WASHINGTON -- In a closely watched copyright case the D.C. Circuit Court of Appeals overturned a lower court's decision upholding the constitutionality of a special subpoena process the recording industry has used to get the identities of hundreds of people suspected of pirating music over popular P2P networks.

The decision, which pitted the Recording Industry Association of America against the nation's largest telephone company's Internet subsidiary, Verizon Internet services, throws a legal monkey wrench in the RIAA's high-profile campaign to sue potentially thousands of people who "share" files over such services as Grokster and Kazaa.

In its opinion, the three-judge panel dismissed arguments by the RIAA that P2P services are simply an extension of the central-server technology that was around when Congress approved the Digital Millennium Copyright Act that allows copyright holders an expedited way to gain alleged infringers' identity. The DMCA subpoena requires Internet service providers to turn over the identity without a judge's order.

"The RIAA argues that the definition of 'Internet' service provider (in the law is) applicable to an ISP regardless what function it performs with respect to infringing material -- transmitting it ... caching it ... hosting it ... or locating it," the court wrote. "This argument borders upon the silly. "