A blog reader has passed along a legal demand letter they recently received from Smart & Biggar, a leading Canadian IP law firm, representing the Entertainment Software Association.  The letter focuses on the sale of modification devices – frequently referred to as "mod chips" that can be used to modify or alter store-bought video games or play infringing copies of those games.  Mod chips have been rendered illegal in the U.S. and U.K., while Australia's High Court upheld their legality in 2005 (the law was changed under pressure from the U.S. last year).

The letter argues that the ESA has both trademark and copyright rights in the video games.  In addition to pointing to Section 27 of the Copyright Act as governing the sale or distribution of unauthorized software, the applicability of criminal offences under Section 42 of the Copyright Act, and the fraud provisions of the Criminal Code, it claims:

"any use, offer for sale or sale of modification devices, or 'mod chips' to permit circumvention of our clients' consoles security systems to play pirated or counterfeit software, is also an offence and constitutes direct or indirect infringement of our clients' intellectual property rights by inducing and procuring infringement by others of our client's aforesaid rights."

Given that the letter makes no reference to patent rights, the intellectual property referred to in this sentence is presumably copyright.  This raises at least two issues. 

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