Earlier this month we reported  on the PS Jailbreak, a modchip that has been designed to allow users to copy games directly onto the PlayStation 3’s hard drive.

A federal court in Australia, in conjuncture with Sony Computer Entertainment, has put a stop to their plans however by ordering electronic retailers stocking the device to cease distribution immediately.

An injunction has been placed against the tiny USB dongle and a hearing scheduled for tomorrow may determine the fate of the device in Australia. This could also serve as a backbone for the inevitable lawsuits that are going to arise if the dongle is offered for sale in other countries.

Online Australian retailer, Quantronics has been ordered by the court to halt sales and distribution of the PS3 modchip alongside OzModChips.com and ModSupplier.com, who were listed as respondents of Sony’s court documents.

The court order also gives Sony permission to collect and test all dongles in the resellers possession.

For more details about the modchip, check out our previous article on the subject. The dongle is said to allow users to play and copy games from the hard drive, allow custom applications to be run, supports online gaming and early reports even stated that games ran faster from the hard drive than Sony’s optical drive.