation quality” content to this rapidly growing market, SCE will not only deliver the PlayStation experience to a wider base of users around the globe, but will also be able to offer game developers and publishers the potential to further expand their business opportunities to these devices.

In providing the PlayStation experience on Android based portable devices, SCE will commence a “PlayStation®Certified” license program for hardware manufacturers. Through this program, SCE will offer necessary support, including development support as well as logo licensing, to ensure the delivery of PlayStation quality experience across various devices.

Unless they change their minds, I suppose, down the road. Because one thing we know for sure now. Sony intends to 0wn you, your hardware, their software, and your brain. You can buy whatever you wish, but they set the terms, and they'll sue you up the Kazoo if you stray off the reservation.

Here's the problem Sony faces, although not in this courtroom, as explained by Thomas Jefferson in a letter in 1813:

If nature has made any one thing less susceptible than all others of exclusive property, it is the action of the thinking power called an idea, which an individual may exclusively possess as long as he keeps it to himself; but the moment it is divulged, it forces itself into the possession of every one, and the receiver cannot dispossess himself of it. Its peculiar character, too, is that no one possesses the less, because every other possesses the whole of it. He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me. That ideas should freely spread from one to another over the globe, for the moral and mutual instruction of man, and improvement of his condition, seems to have been peculiarly and benevolently designed by nature, when she made them, like fire, expansible over all space, without lessening their density in any point, and like the air in which we breathe, move, and have our physical being, incapable of confinement or exclusive appropriation.
How will a judge possibly alter this? Sony doesn't care, probably what you know or figure out in the privacy of your home. What likely bothers them is Hotz telling others, and on the Internet, so the whole world could know. Sony would like to find a way to terrify kids away from tinkering, from knowledge or at least from sharing it, and I can't tell you that the court won't let them do it.

And then the US wonders why it's losing its edge in technology. It's as predictable as gravity. And to tell you the truth, it terrifies me, as an American, watching this play out. Because there are kids in other places, like Russia and China, who aren't being told not to tinker and share what they know.

Here's what the judge had to decide not to believe, two affidavits, first by George Hotz and then one by one of his lawyers. I'll leave off the headers and certificates of service, just for space. First, the Affidavit of George Hotz, #44:

AFFIDAVIT OF GEORGE HOTZ

Personally appeared before me, an officer duly authorized by law to administer oaths, George Hotz, who after first being duly sworn, states:

1. My name is George Hotz, and I am of required age and competent in all respects to testify regarding the matter set forth herein. I have personal knowledge of the facts stated herein and know them to be true.

2. I am a resident of the State of New Jersey. I have been a resident of the State of New Jersey since approximately 1995.

3. I was born in the year 1989.

4. I am not a resident of Rhode Island. I have never been a resident of Rhode Island.

5. I do not live at 111 NYB St., Providence, Rhode Island 02909. I have never lived at, visited, or appeared at 111 NYB St., Providence, Rhode Island 02909.

6. I have never created, used, or accessed the Playstation Network ("PSN") Online ID "Geo1Hotz".

7. I have never created, used, or accessed the PSN Online ID "koma1tose", "freedomapocalyse", "snapple18", "elijapi", "uKinfuriator", "gamecaveman", or "nyricansoldier".

8. I have never created, used, or accessed an e-mail address for "pbrdiablo@yahoo.com", "lacobra99e@aol.com", "mjt1704@yahoo.com", "babooski28@yahoo.com", "pookie87@yahoo.com", "Jonesjack33@rocketmail.com", or "nyricansoldier@yahoo.com"

9. A Playstation 3 Computer Entertainment System ("Playstation Computer") may be updated through a firmware update, which may be performed by placing a Playstation Computer firmware update on the Playstation Computer.

2

10. Updating a Playstation Computer via a firmware update does not require access to the PSN, nor does it require accepting the PSN's Terms of Service User Agreement or any other PSN agreement to install such firmware update.

11. I have never obtained a Playstation Computer firmware update through the PSN. I have only obtained Playstation Computer firmware updates via direct download links available on the internet.

