It seems Sony has hit a snag in its lawsuit against George “GeoHot” Hotz and fail0verflow. As you may recall, Sony has decided to sue members of fail0verflow for violations of the DMCA and Computer Fraud and Abuse Act over their release of an exploit for the PS3 operating system that would allow homebrew code to run. The lawsuit is seeking a restraining order to prevent the continued distribution of the exploited software.
According to Techspot, the lawsuit has hit a snag. Sony originally made the argument that because GeoHot had a Paypal account and accepted the Playstation Network user agreement, courts in California had jurisdiction over the case. District Court Judge Susan Illston disagrees, however, therefore pushing back a ruling on where the case is to be tried. There currently is no timeline for when a decision will be made.
According to GamesIndustry, Illston stated "If having a PayPal account were enough [for California to have jurisdiction], then there would be personal jurisdiction in this court over everybody, and that just can't be right. That would mean that everyone in the universe is subject to my jurisdiction."
At this point in the case, a delay is the worse thing that could happen for Sony, especially given the restraining order they've sought for keeping any information regarding the hack off the Internet. In addition to monetary damages, Sony wants any and all hardware used in development of the hack and the assiociated modified firmware.