Shares in Australia's third biggest ISP operation, iiNet, dropped 4.5 percent to $1.91 on the ASX yesterday, as the law suit levied by the movie industry's Australian Federation Against Copyright Theft (AFACT) moved into top gear in the Federal Court.

The plaintiffs' legal team, led by senior counsel Tony Bannon, opened proceedings by revealing AFACT's investigators had tracked almost 100,000 instances of iiNet customers sharing files illegally. iiNet defence lawyers are expected to present their case today.

Yesterday the court heard that of the 100,000 instances of iiNet customers sharing files illegally, just under one-third ­ or exactly 29,914 ­ related to a sample of 86 works named in the court proceedings including Batman Begins, Batman ­ Dark Knight, Happy Feet, Spiderman 3, The Simpsons and Family Guy.

The investigators tracked more than 1000 infringements of each of two titles: Wanted, starring Angelina Jolie, and Hancock.

Bannon claimed iiNet had done nothing to discourage copyright infringement on its network, not even enforcing its own terms and conditions under which it could cut off service from any customer infringing copyright.

Outside the court, iiNet MD Michael Malone, reportedly told media that another AFACT argument ­ that iiNet profited from its customers downloading copyrighted material ­ was incorrect. "We provide Internet access. That's where we make our profit from. When people download, that's a cost to us. The more people download, the more it costs us," he said.

Malone's legal team will get its chance to make this argument today, when it will make its opening address. The hearing ­ being intently watched by all ISPs ­ is scheduled to continue until mid-November.