12. I have never been prompted with an option or opportunity to accept or agree to the PSN's Terms of Service and User Agreement or any other PSN agreement when installing a Playstation Computer firmware update.

13. Accordingly, I have never accepted or agreed to, nor even been afforded the opportunity to accept or agree to, the PSN's Terms of Service and User Agreement or any other PSN agreement when updating my Playstation Computer via a Playstation Computer firmware update.

14. I have not worked with anyone using the internet handle "Bushing" and have no association or connection with any conduct allegedly performed by any individual using the internet handle "Bushing".

15. I have never attempted to obtain employment from Plaintiff, nor am I interested in obtaining employment from Plaintiff, nor would I accept employment from Plaintiff if offered such.

So he denies seeking a job from Sony. He says he isn't associated with or working with "Bushing", and most significantly he says he never agreed to any terms of use, in that he never "obtained a Playstation Computer firmware update through the PSN".

His lawyer, one of them, Yasha Heidari, confirms that you can upgrade without going through the Playstation Network in an affidavit:

Affidavit of Yasha Heidari

Personally appeared before me, an officer duly authorized by law to administer oaths, Yasha Heidari, who after first being duly sworn, states:

1. My name is Yasha Heidari, and I am of required age and competent in all respects to testify regarding the matter set forth herein. I have personal knowledge of the facts stated herein and know them to be true. I am an attorney duly licensed to practice law in the State of Georgia, and I am a member of the law firm Heidari Power Law Group LLC.

2. On the date of this affidavit, I successfully updated a Playstation 3 Computer Entertainment System ("Playstation Computer") I own via a Playstation Computer firmware update.

3. A firmware update file for the Playstation Computer may be obtained through numerous avenues, including by downloading such firmware update file from websites on the Internet.

4. Indeed, a firmware update file for the Playstation Computer may even be obtained from Plaintiff's website. As of the date of this affidavit, Playstation Computer firmware update file for version 3.55 of the firmware, which is the latest firmware update available, may be obtained via the following direct link:

http://dus01.ps3.update.playstation.net/ update/ps3/image/us/2010_1207_ ca595ad9f3af8f1491d9c9b6921a8c61/PS3UPDAT.PUP.
5. When downloading such Playstation Computer firmware update from Plaintiff's website

via the aforementioned link, no Playstation Network Agreement ("PSN Agreement") is presented, made available, or required to be accepted in order to download such firmware update. As used herein, the phrase "PSN Agreement" explicitly includes the "Playstation Network Terms of Service and User Agreement", which is extensively referenced by Plaintiff in this proceeding.

6. I was able to successfully download the aforementioned Playstation Computer firmware update from Plaintiff's website via the aforementioned link. After downloading the Playstation Computer firmware update, I was able to transfer such file to a USB device,

2

and thereafter, connected my USB device to my Playstation Computer. I was then able to perform a Playstation Computer system update.

7. Instructions for installing a Playstation Computer firmware update via a USB device are widely available on the internet, including on Plaintiff's website.

8. When installing the Playstation Computer firmware update, I was prompted to accept a "SYSTEM SOFTWARE LICENSE AGREEMENT (Version 1.4) FOR THE PlayStation®3 SYSTEM" (hereinafter the "Software License Agreement"). Such Software License Agreement is promulgated by Sony Computer Entertainment Inc., and does not reference Plaintiff, Sony Computer Entertainment America LLC. Such Software License Agreement is also dated December 10, 2009. A true and correct copy of such Software License Agreement is hereto attached as Exhibit "A".

9. The Software License Agreement does not include a choice of law provision, a choice of forum provision, or a choice of venue provision.

10. Accordingly, I was able to successfully update my Playstation Computer via a firmware update without connecting to the Playstation Network ("PSN"). Indeed, I have never accessed the PSN to date.

11. I was able to successfully update my Playstation Computer via a firmware update without accepting any PSN Agreement. Indeed, I was never presented with an opportunity to accept a PSN Agreement. To date, I have never accepted nor been presented with an option to accept a PSN Agreement.

12. Updating a Playstation Computer via a firmware update does not require access to the PSN, nor does it require accepting a PSN Agreement to install such firmware update.

