Sony and hacker George Hotz, better known as geohot, have been involved in a lawsuit since Hotz jailbroke the PS3 and posted his exploits online.  The PS3 had been notoriously hard to crack, and Hotz’s accomplishment allowed owners to bypass many of the PS3′s internal security measures.  Sony sued Hotz for computer fraud and copyright infringement among other things.

On January 27th, Sony won a temporary restraining order that barred Hotz from distributing any information on the hack and also forced him to surrender his computer and materials to Sony.  Due to issues regarding proper venue for the suit, last month Sony was granted access to the IP addresses of users who visited Hotz’s blog in order to establish jurisdiction.

This battle has spawned outrage from people who see Hotz’s first amendment rights trampled by a large corporation with enormous resources.  Many question the right Sony or any corporation has to influence the use of personal property – basically if you buy it, it’s yours, end of question.

Today, Sony and Hotz have posted a joint statement on the PlayStation blog.  In the statement, we learn that the two came to an agreement rather quietly on March 31st.  In the agreement, Hotz is permanently banned from disseminating his methods for hacking the PS3.

Sony Computer Entertainment America (“SCEA”) and George Hotz (“Hotz”) today announced the settlement of the lawsuit filed by SCEA against Hotz in federal court in San Francisco, California. The parties reached an agreement in principle on March 31, 2011. As part of the settlement, Hotz consented to a permanent injunction.

Both parties expressed satisfaction that litigation had been quickly resolved. “Sony is glad to put this litigation behind us,” said Riley Russell, General Counsel for SCEA. “Our motivation for bringing this litigation was to protect our intellectual property and our consumers. We believe this settlement and the permanent injunction achieve this goal.”

“It was never my intention to cause any users trouble or to make piracy easier,” said Hotz, “I’m happy to have the litigation behind me.” Hotz was not involved in the recent attacks on Sony’s internet services and websites.

In the action, SCEA accused Hotz of violating federal law by posting online information about the security system in the PlayStation 3 videogame console and software that SCEA claimed could be used to circumvent the security system in the console and allow the playing of pirated videogames. Hotz denies any wrongdoing on his part. Hotz’s motion to dismiss for lack of personal jurisdiction was still pending before the federal court in San Francisco but a preliminary injunction was issued requiring Hotz to take down the postings challenged by SCEA.

“We want our consumers to be able to enjoy our devices and products in a safe and fun environment and we want to protect the hard work of the talented engineers, artists, musicians and game designers who make PlayStation games and support the PlayStation Network,” added Russell. “We appreciate Mr. Hotz’s willingness to address the legal issues involved in this case and work with us to quickly bring this matter to an early resolution.”

What do you think about the Sony / Geohot suit?  Is it a first amendment issue? Let us know how you feel.