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Judge Pares Claims From Playstation Fraud Suit

SAN FRANCISCO (CN) - Sony's efforts to curtail Playstation 3 owners from installing Linux or other operating systems on its popular entertainment console may be warranted, a federal judge ruled, dismissing most claims in a class action with leave to amend.

According to a complaint filed last April, the electronics giant backed out of a "promise" to allow owners to operate the entertainment system much like a computer.

The lawsuit, seeking class action status for all PS3 owners, lists eight claims against sole-defendant Sony, including breach of warranty, unfair competition and computer fraud. Only one count, violation of the Computer Fraud and Abuse Act, still stands after the Feb. 17 ruling from U.S. District Judge Richard Seeborg.

Central to class's argument is PS3's much-hyped "OtherOS," an operating system installer that Sony allegedly started touting during the rollout of PS3 in 2006.

Celebration of the software came to a halt when 20-year-old George Hotz, or geohot as he was known online, hacked a PS3 in early 2010. His "jailbreak" prodded Sony to swiftly release a software update disabling OtherOS and frustrating PS3 owners, the complaint states.

Hotz said that his modification allowed users to run unrestricted versions of Linux, harnessing control of the console's information and graphics processors. The control allows users to play pirated games and run software that emulates earlier Playstation versions, among other expanded options - all practices that Sony strictly forbids.

Sony said that owners were given an option to upgrade PS3 firmware or keep OtherOS, the ruling states. But the plaintiffs contend that they had no choice.

Without Firmware Update 3.21 or later, PS3 users have limited access to online features, entertainment and new games.

Seeborg roundly dismissed the plaintiffs' claims for failure to state a claim.

"While it cannot be concluded as a matter of law at this juncture that Sony could, without legal consequence, force its customers to choose either to forego installing the software update or to lose access to the other OS feature, the present allegations of the complaint largely fail to state a claim," Seeborg wrote.

"Accordingly, with the exception of one count, the motion to dismiss will be granted, with leave to amend," he continued.

The court granted the plaintiffs until early March to amend the dismissed claims.

Ironically, Sony is currently pursuing the hacker, Hotz, on the same charge that Seeborg left in tact, violation of the Computer Fraud and Abuse Act, in the same district.

The plaintiffs claim that Sony officials said that the PS3 "is clearly a computer," allowing users to "play games, watch films, browse the web, and use other computer functions."

Seeborg found, however, that the statements could not be taken as a "promise," an "affirmation of fact" or a "description of the goods." As such, they failed to meet breach of warranty statutes.

In amending false advertising charges, Seeborg wrote that the "plaintiffs must more clearly identify the particular representations on which they rely, and articulate why they were false or misleading."

They failed to adequately plead conversion charges because they did not show "that Sony assumed control or ownership of any of plaintiffs' property, or applied any such property to its own use," the judge added.

He also declined Sony's motion to strike the suit's class action status.

The plaintiffs' amended complaint must be filed by Friday, March 11.

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