13. I have never agreed to a PSN Agreement, yet I am able to fully utilize and use my Playstation Computer.

And in a Supplemental Brief in Opposition to Plaintiff's Ex Parte Motion for Temporary Restraining Order on behalf of Hotz, his lawyers say this in #46:
Sony acquiesces that Mr. Hotz is not subject to the general jurisdiction of California, but argues that Mr. Hotz is subject to the specific personal jurisdiction in California. While Sony presents various specious arguments pertaining to Mr. Hotz's use of Twitter and Paypal to justify its position, the crux and substance of Sony's argument is that Mr. Hotz is subject to the Playstation Network (“PSN”) Terms of Service and User Agreement (hereinafter the “PSN TOS”), which includes a forum selection clause. The PSN is an online service facilitated by Sony that allows, among other limited activities, certain users of the Playstation 3 Computer System (“Playstation Computer”) in conjunction with the PSN to participate in multiplayer gaming with one another. In support of its position that Mr. Hotz is subject to the PSN TOS, Sony puts forth unauthenticated and contradictory hearsay evidence that Mr. Hotz has an Online ID for the PSN, and further makes deceptive and blatantly false statements that Mr. Hotz's is subject to the PSN TOS by virtue of Mr. Hotz updating his Playstation Computer via a firmware update. Nonetheless, pretermitting whether the PSN TOS's limited scope would be sufficient to confer jurisdiction over Mr. Hotz, Mr. Hotz demonstrates that he is, in fact, not subject to the the PSN TOS. Moreover, Contrary to Sony's assertion, and as demonstrated herein, updating a Playstation Computer does not subject a user to the PSN TOS or any other agreement with Plaintiff.

If Sony's contention, which is contrary to well established 9th Circuit law, that Mr. Hotz is subject to the jurisdiction of this Court, is to be accepted, then the very concept of personal jurisdiction would be eviscerated. Sony is a multi-billion dollar that has sold billions of hardware products ranging from Playstation Computers to televisions to computers to personal music players. Sony's position is that anytime a user allegedly “exceeds authorization” when using such products, irrespective of whether such user and conduct is in New Jersey, Germany, or China, then such individual could be hailed into this Court in California.... Sony alleges that all users who have updated a Playstation Computer via Playstation Computer firmware update are bound by the PSN TOS. Plaintiff's Complaint, p.13, ¶ 53. Sony then alleges that Mr. Hotz must have updated his Playstation Computer, and uses this as justification for why Mr. Hotz must be subject to the PSN TOS, which includes a forum selection clause. Sony's assertion is blatantly false and misleading, and Mr. Hotz has explicitly averred that he is not subject to the PSN TOS. Affidavit of Hotz ¶ 6. Equally significant, updating a Playstation Computer does not subject an individual to the PSN TOS. Affidvait of Yasha Heidari in Support of Defendant‟s Opposition to Plaintiff‟s Motion for TRO (“Affidvait of Heidari”) ¶ 5. With regard to the PSN TOS, the agreement is not a required step to access the 3.55 firmware and is not required to be entered into by end users to install the 3.55 Firmware onto a Playstation computer. Affidvait of Heidari ¶¶ 5, 8-13. The 3.55 Firmware file may be accessed, without encountering any agreements, directly from the Sony website at
http://dus01.ps3.update.playstation.net/update/ps3/image/us/2010_1207_ca595ad9f3af8f1491d9c9b6921a8c61/ PS3UPDAT.PUP or many other third party websites. Id. ¶ 4. Upon installing the firmware, the only agreement encountered by an end user is an agreement with Sony Computer Entertainment, Inc. which is not a party in this lawsuit. Id. ¶ 8. The agreement does not contain a forum selection clause and raises serious questions of Sony Computer Entertainment America LLC's standing to bring this lawsuit. Id. ¶ 9

Moreover, in a final effort to assert Mr. Hotz is subject to the PSN TOS, Sony states in its supplemental brief that “users often connect to the PSN Network” to obtain updates of the Firmware. Sony Supplemental Brief p 3: 24 (emphasis added). Sony has not and cannot truthfully allege that Mr. Hotz has accepted the PSN Agreement or has connected to the PSN Network to obtain the 3.55 Firmware. Sony, without more, presumes Mr. Hotz acquired the 3.55 firmware from SCEA. Id. at p.3: 27. Notwithstanding the foregoing, Mr. Hotz has explicitly stated that he has not obtained the Playstation Computer firmware update from the PSN. Second Affidavit of Hotz ¶ 11.

