Five record companies have lost a High Court legal challenge to force the internet provider UPC to stop its users illegally downloading copyright material.
Mr Justice Charleton said in his judgement the, "legislative response laid down in our country...has made no proper provision for the blocking, diverting or interrupting of internet communications intent on breaching copyright".
UPC is the third largest internet provider in Ireland, with 15% of the market.
The Irish Recorded Music Association (IRMA) said it was extremely disappointed with the decision and would now look to the Government to fully vindicate the constitutional rights of copyright holders.
Eircom has already reached an agreement with IRMA, in which it provides the record companies with the IP (internet protocol) addresses of those who illegally download material.
It operates a 'three strikes and you're out' rule, whereby someone caught downloading illegally three times will have their internet service cut off for a year, if they persist.
Record companies have initiated similar proceedings against O2 and 3 Ireland, in a bid to get a similar agreement.
In a statement following the judgement, UPC said: "UPC has repeatedly stressed that it does not condone piracy and has always taken a strong stance against illegal activity on its network.
"It takes all steps required by the law to combat specific infringements which are brought to its attention and will continue to co-operate with rights holders where they have obtained the necessary Court Orders for alleged copyright infringements.
"Our whole premise and defence focused on the mere conduit principle which provides that an internet service provider (ISP) cannot be held liable for content transmitted across its network and today's decision supports the principle that ISPs are not liable for the actions of internet subscribers."