Australian internet rights groups fear a piracy court case could force internet service providers (ISPs) to become "copyright cops" and cut web access to customers who illegally download.

The Federal Court is on Thursday expected to hand down its judgement in the case, which has pitted Hollywood and Australian film and TV producers against Australia's third-largest internet provider, iiNet.

The entertainment companies, which include Village Roadshow, Paramount Pictures Australia and Twentieth Century Fox International, say iiNet has not done enough to stop its customers illegally sharing movies on the net.

But iiNet argues it has never encouraged or authorised the illegal sharing or downloading of files in breach of copyright laws and specifically warned its users against doing so.

Electronic Frontiers Australia, which aims to protect the civil liberties of internet users, said the case goes further than any other similar case seen around the world in holding an ISP responsible for a customer's illegal activities.