The document explains in detail what specific jurisdiction means in the Ninth Circuit:
The Ninth Circuit has established a three-part test for determining when specific jurisdiction may be exercised. See Data Disc, Inc. v. Systems Tech Assocs, Inc., 557 F.2d 1280, 1287 (9th Cir. 1977). To properly exercise specific jurisdiction, (1) The nonresident defendant must do some act or consummate some transaction with the forum or perform some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its laws; (2) The claim must be one which arises out of or results from the defendant's forum-related activities; and (3) Exercise of jurisdiction must be reasonable. Id. All three prongs must be met, and the inability to satisfy any of the aforementioned prongs will result in the failure to establish jurisdiction over the defendant. Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 802 (9th Cir. 2004). Moreover, the plaintiff bears the burden of satisfying the first two prongs of the test. Id.; Slepian v. Guerin, 172 F.3d 58 (9th Cir. 1999). If the plaintiff succeeds in satisfying both of the first two prongs, the burden then shifts to the defendant to "present a compelling case" that the exercise of jurisdiction would not be reasonable. Schwarzenegger, 374 F.3d at 802.
But then Sony speaks, and Sony portrays Hotz in a very different light, which obviously the court accepted as true, or true enough, #47:
PLAINTIFF’S STATEMENT IN
RESPONSE TO DEFENDANT GEORGE
HOTZ’S SUPPLEMENTAL BRIEF
ON PERSONAL JURISDICTION

Plaintiff Sony Computer Entertainment America LLC (“SCEA”) respectfully submits this statement in response to the supplemental brief and declarations submitted by Defendant George Hotz (“Hotz”).

I. HOTZ HAS DONE “SOMETHING MORE” BY AFFIRMATIVELY DIRECTING HIS ILLEGAL ACTIVITIES AT SCEA BASED IN FOSTER CITY, CALIFORNIA

Hotz attempts to analogize his conduct to a mere operator of a passive web site that just so happens to be accessible in California. There is nothing, however, about Hotz’s activities aimed at SCEA’s California business that can be described as “passive.” Hotz did not merely make a few postings on a website, but rather he affirmatively induced and encouraged PlayStation®3 computer entertainment system (“PS3 System”) consumers to use his illegal circumvention devices with the knowledge that this activity would directly harm SCEA in this District. Hotz’s conduct was deliberately targeted and aimed at SCEA in California, and it had the predictable effect of causing extreme harm to SCEA at its headquarters in Foster City, California. Hotz is not permitted to avoid California jurisdiction by aiming his malicious conduct at a California business from a New Jersey address.

In his supplemental brief, Hotz tries to refute this fact by characterizing his website as “passive” and claiming that he “neither encourages nor facilitates illegal circumvention devices to be downloaded on his website.” Supplemental Brief, pp. 12, 13. This is false. Not only does Hotz publish the “Metldr Keys” on his website, he also provides links on his website to his other circumvention devices, including the 3.55 Firmware JailBreak and the Signing Tools, encouraging and enabling individuals to download these circumvention devices, and thus facilitating video game piracy. See Declaration of Ryan Bricker filed on January 11, 2011 (“Bricker Decl.”), ¶¶22, 21, Exhs. U, T. And contrary to his after-the fact denials, Hotz deliberately aimed his conduct at SCEA in this District when he published the “Metldr Keys” on his website and wrote to SCEA: “if you want your next


console to be secure, get in touch with me.” Bricker Decl., ¶22, Exh. U.1 In addition, Hotz has touted his illegal hacking exploits on his interactive “On the PlayStation 3” blog (Second Supplemental Declaration of Ryan Bricker filed on January 13, 2011,¶4, Exh. C (“Second Suppl. Bricker Decl.”)). On that blog, Hotz openly interacts with others regarding his hacking of the PS3 System.2 Additionally, Hotz has used other interactive tools based in this District, such as Twitter and YouTube, to report on his hacking of the PS3 System. Id. at ¶¶2-3, Exhs. A-B; Bricker Decl., ¶24, Exh. W.

