In the first case of its kind, an Australian court has ruled that an internet service provider cannot be responsible for illegal downloading.

iiNet, Australia's third largest ISP, was taken to court by a group of 34 movie production houses.

The group included the Australian divisions of Universal Pictures, Warner Brothers and 20th Century Fox.

They claimed that iiNet was guilty of copyright infringement for not preventing illegal downloads of films.

The movie group hired investigators to track the numbers of iiNet customers using BitTorrents to illegally download movies.

They wanted iiNet to warn the offenders and then cut them off if they continued to download. The group also wanted certain websites to be blocked by the ISP.

However, the judge ruled iiNet was not responsible for the online behaviour of its customers.

"I find that the mere provision of access to the internet is not the 'means' of infringement," said Federal Court Justice Dennis Cowdroy.

"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."

In Italy, meanwhile, the government is proposing new laws which would make video channels such as YouTube directly responsible for copyright infringement if their users upload copyrighted material.

The proposals would require YouTube, owned by Google, to acquire a broadcasting licence in order to operate.