Opposition communications spokesman Nick Minchin and the shadow attorney-general, George Brandis, launched a joint attack on Senator Conroy today, calling his conduct "grossly improper" and accusing him of expressing a partisan view regarding potential evidence in iiNet's defence. They said the comments had the potential to "prejudice a matter before the Federal Court".

iiNet's lawyers, Herbert Geer, said they were "particularly surprised" by Senator Conroy's comments, as the telco had not yet filed its defence and evidence on key aspects of the case. "We hope that all parties will allow the legal process to run its course. We'll do our talking in court and allow iiNet's defence to be judged by the judiciary," said partner Graham Phillips. In response to the criticisms, Senator Conroy said: "Senator Minchin needs to get a sense of humour or, more importantly, a broadband policy."

In a landmark case that will have far-reaching implications for ISPs and internet users, seven major movie studios and the Seven Network are suing iiNet in the Federal Court for allegedly allowing its users to download pirated movies and TV shows. The case is set for a formal hearing about October.

"I saw iiNet's defence in court under oath ... they had no idea their customers were downloading illegally music or movies. Stunning defence, stunning defence," Senator Conroy said. "I thought a defence in terms of 'we had no idea' ... belongs in a Yes Minister episode." Phillips said the case involved complex facts and evidence, and complicated legal issues, which had not been tested before the courts. He said he was confident that iiNet had a strong defence.

'Senator Conroy's comments were both reckless and irresponsible; particularly considering iiNet was yet to even file that aspect of its defence and has every right to a fair hearing," Senator Minchin said. Senator Brandis said: "A senior Cabinet Minister of all people should know better. It is totally unacceptable and could prejudice a matter before the court and damage the company's reputation in the eyes of the public."

With rumours that the Prime Minister, Kevin Rudd, will reshuffle his ministry after the budget, Senator Conroy, whose internet filtering and national broadband network policies are in disarray, may be vulnerable. Furthermore, Senator Conroy was one of 39 Labor MPs who voted against Rudd in his leadership battle with Kim Beazley. iiNet has said in court the case brought by the movie studios was "like suing the electricity company for things people do with their electricity".

In court last week, the telco steadfastly refused to admit that any of its users engaged in illegal downloading, despite forensic evidence presented by movie studios that apparently shows the date and time of thousands of individual copyright infringements. They foreshadowed possible arguments that infringements did not occur, by questioning whether transferring files over BitTorrent on a "one-to-one" basis was equivalent to making them "available to the public" under copyright law.

They also claimed that, because files are broken up into tiny "packets" before being sent over BitTorrent, this may not be enough to suggest a "substantial portion" of a copyrighted file was distributed. Gilbert and Tobin, which is representing the movie studios in the case, declined to comment on Senator Conroy's remarks.