THE COURT: So give me an example of what you would find that would be relevant to either the merits or class certification on one of the named plaintiffs’ PS3 hard drive beyond that which would be revealed by their proposal.

MS. SACKS: Well, certainly one thing we might find is whether or not any of them are engaged in the hacking that we now know was a widespread effort.

Obviously, the people in this class are the people who downloaded, or claim they downloaded the Linux operating system onto their other OS. It is beyond dispute now that there in is an ongoing effort to hack the PS3. In fact, most recently, there was an effort to hack around for update 3.21.

And these people, as members of the class, are engaged in activity that is not only prohibited under Sony’s agreements, but is illegal. So if, in fact, some of these very sophisticated users, who are included in the five named plaintiffs, are engaged in the hacking, we certainly have the opportunity to find that out.

THE COURT: What’s the legal implication if you were to find that?

MS. SACKS: I’m sorry?

THE COURT: What the legal implication to this lawsuit?

MS. SACKS: Oh. First of all, certainly, someone who is engaged in a violation of the terms of service and the licensing agreement would not be an adequate class representative. Also, someone who is engaging in activity that is injurious to Sony COmputer that is literally invading its intellectual property rights would not be common with the rest of the class.

Is everyone going to be damned by the defense that might be applicable to one of the individuals because of hacking?

THE COURT: Is that a substantive defense?

MS. SACKS: Is that a substantive defense: Yes, Your Honor, it is a substantive defense because the terms of service and the license agreement specificaly allow Sony to take action when someone has engaged in improper activity with regard to its intellectual property.

THE COURT: But how is it a substantive defense if the challenges to the overall decision, not an individualized decision, but an overall decision to implement — update 3.21, how is it a defense?

Does it mean if they actually prevail on a class basis, then an individual would be barred from participating in any class settlement because they hacked? What’s the nexus? I’m not sure I understand.

MS. SACKS: Well, part of the nexus is how can you come in and ask for damages for a property that you have basically violated? You don’t have an ownership right in the software that Sony Computer allows you to use. That’s it the whole point of the license agreement, it’s not an ownership interest, it is a privilege that Sony conveys on them. And if these people violate the terms of that licensing agreement, they have no entitlement to continued use of a software.

Plaintiffs also claim, for instance, that they can no longer get their prepaid Netflix subscriptions, they can no longer participate in the Playstation network games. Well if, in fact, someone has used this most recent hack, which allows you to circumvent 3.21, how would we know that without an examination of their hard drive? And if, in fact, they have circumvented update 3.21, how are they damaged? Because they are still running Linux.

SCEA says : “If you ever used Linux then you’re probably part of a widespread conspiracy effort to illegally hack the PS3″…. **** you