According to a news release issues today, ICE (Immigration and Customs Enforcement) has executed warrants related to the manufacture of mod chips that are designed to "allow users to play illegally obtained, pirated and/or counterfeit software on video game consoles including Sony's Playstation 2, Microsoft's XBOX and XBOX 360, and Nintendo's Wii." A gallery of the seized chips can be found here.
As many may know, mod chips that allow users to circumvent the anti-piracy technology in consoles are covered by the anti-circumvention provisions of the Digital Millennium Copyright Act, while a small exemption was allowed for libraries for archival purposes.
The mod chip issue has always been a rather tricky one. On the one hand, mod chips created for the express and limited purpose of circumventing copy protection shouldn't be allowed on the market. When a product has no legal purpose, that is generally the case. On the other hand, there are plenty of legitimate uses for mod chips, and to that end, the ones designed for those purposes, be that homebrew software or improved media capabilities, should be allowed to exist in the stream of commerce. Think of a mod chip like a knife. A knife can be used for the legitimate purpose of cutting open a box or chopping a vegetable, but it can also be used for the illegitimate purpose of stabbing an innocent person. Perhaps the better approach is to target the software pirates rather than the mod chip manufacturers, but by and large, the mod chip makers are probably easier to find.
It will be interesting to see which direction this ongoing "investigation" moves. I can only hope that ICE does not inadvertently harm those who were not participating in targeted software protection circumvention. It seems that the case with some technology related seizures is a lack of understanding of the technology leading to a less than accurate application of the law.