The Federal Court of Australia has dismissed the movie industry's appeal against a 2010 ruling which found that Internet service provider iiNet is not responsible for copyright infringements carried out by its file-sharing customers. iiNet boss Michael Malone described the decision as a relief while AFACT boss Neil Gane said "it cannot be right" that the ISP takes no responsibility.

The Full Bench of the Federal Court in Australia has just dismissed the movie industry’s appeal against last year’s judgment which found that ISP iiNet did not authorize the copyright infringements of its file-sharing customers.

Represented by anti-piracy group AFACT, nearly three dozen Hollywood and local studios took iiNet to court in 2008. In a 2009 trial the ISP was accused of doing nothing to stop its customers downloading films and TV shows but in February 2010 the Federal Court decided that iiNet was not responsible for their activities. An appeal was heard later that year and today the decision was handed down.

Justice Emmett said that the Court continued to agree that the rights of the movie companies had been infringed but could not find in their favor.

“While I disagree with the primary judge’s reasoning in significant respects, I am nevertheless of the opinion that his Honour’s decision to dismiss the proceeding was correct,” the ruling reads. “In my opinion the appeal should be dismissed.”

The ruling itself is an absolutely huge affair and will take a considerable time to digest, but at this early stage it seems quite clear that even after two years of legal battles, this fight is probably still not over.

“Even though the Copyright Owners are not entitled to the relief claimed in this proceeding, it does not follow that that is an end of the matter. It is clear that the questions raised in the proceeding are ongoing,” the ruling reads.

“It does not necessarily follow that there would never be authorisation within the meaning of s 101 of the Copyright Act by a carriage service provider, where a user of the services provided by the carriage service provider engages in acts of infringement such as those about which complaint is made in this proceeding.

“It does not necessarily follow from the failure of the present proceeding that circumstances could not exist whereby iiNet might in the future be held to have authorised primary acts of infringement on the part of users of the services provided to its customers under its customer service agreements.”

Nevertheless, on the thorny demand by AFACT that iiNet should have blindly sent out warnings and suspend customer accounts based on the information it provided, the ruling is clear.

“I do not think [iiNet] could reasonably be expected to issue warnings, or to terminate or suspend particular accounts, in reliance upon any such notice in circumstances where it has been told nothing at all about the methods used to obtain the information which lead to the issue of the notice,” it reads. “Nor should it be up to the respondent to seek out this information from a copyright owner who chooses not to provide it in the first place.”

iiNet chief executive Michael Malone said he was “relieved” at the outcome.

“Our original contention was upheld that we don’t believe we ever authorised or did anything to encourage customers to breach copyright,” he said. “We’ve won at the lower court, we’ve won at the Federal Court now in the appeal, but all this legal action hasn’t stopped one customer from downloading anywhere in Australia.”

“Same as we said last time, invite the rights holders back, let’s make the content available legally and legitimately so customers can get access to it, and let’s find a better way to be able to police those who don’t do the right thing.”

Malone went on to state that the overall problem of deciding to what extent ISPs can be held liable will have to be solved by the government.

AFACT boss Neil Gane was clearly disappointed at the decision.

“It cannot be right that, in effect, the ISP, who has the power to prevent copyright infringement online and admitted they were taking place, does not share the responsibility to stop them,” he said. “Copyright infringement now goes on unabated on the Internet.”

While Justice Emmett and Justice Nicholas dismissed the appeal, Gane said he was encouraged that Justice Jagot had sided with the movie industry.

“We take heart however, that Justice Jagot found for us and that Justice Emmett said that we were successful on many grounds.

“We will be taking our time now to examine the judgment in detail and consider all of our options.”

It is widely believed that the case will now proceed to Australia’s High Court.