The PlayStation 3 is a compromised system. Its master key is all over the Internet, custom firmware allowing third-party software to run on the hardware is a click away, and Sony is furiously trying to stop this information from spreading. The company asked the courts for a temporary restraining order keeping those responsible from any further sharing of the keys or information about cracking the PS3, and is suing for damages.

The legal battle may be long and expensive for both sides, or it may fizzle out to nothing. The problem for Sony is that the damage has already been done, as the attorney for George Hotz, a defendant who has previously worked to unlock the iPhone, noted in a filing.

GeoHot's lawyer responds to Sony

"On the face of Sony's Motion, a [restraining order] serves no purpose in the present matter. The code necessary to 'jail break' the Sony Playstation computer is on the Internet. That cat is not going back in the bag," writes attorney Stewart Kellar. "Indeed, Sony's own pleadings admit that the code necessary to jailbreak the Sony Playstation computer is on the Internet. Sony speaks of 'closing the door,' but the simple fact is that there is no door to close. The code sought to be restrained will always be a Google search away." The argument is that there is no reason for a restraining order of any kind, as any damage that could happen to Sony has already occurred.

Kellar also argues against the Sony's assertion that the Terms of Use Agreement of the PlayStation Network gives the company the ability to pursue hackers via the California court system. The PlayStation Network was not used to crack the PlayStation 3, and the code was not shared across the network. If the service wasn't used in spreading the information or creating it, why should it give California courts jurisdiction in the case?

Hotz has a history of passively keeping his hand out when releasing exploits, in one case writing "If you want to contribute to me, the person who discovered these exploits and wrote this tool..." upon releasing an iPhone software unlock. To Sony, this is an indication that he's attempting to profit from his exploits, citing a $1 payment submitted via Hotz's site. Hotz denies he's out to make a buck. "Mr. Hotz expressly tells people on his website not to give him donations for his efforts," Kellar explained. "Even more harmful to Sony's personal jurisdiction argument, the only evidence put forward of Mr. Hotz' PayPal account appears to be a transaction initiated by the plaintiff."

Hotzs' blog is now invite-only, if he had asked for money in the past and Sony has evidence, it could prove damning to the 21 year-old hacker.

The rest of Sony's claims are torn apart in the documents filed by Kellar, but the fact remains that there is nothing legal action can accomplish at this stage: the system has been cracked and the keys and programs have been released. Indeed, Hotz is not a hacker in Kellar's eyes, but a "computer prodigy" adding functionality to a device that Sony has advertised as a computer. "Sony, through its marketing of the Playstation computer has touted its versatile ability to do more than play video games," Kellar argues. "And yet, this is the crux of Sony's argument as to why the system cannot be treated like the computer that it is."

The mod is not physical, limiting Sony's options

"If that hack works as reported, I don't believe that Sony can regain any control," Martin Walfisz, former CEO of Ubisoft subsidiary Ubisoft Massive, told GameIndustry. "And given that it seems that users won't even need a hardware mod-chip to play pirated games, I don't believe that Sony can even detect which users to lock out from PSN... Sony won't be able to stop people from running pirated game copies as long as the machines are not hooked up online." Walfisz says that PS3 piracy may be even worse than what the company experienced on the PSP.

Sony could change the system's hardware itself, but that's a very expensive proposition, and there would be the issue of making sure all existing software worked across the older systems and the units with a new root key. Sony simply does not have a good option to stem the flow of pirated games.

Even if legal action against the individuals behind the cracks is successful, what does Sony gain? The company may ruin a few lives with monetary damages, but it may never do the one thing it cares about: close the PlayStation 3.