BT has lost its battle against Hollywood as it has been forced to block web users in the UK from accessing an illegal download site, Newzbin2, following legal action by the Motion Picture Association (MPA).
Newzbin2, is a web site hosted abroad which has up to with 700,000 members and provides an index of films, music and software available for free but unlicensed download from the peer-to-peer network Usenet.
The MPA started legal action against the UK's largest ISP last month in a bid to ensure BT did not allow web users to access Newzbin2, continuing its fight against unlicensed downloads.
"In my judgment it follows that BT has actual knowledge of other persons using its service to infringe copyright: it knows that the users and operators of Newbin2 infringe copyright on a large scale, and in particular infringe the copyrights of the Studios in large numbers of their films and television programmes," said Justice Arnold, who was preceding over the case.
"It knows that the users of Newzbin2 include BT subscribers, and it knows those users use its service to receive infringing copies of copyright works made available to them by Newzbin2."
According to the ruling, BT must also use its own Cleanfeed technology, already used to block access to websites containing child sex abuse images, to prevent access to Newzbin2.
The MPA had initially tried to directly attack the web site as it originally started proceedings against Newzbin in 2010. Following the MPA's move, the site was forced to remove any material that infringed copyrights.
Defying the Hollywood Giant, however, Newbiz went into administration, despite profits of more than £360,000 in 2009.
It was subsequently sold to new owners and launched again as Newzbin 2, this time operating from the Seychelles.
The ruling of the MPA/BT case is set to be considered as a landmark as it is the first time an ISP has been ordered to block access to a website relating to illegal downloads and the MPA has already announced it is set to request other ISPs to block the site.
The claim was backed by Arnold justice who pointed out at to such an eventuality in his ruling.
"The studios have made it clear this is a test case," he said in his judgment.
"If they are successful, then they intend to seek similar orders against all the other significant ISPs in the UK."
The MPA hailed the ruling as a victory, after its tow year battle to prevent access to the web site.
"This ruling from Justice Arnold is a victory for millions of people working in the UK creative industries and demonstrates that the law of the land must apply online," said Chris Marcich, President and Managing Director (EMEA) of the MPA
"This court action was never an attack on ISPs but we do need their co-operation to deal with the Newzbin site which continually tries to evade the law and judicial sanction. Newzbin is a notorious pirate website which makes hundreds of thousands of copyrighted products available without permission and with no regard for the law."
The ruling was also greatly welcome in the industry.
"Today's result is an important victory in the battle against a commercial pirate site which refused to operate within the law. Finally, it seems we have a way to deal with rogue sites which will benefit the film industry including UK independent distributors and, more broadly, the entire creative sector," said Lord Puttnam, president of the Film Distributor's Association.
Meanwhile a BT spokesman said the judgement was "helpful" and "provides clarity on this complex issue".
"It clearly shows that rights holders need to prove their claims and convince a judge to make a court order. BT has consistently said that rights holders need to take this route. We will return to court after the summer to explain what kind of order we believe is appropriate."