In a ruling that's struck a sour note with songwriters, the Supreme Court has ruled that Canadian Internet service providers don't have to pay artists for the music stored on their servers.

SOCAN, the Society of Composers, Authors and Music Publishers of Canada wanted the courts to compel ISPs to pay the annual levy as compensation for artists.

The scheme, SOCAN argued, would mirror a long-established practice in the radio industry.

In 2002, for example, radio stations paid more than $30 million dollars in fees to SOCAN, which is charged with collecting the money on behalf of Canadian songwriters like Blair Packham.

Packham says he counts on those cheques for his livelihood. So, when the push came for ISPs to pay an annual royalty for the music stored on their networks, he was a big booster.

"Mainly, for me, it's the principle," Packham told CTV News. "It's the idea that my work -- without my permission -- is taken and given away to other people. Now, if I have said that's OK, well, that's not a problem. But I haven't."

Despite his wishes, the ten-year legal battle over the issue has ended with the Supreme Court ruling against the levy.

Packham says he's disappointed, "just because of the basic thinking that if someone is making money off of my music or someone else's music, then whoever created that should get a piece of that."

But on the other side of the argument, the ruling is being viewed as a victory.

If the high court had gone the other way, ISPs argued, demands for music fees could soon be followed by similar levies on images, books, movies, software and all the other copyrighted material they serve up daily.

In that event, the cost of Internet service would skyrocket.

Instead, the Canadian Association of Internet Providers, which represents such online giants as Bell, Sprint, and AOL, argued the sites that offer music downloads should pay -- not companies that provide the means to get it.

In its ruling Wednesday, the high court agreed.

In a 9-0 decision, the court said that companies providing access to the Web are not bound by federal copyright legislation because they are merely "intermediaries."

According to University of Ottawa professor Michael Geist, the ruling could also strengthen individuals' privacy rights.

"One of the judges on the Supreme Court took great pains to emphasize that any interpretation of copyright law will ensure that the privacy rights of individuals are protected," he said.

In their ruling, the Supreme Court judges also urged Parliament to make copyright reform a priority. New rules, they say, should be crafted to balance the rights of songwriters against the rights of Internet users as the United States, Australia and the European Union have already done.

Reporting from Toronto, CTV's David Akin says the court ruling sends a clear message -- that ISPs can't be held responsible for the third-party content stored on their networks.

"Just as we don't hold the telephone company responsible when bad guys use cell phones to commit their crimes, we won't hold ISPs responsible for content," Akin told CTV.ca, explaining his interpretation of the decision.

In the United States, publishers have taken a different tack in their fights against music downloading. Rather than going after the providers, they are choosing to sue file-sharing companies and individual downloaders.

The Canadian attempt to collect from Internet providers was thought to be easier than tracking down websites and customers.

This case, brought to the court's attention long before the Web site Napster popularized online music sharing, predates many of the issues surrounding downloading.

Other cases currently before the high court deal specifically with that aspect.