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>> There is no copyright infringement until he profits from it.
>> he never said he was reselling the PSPs or any of the games.
Dead. F'ing. Wrong. Copyright infringement has absolutely nothing to do with making money. The person that made the software, song etc. has the RIGHT to control how COPIES are made. Distribution too. So if you make a back up copy, that is deemed one of the fair uses and an exception to the copyright holder's rights. But if you upload the ROM, download someone else's ROM, then you are violating the copyright without any money exchanging hands. If you don't think I'm right, please explain how people like Jammie Thomas who uploaded files now owes the record companies 1.92 million dollars. It certainly wasn't because she made 1.92 million dollars sharing files.
Also, many of these devices are encrypted. By using custom firmware to circumvent the existing encryption to do any of the above, you are also potentially violating the DMCA as well.
So, sweetgrego, see above. While no one is going to come after him for violating his own warranty and dorking with firmware for his device, he's potentially contributing to copyright infringement by enabling others to do it.
Uberfu, you just don't know what you're talking about. Mod chips are actually illegal in most jurisdictions because they enable people to circumvent copy control mechanisms. Plus you clearly don't know the elements of copyright infringement. Please, as nicely as I can say it, STFU. You're spreading misinformation.
And zero, if a game console is using ROMs, it is likely violating the company's copyiright. Even the ones that seem legit and are sold in the mall with 85 NES games built in are illegal if Nintendo didn't license the games. And while emulating the hardware itself is not illegal, using any ROMs you didn't make yourself of games you own is. That includes renting from the video store and ripping/downloading them.
I'm a lawyer. You all are not. If you don't believe me, look up the statutes. I'll even given you a link:
http://www.copyright.gov/title17/92chap5.html