Europe has been on a legal collision course for some time over the prosecution of copyright-infringing file-sharers. Even after a landmark decision by the European Court of Justice this week, the matter remains as confusing as ever.

On Tuesday, the court ruled that EU law – the basis for member states’ copyright protection legislation – does not compel the disclosure of individuals’ details in file-sharing cases. To be sure, it’s a tough defeat for record labels and movie studios. And, it means ISPs could be off the hook. Under the ruling, they wouldn’t be required to hand over their customers’ names should rights holders slap them with a “John Doe” subpoena.

The ruling means the right of privacy for the individual has been upheld as the governing legal principle in file-sharing prosecutions that originate in the EU, and that the EU now offers more protection in these matters than many of its member states’ national laws. The court was, in essence, asked to weigh the consumer’s right of privacy against the industry’s right to protect its intellectual property, and it came down on the side of the internet surfer. It’s a victory for the little guy and his 160 gigabyte hard drive.

But it wasn’t a complete loss for rights holders. The court did acknowledge that there is a fundamental conflict between preserving an individual’s right to privacy and a company’s right to protect its IP. Therefore, the Court of Justice advised that courts in member states should consider local laws too when meting out judgements in digital copyright cases.

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Specifically, it said: “Do not rely on an interpretation of [EU directives] which would be in conflict with those fundamental rights or with the other general principles of Community law, such as the principle of proportionality.”

It then went on to say that in civil cases, a court could in fact rule an ISP to turn in its customers, or not.

Huh? You didn’t expect Europe’s highest court to clean up this mess once and for all with one simple ruling, did you? Of course not.

The court is basically throwing the ball back to the member states to prosecute these cases as they see fit under their local laws. It provides just one nugget of guidance: the “principle of proportionality”.

But how do you define “proportionate” file-sharing? Would it be okay for consumers to download a digital copy of every song and movie they already own on DVD, CD and vinyl? Or, is it proportionate if you download movies, software, video games and music but promise not to give it away or sell it to another person? (The latter scenario – commercial intent – is usually the defining matter between a civil and criminal IP case. When it’s a criminal matter, ISPs are compelled to turn you in if asked.)

Now it will be up to individual courts to decide. And that’s where the fuzziness of this law will be felt, legal experts predict.

Allowing member states to interpret the EU directives as they see fit is bound to create 27 different legal interpretations. It’s not unlikely then that some member states with an already meagre media and software industry and a weak track record of IP protection will choose to interpret the laws favouring protections against file-sharers. Think The Pirate Bay moving to Romania. Conversely, countries like Britain and Germany, which have a history of protecting IP, may favour industry in these rulings, and continue to order ISPs to hand over details of the most prolific file-sharers among their customers.

"You could potentially get people who want to host material effectively forum shopping and going to ISPs in places where disclosure would not be ordered," Iain Connor, a partner with Pinsent Masons and an IP specialist, was quoted as saying on Out-Law.com . "Equally you could get ISPs choosing to relocate their businesses to countries where disclosure would not be ordered."

The irony of course is that the purpose of these directives – all EU directives for that matter – is to harmonise laws across the common market. But when two legal principles – in this case an individual’s right to privacy versus a company’s right to protect its intellectual property – are in conflict, all bets are off.

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Bernhard Warner, a freelance journalist and media consultant, writes about technology, the internet and media industries. He can be reached at techscribe@gmail.com