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SCEA and George Hotz Reach Settlement!
Monday, April 11 2011 @ 05:38 PM EDT

Here's the joint statement. There is a permanent injunction, but no admission of wrongdoing by Hotz, who, as he said from day one, was never trying to enable piracy. I commend SCEA for taking this step, and I mean that sincerely.

[Update: Now that I've read the stipulation, I retract that commendation, or at least amend it. It's rather heavy handed. I'll show you the documents.]

Here's the joint statement in full:

Joint Statement

Sony Computer Entertainment America (“SCEA”) and George Hotz (“Hotz”) today announced the settlement of the lawsuit filed by SCEA against Hotz in federal court in San Francisco, California. The parties reached an agreement in principle on March 31, 2011. As part of the settlement, Hotz consented to a permanent injunction.

Both parties expressed satisfaction that litigation had been quickly resolved. “Sony is glad to put this litigation behind us,” said Riley Russell, General Counsel for SCEA. “Our motivation for bringing this litigation was to protect our intellectual property and our consumers. We believe this settlement and the permanent injunction achieve this goal.”

“It was never my intention to cause any users trouble or to make piracy easier,” said Hotz, “I’m happy to have the litigation behind me.” Hotz was not involved in the recent attacks on Sony’s internet services and websites.

In the action, SCEA accused Hotz of violating federal law by posting online information about the security system in the PlayStation 3 videogame console and software that SCEA claimed could be used to circumvent the security system in the console and allow the playing of pirated videogames. Hotz denies any wrongdoing on his part. Hotz’s motion to dismiss for lack of personal jurisdiction was still pending before the federal court in San Francisco but a preliminary injunction was issued requiring Hotz to take down the postings challenged by SCEA.

“We want our consumers to be able to enjoy our devices and products in a safe and fun environment and we want to protect the hard work of the talented engineers, artists, musicians and game designers who make PlayStation games and support the PlayStation Network,” added Russell. “We appreciate Mr. Hotz’s willingness to address the legal issues involved in this case and work with us to quickly bring this matter to an early resolution.”

A cynic might argue that SCEA saw the handwriting on the wall and preferred not to take its chances any more in court. But I don't believe in cynicism. Just in really careful and complete research that sometimes is sufficient to foreshadow what is likely to happen in a court of law.

: )

And here are some court documents:

127 - Filed & Entered: 04/11/2011
Stipulation
Docket Text: STIPULATION TO FINAL JUDGMENT UPON CONSENT AND PERMANENT INJUNCTION by Sony Computer Entertainment America LLC. (Gilliland, James) (Filed on 4/11/2011)

128 - Filed & Entered: 04/11/2011
Notice of Voluntary Dismissal
Docket Text: NOTICE of Voluntary Dismissal OF DEFENDANTS HECTOR MARTIN CANTERO, SVEN PETER, AND DOE DEFENDANTS 1-100 WITHOUT PREJUDICE by Sony Computer Entertainment America LLC (Gilliland, James) (Filed on 4/11/2011)

Here's the meat of the stipulation:
On March 31,2011, Hotz met with SCEA representatives and the Parties entered a confidential Memorandum of Understanding, agreeing to settle the dispute between them. As a part of that settlement, SCEA and Hotz have agreed to the entry of this Final Judgment Upon Consent and Permanent Injunction ("Judgment" upon the stipulated facts. Each party has waived the right to appeal from this Judgment. Each party wil bear its own fees and costs in connection with this action. The Parties further agree that any violation of this Judgment by Hotz would cause irreparable harm to SCEA and, if such a violation occurs, SCEA wil be entitled to immediate relief....

IT IS HEREBY ORDERED AND ADJUDGED by consent of the Parties that Hotz, whether as an individual or as a principal, officer, director or employee of any business entity, and his agents, servants, employees, distributors, suppliers, representatives and all other persons or entities acting in concert or participation with Hotz who receive notice of this Judgment, shall be and hereby are permanently enjoined and restrained from:

A. Engaging in any unauthorized access to any SONY PRODUCT under the law;

B. Engaging in any unauthorized access to any SONY PRODUCT under the terms of any SCEA or SCEA AFFILIATES' license agreement or terms of use applicable to that SONY PRODUCT, whether or not Hotz has accepted such agreement or terms of use, including without limitation:

(i) reverse engineering, decompiling, or disassembling any portion of the Sony Product;

(ii) using any tools to bypass, disable, or circumvent any encryption, security, or authentication mechanism in the Sony Product;

(iii) using any hardware or softare to cause the Sony Product to accept or use unauthorized, illegal or pirated softare or hardware; and

(iv) exploiting any Sony Product to design, develop, update or distribute unauthorized softare or hardware for use with the Sony Product. If any term of such SCEA or SCEA Affilates' license agreement or terms of use applicable to that Sony Product shall be determined by Congress or by a court of law in a final non-appealable decision in an action to which SCEA or an SCEA Affiliate is a party to be illegal and unenforceable, then such term shall not be binding on Hotz.

