The High Court appeal was based on two issues. The first was whether the “mod-chip” bypasses the digital rights management on the console and breaches Section 116A of the Australian Copyright Act. The court accepted Stevens' argument that while making a pirated copy of a game is illegal, playing a game by using a mod-chip is not.

The second issue was whether playing a game - which requires copying data to a console's Random Access Memory or RAM - breaches copyright when the manufacturer does not specifically grant a licence to copy this data to RAM. The court held that by merely playing a Playstation game, the consumer was not making an illegal copy of the game.