Is it legal to unlock artificially limited hardware yourself?

Question

Some companies sell hardware that is limited by some means, so that they can charge for upgrades.

For example some Tesla cars have batteries with some capacity unavailable to the user unless they pay for an upgrade, which involves sending a command to the car. Back in the day, some computer systems shipped with hardware that was disabled by a jumper, and the owner could pay for a technician to move the jumper and unlock the extra performance or features.

Is it legal to unlock such hardware yourself? Obviously you may end up voiding warranties, losing on-going support from the manufacturer, or there may be a contract you agreed to stating that you won't do it, but assuming none of that is relevant (e.g. a salvaged Tesla doesn't get support/warranty anyway) is there any law preventing you from modifying your property to remove the limits placed on it?

Mainly interested in UK and US perspective, but fee free to consider other legal systems.

Answer 1

Obviously you may end up voiding warranties, losing on-going support from the manufacturer, or there may be a contract you agreed to stating that you won't do it, but assuming none of that is relevant (e.g. a salvaged Tesla doesn't get support/warranty anyway) is there any law preventing you from modifying your property to remove the limits placed on it?

This assumes away one of the biggest issues, which is doing this is almost certainly a breach of contract unless the contract term is void as against public policy (which it probably isn't). So, the manufacturer can sue you for money damages probably equal to the difference in value between the limited and unlimited hardware in the marketplace. The manufacturer might also be able to obtain an injunction against this practice, which could result in the incarceration of someone who knowingly violated this court order for contempt of court, once an injunction is secured from a court to enforce the contract.

There is also an anti-hacking statute in the United States, whose plain language appears to prohibit taking actions that override a digital system's security features. Unlocking these hardware features would appear to violate this statute. This is part of the Digital Millennium Copyright Act (DMCA) and is codified at United States Code Title 17, Section 1201. As Wikipedia explains:

17 U.S.C. 1201 is often known as the DMCA anti-circumvention provisions. These provisions changed the remedies for the circumvention of copy-prevention systems (also called "technical protection measures") and required that all analog video recorders have support for a specific form of copy prevention created by Macrovision (now Rovi Corporation) built in, giving Macrovision an effective monopoly on the analog video-recording copy-prevention market. The section contains a number of specific limitations and exemptions, for such things as government research and reverse engineering in specified situations. Although, section 1201(c) of the title stated that the section does not change the underlying substantive copyright infringement rights, remedies, or defenses, it did not make those defenses available in circumvention actions. The section does not include a fair use exemption from criminality nor a scienter requirement, so criminal liability could attach to even unintended circumvention for legitimate purposes.

The statute is quite lengthy and full of technical definitions and narrow exceptions and exceptions to exceptions to the general rule.

These legal issues have mostly gained media attention in the context of farmers who seek to hack into the built in software of their farm machinery in order to repair it where the manufacturing companies have not cooperated. There have been legislative fixes proposed that would make these prohibition void as against public policy for some specific purposes like doing repairs. There have also been efforts to characterize this kind of business practice as an anti-trust violation. But, none of that legislation has passed in the United States, to the best of my knowledge and belief.

But, I am not aware of any high profile legal precedent that has addressed this point but I wouldn't rule out the possibility that there is one. The closest case I could find on point (from the High Court in Australia) is Stevens v. Sony, which holds "that a device allowing PlayStations to play games with a different region code did not violate the anti-circumvention laws, because the mechanism in the PlayStation did not directly prevent the infringement of copyright."

I am not personally familiar with non-U.S. law on this topic. Wikipedia reviews some of the applicable law in the E.U. and Australia.

According to this Wikipedia entry, pursuant to European Directive 2001/29/EC of the European Parliament and of the council of May 22, 2001 on the harmonisation of certain aspects of copyright and related rights in the information society, E.U. member nations must adopt domestic anti-circumvention statutes that meet certain minimum E.U. standards set forth in the directive.

Also according to the same Wikipedia entry: "Australia prohibits circumvention of "access control technical protection measures" in Section 116 of the Copyright Act." In Australia, "Penalties for violation of the anti-circumvention laws include an injunction, monetary damages, and destruction of enabling devices."

Answer 2

In modern hi-tech reality, tangible things are more and more often designed to keep consumers engaged with the vendor, as opposed to let them get away and do whatever they want with the things. The vendors and their associates want to keep people paying even though the things have been purchased, not leased. Modifying the hardware lets you off this hook. Of course the vendors are not going to like it and will attempt to make/prove it illegal.

Your main defence is the very fundamental rights of property ownership: if a physical thing is yours, you can do whatever you want with it so long as you do not cause loss to others. You can destroy your house so long as you do not damage the property of your neighbours. You can disassemble your Tesla car into pieces, crush them and throw away so long as you do not damage the environment or otherwise violate waste regulations. Modern hardware/software/digital vendors attempt to challenge these rights by lobbying ugly laws like Section 1201 of the DMCA which is contended to be unconstitutional.

Setting aside those attempts to oppress property ownership rights, the question here is: what is the effect of you unlocking the extra battery capacity yourself? You kill your warranty, which you are perfectly allowed to do. You burn the engagement bridge with Tesla which will never enter into another contract with you in respect of this particular car (e.g. "upgrade"). Essentially, all you do is reject a new potential contract with Tesla. Is this illegal? No. You are free to enter or not to enter into contracts.

However, the situation changes radically if you make the unlocking technique available to others (e.g. publish it, provide "upgrade" services to Tesla car owners etc.). Doing so will cause real loss to Tesla which it will claim and win.