Internet service providers cannot be required by national courts to install filters that would prevent the illegal downloading of files, an EU court said today.
The ruling is a blow to artists who had sought to have their intellectual property rights protected.
"EU law precludes the imposition of an injunction by a national court which requires an internet service provider to install a filtering system with a view to preventing the illegal downloading of files," the EU Court of Justice in Luxembourg said in a statement after today's ruling.
SABAM, a Belgian company representing writers, composers and editors, established in 2004 that users of an internet service provider called Scarlet Extended SA were illegally transferring files.
A Belgian court last year sought the EU top tribunal's guidance on whether forcing an ISP to stop illegal file sharing on its network is in line with the EU's rules.
But the Court of Justice of the European Union ruled today that this would require monitoring of all electronic communications of all of Scarlet's customers, infringing on their rights, and violated EU law.
The ruling may also have some impact in Ireland. In 2009, High Court judge Mr Justice Peter Charleton granted an injunction instructing Eircom to block controversial website Pirate Bay, which provides links to locations where copyrighted material such as music can be downloaded for free. Its activities have been the subject of numerous lawsuits.
The injunction was part of a settlement with record labels that saw the telecoms operator implement a "three strikes" rule that would see persistent file sharers cut off from its broadband service.
The Internet Providers Association of Ireland said the ruling set an "extremely important precedent" for ISPs, and would undoubtedly be seen as a landmark judgment.
"This outcome is of particular importance for us since the Department of Jobs, Enterprise and Innovation in June tabled wording for a statutory instrument which would purportedly bring Ireland into line with its European obligations under the copyright and e-commerce directives," the group said in a statement.
"The injunctions regime provided for in the broad wording of the proposal, however, could potentially encompass not only blocking but mass filtering obligations and furthermore, the eventual introduction of a graduated response system is not inconceivable in these conditions. Today’s ruling will certainly set limits on this."
Agencies