The Australian music industry will keenly watch developments this week as Internet service provider iiNet's copyright infringement trial enters another phase at the Federal Court.

Perth-based iiNet will on Thursday (Feb. 5) file its Federal Court defense in what industry observers see as a potentially fascinating test of Australia's copyright law in the digital age.

A coalition of film and TV companies under the Australian Federation Against Copyright Theft (AFACT) banner lodged the suit against iiNet last November, claiming the ISP did not take reasonable steps to disconnect users who were illicitly sharing film and TV content using BitTorrent software on its networks.

AFACT is suing for unspecified damages, and wants iiNet - the country's third biggest ISP - to terminate the account of users who share copyright-infringing content.

The action was filed by Village Roadshow, Universal Pictures, Warner Bros Entertainment, Paramount Pictures, Sony Pictures Entertainment, Twentieth Century Fox Film Corporation, Disney Enterprises, Inc. and the Seven Network, the Australian licensee of some of the infringed works.

On this particular litigation, however, the music industry has taken a back seat.

"There's a high level of interest in the case, but in a way I'm glad it's them (AFACT) and not us," comments one high-ranking label executive who spoke with Billboard.biz.

"The Australian music industry has had an interest in some time to get ISPs to take some responsibility for what they're doing. One option has always been suing the ISP. We looked at that and felt we were better at engaging with government in getting a change in the legislation. The film industry took a different view and decided to sue an ISP."

A directions hearing in the iiNet case will follow on Friday (Feb. 6).