The Federal Court also found AFACT's notices were not detailed enough to show infringement that required iiNet to take action. The case was then appealed to the High Court.

The entertainment industry wanted iiNet to send its customers a warning to delete infringing content made available on BitTorrent, and if the file was still online after a week, to cut off the customer's Internet connection.

The goal of the entertainment industry in Australia was to establish "three-strikes" rules like those in countries such as France, New Zealand and South Korea, where repeat infringers are warned and eventually disconnected.

Anne Flahvin, media and communications counsel for Policy Australia, a legal and policy consultancy, said the ruling now sets "a very high bar" for copyright owners to meet in order to spur ISPs into anti-piracy actions, even more than three-strikes laws in other jurisdictions.

In light of the ruling, the entertainment industry may look to the government to pass new legislation, Flahvin said. ISPs are under less pressure now to negotiate with entertainment companies but may not want to see new anti-piracy legislation, she said.