Thirty-four movie studios today appealed a crucial Australian ruling which found that ISPs have no obligation to act on letters that allege copyright infringement by subscribers.

iiNet, the third-largest ISP in Australia, received tens of thousands of such notices, but its policy was to treat them all as mere allegations until a judge had ruled that "infringement" actually took place. Disconnecting or otherwise sanctioning its own customers without this judicial oversight would essentially make the ISP a copyright cop—a notoriously tough job, and one that was outside the company's realm of expertise.

A federal judge agreed, writing a 200-page opinion on the case, but the studios have now appealed the ruling on 15 separate grounds. At issue is Australian law, which (like American law) does require ISPs to take action against infringers in certain circumstances. According to the Australian Federation Against Copyright Theft (AFACT), which represents the studios, the judge's ruling means that ISPs get the benefits of "safe harbor" rules without having any corresponding duties.

"This decision allows iiNet to pay lip service to provisions that were designed to encourage ISPs to prevent copyright infringements in return for the safety the law provided," said AFACT head Neil Gane in a statement today. "If this decision stands, the ISPs have all the protection without any of the responsibility."

The issue of what ISPs need to do in the "war on piracy" has been a contentious one around the world, with few ISPs willing to take action against customers without some form of legislative mandate or judicial decision. The iiNet case will help to establish the limits to ISP responsibility under existing copyright law; if the AFACT appeal fails, expect the copyright industries to seek a change in that law over the next few years.