A US court has ruled that the music industry cannot force internet service providers to identify subscribers who swap music files online.
Pursuing file-swappers will become more difficult
The ruling could deprive the record industry of its most effective means of bringing illegal downloaders to book.
Record companies have sued hundreds of file swappers after obtaining their names and addresses from their internet service providers.
One, California-based Bob Barnes, described the ruling as "incredible."
"It's a blow for the little guy," he said.
US telecom giant Verizon, which has previously been forced to provide the names and addresses of downloaders, also welcomed the District of Columbia Appeals Court ruling.
"Consumers' rights cannot be trampled upon in the quest to enforce (the music industry's) copyright," a Verizon spokeswoman said.
The ruling means that record companies will have to file lawsuits against anonymous defendants, and then take separate legal steps to discover their names.
This will make it far more expensive and time-consuming to pursue those who download music illegally.
Cary Sherman, president of the Recording Industry Association of America (RIAA), said the music industry would "continue to defend our rights online on behalf of artists, songwriters, and countless others involved in bringing music to the public."
The ruling will not affect about 400 lawsuits that have already been filed against music downloaders.
Some 220 financial settlements under which downloaders have agreed to pay penalties of up to $7,500 each are also expected to go ahead.
The music industry partly blames the rise of file-swapping - where internet users give each other free access to music stored on their computers - for a steep slump in sales of recorded music.
Tens of millions of Americans are thought to use online file-sharing networks.
The industry has tried to respond by setting up its own online music operations, which allow users to download music for a fee.