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In a major victory for ISPs in Australia, the High Court has rejected the Australia's film copyright lobby's appeal of an earlier lower court judgement that ruled that ISP iiNet had not "authorised" act of infringement of copyright by not passing on infringement notices.

This is the third, and final time, that the case has appeared before court, with two previous decisions favouring with iiNet.

The AFACT (Australian Federation Against Copyright Theft) had set up a sting operation against Australia second largest Internet service provider, sending the ISP massive amounts of infringement notices. When iiNet failed to process these notices, the AFACT sued the ISP for copyright infringement. Later leaked documents via Wikileaks showed that America's film copyright lobby group, the MPAA, had been the ones pulling the strings behind the scenes.

But in a surprise turn, the AFACT lost the first round of the law suit in the Australian Federal Court, and while an appeal of that decision in front of a full bench of the same court yielded some concessions, today, Australia's highest court has finally settled matters in favour of iiNet, with no room for further appeals.

The High Court ruled that iiNet did not have the direct technical means and only had limited indirect means to prevent infringement activities on BitTorrent networks used by its subscribers, that AFACT's notices were not enough to warrant action on iiNet's part.

"The High Court unanimously dismissed the appeal. The court observed that iiNet had no direct technical power to prevent its customers from using the BitTorrent system to infringe copyright in the appellants' films. Rather, the extent of iiNet's power to prevent its customers from infringing the appellants' copyright was limited to an indirect power to terminate its contractual relationship with its customers. Further, the court held that the information contained in the AFACT notices, as and when they were served, did not provide iiNet with a reasonable basis for sending warning notices to individual customers containing threats to suspend or terminate those customers' accounts. For these reasons, the court held that it could not be inferred from iiNet's inactivity after receiving the AFACT notices that iiNet had authorised any act of infringement of copyright in the appellants' films by its customers," the ruling read.

iiNet, understandably, welcomed the decision with CEO Michael Malone stating "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."

As the appeal was dismissed with cost, iiNet will seek to recoup some of the $9m it spent defending itself from the AFACT.

The AFACT, also understandably, was not happy at the decision, and instead used it to suggest that tougher copyright laws are needed in Australia, one that would have ensured a victory for the copyright lobbying group. "The message is very clear: it is time for the government to act. The decision shows that Australian law has been left behind in overseas development in online copyright protection. In the three years since the case commenced, legislators, regulators and courts around the world have all mandated that ISPs have a central role to play in the protection of copyright infringements that are occurring across their networks," said AFACT managing director, Neil Gane.