YNOT – An Australian court has ruled internet service providers are not liable for copyright infringement perpetrated by their customers, even if the ISPs know about users’ illegal activities.The case is thought to be the first test of digital intellectual property law in the country. The decision was considered a major blow to copyright-protections tactics and may have global ramifications for content owners.

A group of 34 mainstream content producers including Australian divisions of Universal Pictures, Warner Bros. and 20th Century Fox sued iiNet, Australia’s third-largest ISP, claiming the service provider did nothing to stem abuse even after receiving repeated notifications its users illegally downloaded movies from the web.

In his ruling, Federal Court Justice Dennis Cowdroy said mere knowledge of the illegal behavior was not enough to confer liability on iiNet. The critical issue, he noted, was whether iiNet possessed the means to curtail the infringement. Cowdroy ruled the ISP did not.

“I find that the mere provision of access to the Internet is not the ‘means’ of infringement,” he wrote in his ruling.

According to court documents, the entertainment consortium investigated alleged infringers, then sent notices to iiNet identifying the miscreants and demanding iiNet warn them to stop, then cut off their service if the downloading continued. The consortium also demanded iiNet block websites suspected of supporting copyright violators.

In one week, the documentation sent to iiNet comprised 3,000 pages, court records indicate.

iiNet responded that it warned users about content theft, but to cut off internet access or block websites would run afoul of Australian free-speech and privacy laws.

Free-speech advocates applauded Cowdroy’s ruling as a critical victory in the battle for an open internet. Declaring ISPs liable for the actions of their users would be tantamount to ceding the web to corporate interests, they said.

“If the ISPs become responsible for the acts of their customers, essentially they become this giant and very cheap mechanism for anyone with any sort of legal claim,” David Vaile, executive director of the Cyberspace Law and Policy Center at the University of New South Wales told the Associated Press. “The ISPs become the policemen, the enforcers.

“In this case the ISPs have retained the lack of liability for the bad actions of their customers.”

Though relieved to be released of liability, iiNet said it welcomed the opportunity to work with content owners to find effective ways of addressing the piracy problem.

The studios, on the other hand, were reluctant to admit defeat. A spokesman for the group said the consortium may appeal Cowdroy’s ruling, and in any case will press for stiffer copyright laws.