Reversing on appeal a lower court ruling, Switzerland’s Supreme Court says Logistep’s collection of IP addresses of suspected file-sharers for sale to copyright holders to pursue copyright infringement claims violates the country’s Privacy Act.

Swiss-based Logistep AG is the world’s largest company monitoring P2P networks and services for signs of infringement and collect the IP addresses of suspected infringers.

A lawsuit against Logistep was filed in 2008 by the country’s Federal Data Protection and Information Commissioner (FDPIC). He demanded that the Swiss company cease its business practice of collecting the IP addresses of suspected media pirates and selling the information to music and film production companies. The data would then be used by groups like the MPAA and RIAA to file suit against the owners of the IP addresses. A lower court sided with Logistep last May.

Last week’s Supreme Court ruling should bring little relief to Swiss file-sharers as the Logistep had said it will consider delocalising its operations to countries where its business is legal should it loses. “Court decisions in Germany and other countries […] have confirmed the proper and legitimate work of the Logistep AG,” said the company. It was also quoted as saying that the Superme Court decision would create a “kind of legal limbo” that could lead to the “massive and uncontrolled illegal distribution of copyrighted content.”

However, the court’s ruling stated that “the interests of copyright holders cannot outweigh the privacy interests of the people Logistep AG wishes to monitor for suspected wrongdoing.”

While collecting and selling copyright infringers data by third parties is now declared illegal, it is not clear if the ban covers the copyright holders collecting IP addresses themselves.

For background information, watch the report (in French) from Télévision Suisse Romande.

Story filed 14.09.10