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Canada's Federal Court of Appeal overturned an earlier decision, paving the way for the country's first file sharing lawsuits. The decision brings Canada into line with the US and European countries, including the UK, where ISP records have been used to identify sharers who have subsequently been successfully sued.

Allen Dixon general counsel and executive director for the International Federation of Phonographic Industries said the ruling confirmed that file sharing was not legal and that sharers cannot hide behind data privacy laws.

'This decision also helps clarify that there really are no pirate havens for illegal file-sharing,' he said. 'It confirms that in Canada, as in many other countries, people who distribute music

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illegally on the internet are going to find themselves facing the legal consequences their actions.'

The Canadian Recording Industry Association, which filed the successful appeal, did not get everything its own way. The appeal court ruled that it does not yet have sufficient evidence to proceed with the first 29 lawsuits against alleged file sharers. The CRIA insists that it can meet the new standards.

'Large-scale music swappers should know that they can and will be held accountable,' said Graham Henderson, CRIA president.

Randy Lennox, CEO of Universal Music in Canada, said the decision will be good news for downloads stores, such as Apple's iTunes Music Store.

'We will see an increase in customers using legitimate online services and artists actually being paid for their music,' he said.

The IFPl claims that worldwide action against P2P sharing has resulted in a significant decrease in the number of songs available. By the nature of the technology, action against sharers in one country has a knock-on effect on P2P activity globally. However just a brief search using any of the freely available P2P applications will reveal that almost any well-known song can still be quickly and easily found. This suggests that, at the moment, the record industry is only scratching the surface.