C. CIRCUMVENTING any of the TPMs or security in any SONY PRODUCT;

D. TRAFFICKING in any technology, product, service, device, component, or part thereof that, at the time of Hotz's trafficking, circumvents any of the TPMs or security in any SONY PRODUCT, including but not limited to the Ellptical Curve Signature Algorithm ("ECDSA") Keys, encryption andlor decryption keys, dePKG firmware decrypter program, Signing Tools, 3.55 Firmware Jailbreak, andlor any other technologies that enable unauthorized access to andlor copying of the PS3 System andlor enable compatibility of unauthorized copies of other copyrighted works with the PS3 System.

E. Distributing or posting any SCEA or SCEA Affiliates' confidential or proprietary information relating to any SONY PRODUCT;

F. Knowingly assisting or inducing others to engage in any of the conduct set forth in A-E above solely directed at any SONY PRODUCT or that otherwise constitutes contributory liabilty under the law.

IT IS FURTHER ORDERED AND ADJUDGED that any violation of this Injunction and Order by Hotz shall result in his payment of stipulated liquidated damages in the amount of ten thousand dollars ($10,000) per violation at the election of SCEA or SCEA's Affiliates. In the event that the violation involves distribution or TRAFFICKING by Hotz of softare, hardware, or any CIRCUMVENTION DEVICE, or knowingly assisting the same, each distribution of said softare (including downloads via the Internet), hardware, or CIRCUMVENTION DEVICE shall.constitute an independent violation, up to a cap of two hundred and fifty thousand dollars ($250,000). Such liquidated damages shall be an optional alternative to demonstrating actual or, if relevant, statutory damages.

IT IS FURTHER ORDERED AND ADJUDGED that any action or proceeding (other than a declaratory judgment action) that may be brought by SCEA or SCEA Affilates against Hotz arising out of, in connection with or by reason of the Parties' Settlement Agreement or this Judgment or to enforce the terms and conditions of the Parties' Settlement Agreement or this Judgment, shall be brought in the United States District Court for the Northern District of California. The Parties further agree that any action or proceeding (other than a declaratory judgment action) that may be brought by Hotz against SCEA arising out of, in connection with or by reason of the Parties' Settlement Agreement or this Judgment or to enforce the terms and conditions of the Parties' Settlement Agreement or this Judgment, shall be brought in the United States District Court for the District of New Jersey or the state in the United States of Hotz's current permanent residence. The Parties agree to waive any venue or jurisdictional challenges consistent with this paragraph. The Parties further agree that the laws of the state of California shall govern to the exclusion of the law of any other forum in any action or proceeding brought by any party arising out of, in connection with or by reason of the Parties' Settlement Agreement or this Judgment or to enforce the terms and conditions of the Parties' Settlement Agreement or this Judgment.

IT IS FURTHER ORDERED AND ADJUDGED that entry of this Judgment shall conclude this action to the prejudice of any and all claims or cross-claims deemed merged and barred in accordance with the law.

The undersigned hereby stipulate to the above facts and conclusions and consent to the entry of this Judgment, which may be signed in counterparts. Signatures can be obtained and exchanged by facsimile.

IT IS SO STIPULATED.

Update: From the New Yorker, May 7, 2012:

Last May, engineers from Sony invited Hotz to a meeting at its American headquarters, a half hour’s drive north, in Foster City. (“We are always interested in exploring all avenues to better safeguard our systems and protect consumers,” Kennedy told me.) Nervous but curious, Hotz walked into the building eating from a box of Lucky Charms, dropping marshmallows across the lobby. “If there were going to be lawyers there,” he recalled, “I was going to be the biggest asshole ever.” Instead, he found a roomful of PS3 engineers who were “respectful,” he said, and wanted to learn more about how he had beaten their system. During the next hour or so, the man who had started the hacker wars described his methodology.

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