Maybe if they’re outraged enough, they can make a movie about it. Thirty-four American and Australian companies, including Paramount Pictures, Viacom Inc., Village Roadshow Ltd. and Walt Disney Co., lost a piracy lawsuit in Australia last week when the nation’s top court ruled that a local Internet service provider (ISP) iiNet Ltd. wasn’t responsible for customers illegally downloading films.

The appellants, which either own or exclusively license the copyright in thousands of commercially released films and television programs, were upset that the ISP’s customers had been able to use file sharing service BitTorrent Inc.’s software to illegally download their copyrighted content, and were appealing earlier court decisions justifying iiNet. The appellants were seeking damages that could have included royalties on the downloaded content.

The High Court of Australia, however disagreed, ruling that Perth-based iiNet did not authorize infringement when its customers downloaded pirated films. The High 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.

Additionally, the High Court ruled that 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 [Australian Federation Against Copyright Theft] (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,” the High Court wrote in a statement. “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.”  

For more analysis, read Bloomberg.