As the above demonstrates, Hotz’s unlawful conduct – the unauthorized accessing of the PS3 System, circumvention of its technological protection measures, and trafficking in circumvention devices that enable the piracy of video games – is both intentionally aimed at and had the effect of injuring SCEA in the Northern District of California where it has its principal place of business.3 Hotz was well aware of the impact of his conduct on SCEA and game publishers. Bricker Decl., ¶27, Exh. Z. Consequently, there can be no doubt that Hotz’s unlawful conduct satisfies the Ninth Circuit’s test of “something more” indicating that Hotz “purposefully (albeit electronically) directed his activity in a substantial way to the forum state.” Cybersell, Inc. v. Cybersell, Inc., 130 F. 3d 414, 418 (9th Cir. 1997); Panavision Int’l, L.P. v. Toeppen, 141 F.3d 1316, 1320 (9th Cir. 1998). To find otherwise would allow a hacker to intentionally distribute circumvention devices in California with the knowledge that a California business is being harmed, while preventing a California court


from taking action to protect its residents who have been tortiously injured. See Panavision, 141 F. 3d at 1324.

II. HOTZ FAILS TO UNEQUIVOCALLY DENY HOLDING A PLAYSTATION NETWORK (“PSN”) ACCOUNT

Hotz again fails to unequivocally deny that he has, or has ever had, a PSN account. In his supplemental declaration, Hotz merely – and carefully – denies that he has ever accessed the PSN to install a firmware update. See Hotz Decl., ¶¶11-13.4 Hotz also claims to have accessed the PS3 System firmware not through the proper channels of the SCEA website, but instead “via direct download links available on the internet.” Hotz Decl., ¶11. Though he disavows association with various email addresses in SCEA’s database, he pointedly does not state that he has not now, nor has he ever, maintained a PSN account. His failure to unequivocally deny that he has held a PSN account is telling.

Hotz’s attorney further submits a declaration attempting to show that the PSN does not have to be accessed when updating firmware via the PlayStation website. See Declaration of Yasha Heidari. However, even if the firmware was downloaded pursuant to the PlayStation website as done by Hotz’s attorney, the user is still subject to the PlayStation website’s terms and conditions at http://us.playstation.com/support/termsofuse/index.htm. These terms prohibit, among other things, “using, making or distributing unauthorized software or hardware in conjunction with the Sites, or taking or using any data from the Sites to design, develop or update unauthorized software or hardware.” The terms also include a forum selection clause and consent to jurisdiction in San Mateo County, California. They also incorporate by reference the terms of the PSN User Agreement. Therefore, a user who downloads the firmware via the PlayStation website, instead of the PSN, nonetheless consents to jurisdiction in California.


III. CONCLUSION

Hotz’s unlawful conduct is intentionally directed at SCEA in the Northern District of California and is causing substantial harm to SCEA here, warranting this Court’s exercise of personal jurisdiction. Hotz has failed to show otherwise. Accordingly, SCEA respectfully requests that the Court grant its Ex Parte Motion for a Temporary Restraining Order.

___________
1 In his declaration, Hotz now summarily denies that he sought employment from SCEA. Declaration of George Hotz (“Hotz Decl.”), ¶15. It does not matter, however, how he now retroactively characterizes his conduct – the fact remains that his statement conclusively demonstrates that his conduct was expressly targeted at SCEA in California. Indeed, Hotz even states that “[i]t would be fun to be on the other side.” Bricker Decl., ¶22, Exh. U. 2 In attempting to avoid jurisdiction, Hotz disingenuously argues that since Google maintains the site, Google is responsible for its interactivity and not Hotz. Yet it is Hotz who chose to blog about his unlawful conduct and to have discussions with third parties regarding that same conduct over the Internet.

