The sharply worded ruling, which dismissed one industry argument by saying that it "borders on the silly," is a blow to the music companies in the online music wars. It overturns a decision in federal district court that favored the industry and ordered Verizon Communications to disclose the identity of a subscriber based on simple subpoenas submitted to a court clerk.

"It's a huge victory for all Internet users," said Sarah Deutsch, vice president and associate general counsel for Verizon, which brought the suit against the Recording Industry Association of America over the music group's attempts to stamp out online copyright infringement. "The court today has knocked down a very dangerous procedure that threatens Americans' traditional legal guarantees and violates their constitutional rights."

A music industry official said the case "is inconsistent with both the views of Congress and the findings of the district court."