Sony is taking legal action against a group of hackers that has uncovered the security codes for the PlayStation 3 gaming console.
A lawsuit filed at the Northern District Court of California claims that the hack, which potentially allows any software to be run on the console, constitutes copyright infringement and computer fraud.
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Hotz and more than 100 people associated with fail0verflow are named in the lawsuit, which calls for a ban on Hotz from further hacking and hacking code distribution.
Hotz is best known for demonstrating the first hardware unlock of Apple's iPhone in 2007. He released unlock code for the iPhone 3G and 3GS in 2009.
In a statement on fail0verflow's website the group said it has never condoned, supported, approved of or encouraged videogame piracy.
The group also denied publishing any encryption or signing keys, Sony code, or code derived from Sony's code.
The group maintains that the hack was aimed at enabling users to install other operating systems and amateur software on the console.
Sony has indicated that it will attempt to fix the hack by updating the PS3's software over the internet.