The ruling threw out convictions against two former Turin Polytechnic Institute students who set up a peer-to-peer, file-sharing network that was shut down within months.
One analyst told the Associated Press that violating a copyright, for example by breaking copy-protection technologies in place, remained illegal even if downloading the material had been decriminalized.
"I consider this sentence as a very intermediate step in clarifying what is legal and what is not legal," said analyst Carlo Alberto Carnevale Maffe, the president of Assodigitale, a think-tank on digital technology. "This sentence marks an important step in that peer-to-peer per se is not an illegal activity. What stays and remains illegal is copyright infringement by cracking copyright files, and distributing it for commercial purposes."