The 2005 High Court ruling in Stevens v Sony held that the region code in the PlayStation is not a 'technological protection measure', and that therefore a modchip for the PlayStation is not a 'circumvention device'. This means that Sony were not entitled to sue makes and distributors of modchips. It did not, however, mean that region codes were illegal - Sony are still entitled to use region coding (subject to any applicable restrictions of anti-competitive conduct) in their machines.
The law has changed somewhat from 2001, when Stevens v Sony was first argued. As part of the Australia - US Free Trade Agreement, there is now an argument that even region coding may constitute a 'technological protection measure' - because it prevents the copying, in RAM, of a disc while it is being played, if the disc is not licensed. The law is still unclear on this point.
What this means is that makers of Blu-ray and DVD players are still using region coding, and they're not actually prevented from doing that. However, if someone were to create, distribute, or use modchips for Blu-ray players, they might be able to rely on the precedent in Stevens v Sony and argue that their actions do not infringe Australia's anti-circumvention laws.
We are concerned that there is still a great deal of uncertainty in this area. We have lodged a number of submissions arguing that Australia's anti-circumvention laws often have the effect of protecting conduct which is designed to restrict the legitimate rights or users and restrict competition. We are watching very closely to see how the technology and the law develops. Some of the anti-circumvention provisions are subject to continuing review, and we will continue to participate in the review process. We welcome any comments from users who have been adversely affected by the region coding in these devices.