28-year-old Matthew Crippen of Anaheim now faces about 3 years in prison for allegedly running a business where he installed mod chips in Xbox consoles for customers. He was finally caught when regulators had undercover agents arrive at his store and ask for the illegal modifications. These modification usually simply involve a few soldered connections on the motherboard of the device and the addition of a chip.

The installation of a mod-chip in an Xbox allows a customer greater access to different games, permits them to run otherwise non-standard operating systems and software, and makes their experience more interesting. It also tends to void their warranty; but that would be on the owner of the Xbox, not the installer, wouldn’t it? The primary concern that federal prosecutors—and the video game industry—will claim about mod chips is that they also allow customers to circumvent copy-protection on CDs and DVDs in order to play illegally-copied video games on their consoles.

According to an article on Wired’s Threatlevel, well known mod-chip geek celebrity Andrew “Bunnie” Huang would be set to speak at Crippen’s trial, but federal prosecutors want him blocked from testifying,

The 35-year-old Huang argues that mod-chipping is not a violation of the Digital Millennium Copyright Act, which makes it unlawful to circumvent technology designed to prevent copyright infringement. He said he hopes to prove that point to jurors via a step-by-step tutorial.

“Basically, what he did was insufficient on his own to violate anything,” Huang said in a recent telephone interview from Singapore, where he serves as vice president of hardware and general manager for Chumby’s operations in Asia.

Additionally, Huang said, the DMCA should be interpreted to allow for “fair use” exemptions, so chipping a console for legitimate purposes would be permitted, even if it is found to be a circumvention.

Most laws that prevent consumers from modifying their own property do so with an eye for harmful modifications: does it make the product more dangerous? This is usually the case for regulations on how a vehicle can be modified before it is no longer roadworthy. It’s also used to block decryption chips that permit users to decipher satellite communication and get programming for free—although, hardly dangerous it does undercut the bottom line of innovators broadcasting satellite TV.

So, when it comes to modding game consoles the same sorts of arguments are trotted out through the Digital Millennium Copyright Act (DMCA) that a consumer modifying their property is therefore causing harm to the industry. Why? Because the industry told them they’re not permitted to modify the equipment they sold them. It’s what I might call the classic Maker dilemma: do you really own what you bought?

Most of the time, a mod chip installed in an Xbox or similar content doesn’t make it easy for people to run things that they would otherwise have to pay for—i.e. they cannot tap into satellite content that’s “in the air” for free but must be decrypted for a fee—but it does open up the machine to run software that the manufacturer didn’t originally intend. None of this software ever rises to the level of harm that my vehicle example suggests, but it does mean that Microsoft doesn’t get a cut of what a developer might make selling a product for a modded Xbox. Should Microsoft really have a right to a cut to everything sold to work on the Xbox? Especially after they sold me the box and it’s mine now.

Federal prosecutors in Crippen’s case have argued that the defense cannot have Huang testify because “fair use is not a defense” to a DMCA charge and therefore Huang’s “legal opinions are inadmissible.”

Cindy Cohn, legal director of the Electronic Frontier Foundation, said Crippen’s prosecution underscores a flaw in the DMCA. Every three years, the Library of Congress takes requests to grant exemptions to the law. Months ago, the librarian sided with the EFF’s bid to exempt iPhone jailbreaking from being considered illegal conduct.

“We didn’t ask for game consoles,” Cohn said. “This is why the DMCA process, it’s a pretty inefficient way to think of how the law should be.”

The case for citing “fair use” in this sort of trial will probably not work—as fair use doctrine covers a positive defense for people who are using intellectual property for commentary or parody, it doesn’t quite cover the modification of devices or circumvention of copy-protections. However, what Huang and the defense might argue instead is that the modifications to the device have a greater number of “fair use” uses (i.e. allow the device’s owner greater access 3rd-party content) than they do infringing uses—that is to say, that the mod chip doesn’t exist only to allow playing illegally-copied video game media.

In the past—notably in the case of jailbreak modifications to smart phones—it has been shown that the legitimate and extended use of property by a customer that the law already sees as a consumer right trumps the fears of the manufacturer of the device.