BT and Talk Talk have been dealt a bitter blow with the government giving the final go-ahead with the Digital Economy Act.
The court threw down the final gauntlet in a last ditch appeal by the internet service providers to stop the planned anti-privacy act going ahead. However, there was a small victory in the two year battle, with the pair winning a ruling saying that the government could not force ISPs to pay part of any case fees attached to the act.
Now the lines have been drawn, and the battle won, the government is free to set to work in sending out warning letters to British internet users that it believes are taking part in illegal filesharing.
In July 2010 the pair said they believed that the Act had been "rushed through". They also claimed that smaller ISPs with less than 400,000 customers had the upper hand as they would not be included in the legislation.
However, the Act, which has also now been found to be legal in accordance with EU law, has been questioned by rights groups.
Peter Bradwell at the Open Rights Group said in a statement: "There is one thing the court cannot tell us: that this is a good law. The Department for Culture, Media and Sport had no evidence when they wrote this Act, except for the numbers they were given by a couple of industry trade bodies. This is a policy made on hearsay and assumptions, not proper facts or analysis.
"So significant problems remain. Publicly available wifi will be put at risk. Weak evidence could be used to penalise people accused of copyright infringement. And people will have to pay £20 for the privilege of defending themselves against these accusations.
"The Government needs to correct these errors with a proper, evidence-based review of the law."
It doesn't look like BT or Talk Talk will take the ruling lying down, despite having to foot 93 percent of the legal costs.
Talk Talk said in a statement that is was now "considering [its] options."
It said it will continue fighting to defend its customers' rights against the "ill-judged legislation."