The Australian High Court has ruled that Internet providers have no duty to act on the copyright infringement notices they receive from rights holders. Such notices amount to mere allegations that provide no “reasonable basis for sending warning notices to individual customers containing threats to suspend or terminate those customers' accounts,” wrote the court in its ruling today (read the court's summary). The decision marks the third consecutive loss of the case for the movie studios that brought it.

Back in 2008, the Australian Federation Against Copyright Theft (AFACT) hired a company to watch BitTorrent networks for the online infringement of films, then sent a list of suspected infringers to Internet provider iiNet. Rights holders demanded that iiNet take action, passing the warnings on to its subscribers and eventually cutting off their accounts. When iiNet refused, the studios sued, claiming that the Internet provider had effectively authorized the infringement of its users.

iiNet has always insisted that an IP address does not identify a person, merely a machine, and that it could not possibly be in the business of determining who had been at a particular machine on a particular day and whether their actions amounted to copyright infringement. If the studios first took their case to a judge and obtained a ruling, that would be different.

At the first trial, iiNet CEO Michael Malone was asked whether iiNet had ever terminated a subscriber for repeat infringement. No, said Malone, it had not, because "no one had been found [by a judge] to infringe copyright"; all iiNet had were mere allegations of wrongdoing. The studios' lawyer then asked Malone if this was some kind of "joke" response. As the trial judge noted in his ruling, "The respondent’s policy was not a joke, and its conduct was entirely consistent with the policy as outlined even though it may not have been the kind of policy that the applicants anticipated."

The studios lost at trial in Australia's Federal Court in 2010. They lost again on an appeal to the Full Court of the Federal Court in 2011. And today, they lost the final time with their appeal to the country's High Court.

This has not changed their view of what the law should be, but it looks likely to lead to a push in Parliament rather than sustained action at law.

“Now that we have taken this issue to the highest court in the land, it is time for Government to act," said AFACT in a statement. "We are confident the Government would not want copyright infringement to go on unabated across Australian networks especially with the rollout of the NBN [the fiber-based National Broadband Network]."