Australian ISP iiNet has won a landmark Federal Court battle against the Australian Federation Against Copyright Theft (AFACT).

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Australian ISP iiNet has won a landmark Federal Court battle against the Australian Federation Against Copyright Theft (AFACT).

AFACT, representing Roadshow Films, Channel 7 and other film studios including Universal Pictures, Warner Bros Entertainment, Paramount Pictures, Sony Pictures Entertainment, Twentieth Century Fox Film Corporation, and Disney Enterprises attempted to sue iiNet for failing to act against customers downloading illegal content over the Internet via BitTorrent and P2P file sharing networks.

[Check out a timeline of the AFACT vs. iiNet case]

In handing down his verdict, Justice Cowdroy said that though there was substantial evidence of users downloading pirated content, iiNet can't be seen as "approving infringement."

"I find the mere provision of access to the Internet is not the means of infringement. Rather, the means by which the applicant's copying is infringed is in iiNet users' use of the constituent parts of the BitTorrent system. iiNet has no control over the BitTorrent system and is not responsible for the operation of the BitTorrent system," ruled Justice Cowdroy.

"I find that iiNet simply cannot be seen as sanctioning, approving or countenancing copyright infringement," he continued.

In addition to ruling in favour of iiNet, Justice Cowdroy also ruled that AFACT pay iiNet all court costs.

In a media statement released following the verdict, iiNet welcomed the Federal Court’s judgment and stressed that it has "never supported, encouraged or authorised illegal sharing or downloading of files."

"We have never supported or encouraged breaches of the law, including infringement of the Copy Right Act of the Telecommunications Act. Today’s judgment is a vindication of that and the allegations against us have been proven to be unfounded," said the statement.

"We do not and never have supported, encouraged or authorised illegal sharing or downloading of files in breach of the copyright laws. We are eager to engage with the film industry and copyright holders to make this material legitimately available."

The film studios represented by AFACT also released a statement expressing disappointment on the verdict.

"Today’s decision is a set back for the 50,000 Australians employed in the film industry," said AFACT director Neil Gane.

"But we believe this decision was based on a technical finding centred on the court’s interpretation of the how infringement’s occur and the ISPs ability to control them. We are confident that the Government does not intend a policy outcome where rampant copyright infringement is allowed to continue unaddressed and unabated via the iiNet network."

"We will now take the time to review the decision before making further comment on next steps."

It is not yet known whether AFACT will appeal the decision.

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