3 Hotz’s conduct also has had the effect of harming other publishers of games for the PlayStation 3, many of whom are based or located in this District, including, for example, Electronic Arts (Redwood City).

4The issue of whether Hotz has a PSN account does not need to be resolved at this time. As demonstrated in SCEA’s supplemental briefing, Hotz has had more than the minimum contacts necessary to establish jurisdiction by this Court.

Hotz's lawyers issued a press release [PDF] recently in which they explained why people should care about this case, even if they don't tinker and don't game. You can find pictures of the two attorneys here. The meat of the press release:
FOR IMMEDIATE RELEASE: January 14, 2011

Law Firms defend Sony’s Accusations against George Hotz

San Francisco, California – Today, attorneys Stewart Kellar and Yasha Heidari announced they intend to vigorously defend the baseless accusations asserted by Sony Computer Entertainment America LLC (“Sony”) against Mr. George Hotz.

“Make no mistake,” Stewart Kellar, intellectual property attorney and e-ttorney at law™ stated, “this case is not about Sony attempting to protect its intellectual property or otherwise seek bona fide relief from the court. Rather, it’s an attempt from Sony to send a message that any individual using Sony hardware in a way Sony does not deem appropriate will result in harsh legal consequences from a multi-billion dollar company, irrespective of any legal basis or authority for such action.”

Sony recently filed suit against a number of individuals, including Mr. Hotz, a 21-year-old computer prodigy who is well-known for his accomplishments and innovations in the field of phone and computer development, such as for creating the ability to provide for iPhone interoperability between various cellular network carriers. Citing unfounded concerns and a dubious legal basis for jurisdiction, Sony seeks relief from the Court due to Mr. Hotz re-enabling core functionality of the Playstation 3.

“I think it is quite telling that Sony, who is legally required to provide notice to Mr. Hotz before seeking any special relief with the Court, decided to e-mail Mr. Hotz a copy of their motion at 7 p.m. when a hearing was scheduled for the next morning at 9 a.m. in California, while Mr. Hotz does not even live in California. Sony is seeking various unreasonable relief, such as seizing Mr. Hotz’s personal property and computers. Luckily, the Court postponed the hearing,” said Yasha Heidari, Esq., managing partner at Heidari Power Law Group, LLC.

Mr. Kellar added, “This case not only has profound implications for the parties involved, but it also implicates core property rights for every consumer out there.” Recently in April of 2010, citing the fact that the Playstation 3′s terms and conditions reserve the right to modify the PS3′s settings and features, Sony inexplicably issued an “upgrade” that removes the end user’s ability to utilize the PS3′s OtherOS functionality. Consumer familiar with the PS3 know that OtherOS is a powerful tool that is critical in allowing its users to utilize the PS3 as a personal computer. Sony had previously touted the PS3′s OtherOS as a major selling point and feature that would receive Sony’s continued support. Yet, despite this, Sony took the position that consumers must either choose to upgrade the PS3 to play newer game titles and lose OtherOS support, or ignore the update to keep OtherOS but be prohibited from playing newer titles.

Mr. Heidari stated, “While most companies issue firmware upgrades to increase a product’s abilities over its life cycle, Sony has taken the unacceptable and draconian approach of decreasing the PS3′s capabilities by actually destroying a core feature of the PS3. Imagine taking in your car for an oil change and having the manufacturer remove your car’s air conditioner, radio, and half its horsepower because of fears that other hypothetical individuals might abuse their vehicles. It just doesn’t make any sense, and it’s a slap in the face to the consumers that put their support behind the product.” Mr. Kellar proclaimed, “This case rests on Sony’s misguided belief that it has the unfettered ability to control how consumers use the products they legitimately purchase.”

Both attorneys agree that Sony’s interpretation of the law is quite troubling. The attorneys state they hope the judge will deny Sony’s motion, but regardless of how the judge rules, they fully intend to defend Mr. Hotz in this action, which has wide-spread implications for consumers globally.

