INTERNET service provider iiNet has won a major legal battle over whether it should be held responsible for its customers downloading content illegally.

An appeal by the world's largest film and television companies against iiNet was dismissed today by the High Court.

A group of 34 international and Australian companies, including Warner Bros, Disney and the Seven Network, had alleged that iiNet had authorised the infringement of their copyright when its customers downloaded movies and television programs.

The movie companies had argued that iiNet had the power to prevent its customers from infringing copyright by issuing warnings and suspending or terminating customer accounts.

The Australian Federation Against Copyright Theft (AFACT) appealed to the High Court after losing its first appeal to the federal court last year.

But today the High Court found that iiNet had no direct technical power to prevent its customers from using the BitTorrent file sharing system to infringe copyright.

"Rather, the extent of iiNet's power to prevent its customers from infringing ... copyright was limited to an indirect power to terminate its contractual relationship with its customers," the court said.

iiNet Chief Executive Officer, Michael Malone, said the judgment supported the company’s position and proved the claims made against it were unfounded.

"iiNet has never supported or encouraged unauthorised sharing or file downloading,” Mr Malone said

"Today’s High Court five-nil ruling confirms that iiNet is not liable for ‘authorising’ the conduct of its customers who engaged in online copyright infringement.

"This marks the end of more than three years of legal argument and challenges."

Mr Malone said increasing the availability of lawful, online content in a more timely, affordable and reasonably priced manner, brought the focus back to customers and was the best method to protect content owners’ copyright.

He said there was strong evidence that content partnerships and agreements between ISPs, legal websites and copyright holders had done more to reduce piracy and to showcase copyright holders’ materials than this unproductive legal battle.

The High Court dismissed the appeal with costs. Legal costs of the case to date are approximately $9 million and have already been expensed.