An Internet service provider has won its "3 strikes" legal battle with the music industry. The Irish Recorded Music Association - Warner, Universal, Sony and EMI - had tried to force UPC to disconnect subscribers who they claim had been caught illegally sharing files. UPC refused and today it was announced that the ISP has won its fight.

In February 2009, IRMA – representing EMI, Sony, Universal and Warner – reached an out of court settlement with Ireland’s largest ISP, Eircom.

The deal would see the ISP introduce a 3 strikes system for dealing with subscribers who share songs to which the labels own the copyright. The implementation of the agreement was held up over legal argument, but in April this year the High Court in Dublin gave it the green light.

Part of the private agreement between IRMA and Eircom required that the ISP should not be put at a competitive disadvantage through this 3 strikes set up. That meant that IRMA would have to go after other ISPs to force them to do the same.

Among others, IRMA sought agreement from UPC, but the ISP refused to play ball and the case went to the Irish High Court. Today the result of that action was announced and for the record labels and Eircom, the result was bad news.

In a judgment published today, Mr Justice Peter Charleton acknowledged that recording companies were being harmed by Internet piracy but that laws to cut off file-sharers were not enforceable in Ireland.

“It is not surprising that the legislative response laid down in our country in the Copyright and Related Rights Act 2000, at a time when this problem was not perceived to be as threatening to the creative and retail economy as it has become in 2010, has made no proper provision for the blocking, diverting or interrupting of internet communications intent on breaching copyright,” began the judgment.

Justice Charleton noted that by not having this legislative mechanism in place, Ireland is not in compliance with its obligations under European law. He added that the only thing the courts can force an Internet host to carry out is the removal of infringing material.

“UPC has repeatedly stressed that it does not condone piracy and has always taken a strong stance against illegal activity on its network,” the company said in a statement.

“It takes all steps required by the law to combat specific infringements which are brought to its attention and will continue to co-operate with rights holders where they have obtained the necessary court orders for alleged copyright infringements.”

“Our whole premise and defence focused on the mere conduit principle which provides that an internet service provider cannot be held liable for content transmitted across its network and today’s decision supports the principle that ISPs are not liable for the actions of internet subscribers.”

The ruling leaves the music industry high and dry in Ireland and Eircom in the unfortunate position of being left at a commercial disadvantage. It will be interesting to see how the record labels and ISP handle this development.