EFF highlights two cases that seem relevant to them in this context of terms of use, one the Lori Drew case, United States v. Drew and also Facebook v. Power Ventures:
For years, EFF has been warning that the anti-circumvention provisions of the Digital Millennium Copyright Act can be used to chill speech, particularly security research, because legitimate researchers will be afraid to publish their results lest they be accused of circumventing a technological protection measure. We've also been concerned that the Computer Fraud and Abuse Act could be abused to try to make alleged contract violations into crimes.

We've never been sorrier to be right. These two things are precisely what's happening in Sony v. Hotz. If you have missed this one, Sony has sued several security researchers for publishing information about security holes in Sony’s PlayStation 3. At first glance, it's hard to see why Sony is bothering — after all, the research was presented three weeks ago at the Chaos Communication Congress and promptly circulated around the world. The security flaws discovered by the researchers allow users to run Linux on their machines again — something Sony used to support but recently started trying to prevent. Paying lawyers to try to put the cat back in the bag is just throwing good money after bad. And even if they won — we'll save the legal analysis for another post — the defendants seem unlikely to be able to pay significant damages. So what's the point?

The real point, it appears, is to send a message to security researchers around the world: publish the details of our security flaws and we'll come after you with both barrels blazing. For example, Sony has asked the court to immediately impound all "circumvention devices" — which it defines to include not only the defendants' computers, but also all "instructions," i.e., their research and findings. Given that the research results Sony presumably cares about are available online, granting the order would mean that everyone except the researchers themselves would have access to their work....

Finally, even if the researchers had used Sony's network, Sony's claim that it's a crime to violate its terms of use has been firmly rejected by courts in cases like United States v. Drew and Facebook v. Power Ventures. As those courts have recognized, companies like Sony would have tremendous coercive power if they could enforce their private, unilateral and easy-to-change agreements with threats of criminal punishment.

So, this is a culture clash, and Sony is in denial to boot. Not only is there litigation now in the US about Sony removing OtherOS functionality, which is what Hotz says he was working to restore, ars technica is now reporting that customers in Norway are hopping mad too:
Norway's Consumer Council, an independent government agency, has received multiple complaints from PlayStation 3 owners over the removal of the "Other OS" functionality of the console. It has now taken the complaint to Norway's Consumer Ombudsman, with the Council claiming that Sony breached the Norwegian Marketing Control Act by removing a key feature after sale.

"Sony claims a universal right to change or remove functionality from the gaming console," Øyvind H. Kaldestad of the Consumer Council told Ars. "The Consumer Council strongly believes there needs to be a limit to what constitutes a reasonable change to products we buy—and that terms of service that grant the manufacturer full access to literally downgrade the product or limit the functionality are unreasonable and in clear violation of the Marketing Control Act."

There's also the issue of Sony's wording. "When a company use terms like 'updates' or 'upgrades,' it is reasonable to expect a significant improvement of the product and not the risk of being stuck with a lesser product," said the Council's Thomas Nortvedt in a statement.

Update: I've puzzled over why Sony was fighting so hard to stay in California courts, instead of just filing against Hotz in New Jersey. I think this article from 2004 might explain it:
After eight months of deliberation, a San Francisco federal judge has ruled that software company 321 Studios' popular DVD-copying products are illegal.

In a ruling released Friday, Judge Susan Illston granted Hollywood studios' request for an injunction against 321 Studios, saying the small software company has seven days to stop distributing its DVD-copying products....

"It is the technology itself at issue, not the uses to which the copyrighted material may be put," Illston wrote. "Legal downstream use of the copyrighted material by customers is not a defense to the software manufacturer's violation of the provisions (of copyright law)." ...

The ruling, which had been pending since arguments last May in Illston's court, goes a long way toward shoring up Hollywood's weakening digital copy protections for its profitable DVD business--even while potentially eliminating one key driver of sales in the DVD burner market.

She was talking about the DMCA, the law at issue in Sony's case against Hotz.

And here's what happened next:

"They've ceased operations," said Michael Page, an attorney with Keker & Van Nest, who represented 321 Studios. "They couldn't afford to do business and fight all the legal fights. They essentially got sued out of existence."
I don't think Sony could find a better judge to accept their story.

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