Sony has won a permanent blank on a plug-in device that allows users to “jailbreak” their PS3s. But the code behind the device has been publicly released, albeit with a modification to limit piracy.

The dongle gets round the PS3s security blocks so that the consoles can run any software directly from the hard drive without the need for a disc to be in the machine. While this does allow users to create and play their own games, there are some fairly obvious piracy issues.

The company originally obtained a temporary injunction in Australia last week blocking three companies, Mod Supplier, OzModChips and Quantronics from importing, distributing or selling the device.

That’s now been made into a permanent ban. The ruling also means the companies must hand over all their existing stock to Sony for analysis.

Now though, a group of “modders” led by Mathieu Hervais, have released the code that powered the dongle. However, they have disabled the ability to boot an ISO file, meaning its not possible to rip a commercial disc to a PS3’s hard drive and then run it directly.

The story is likely to run for some time. Sony will have to consider whether it wants to block this code’s distribution and, if so, whether it’s either legally or practically possible to do so. There’s also the possibility of the code getting a future release complete with the ability to play ripped games, at which point the legal fun will surely begin again.