Demon has abandoned its role as champion of the ISP community in the Godfrey defamation case and despite missing its deadline to appeal a first instance decision, has vowed to win the case. Particle physicist Laurence Godfrey claims that defamatory messages about him appeared on a newsgroup hosted by Demon two years ago. Demon's defence -- that it was an innocent distributor -- was thrown out by Justice Morland in March when it became apparent that Demon was aware of the alleged defamatory postings. That judgement set a "strong precedent" according to Tony Willoughby, of the Willoughby and partners law firm, rendering all ISPs liable for similar actions. "Any ISP seeking to argue innocent distribution will have this thrown in their face," he said. Demon vowed to appeal against Morland's judgement but the deadline passed on Monday with no action from the company. David Furniss , Demon's managing director does not accept the judgement will set a precedent. He argues the judgement is not a binding decision and is "based upon an interpretation". This contrasts with a statement made to the BBC Thursday by Demon's technical director Phil Male who said: "If we [Demon] appeal in the current case, it will set a precedent at the Court of Appeal level". Male told the BBC that the appeal had been dropped but Furniss told ZDNet Thursday that was incorrect and that Demon may still go ahead with the appeal. However Robin Bynoe, a senior partner with law firm Charles Russell, thinks it "unlikely" the court would accept Demon's late application. In what looks like a turnaround, Furniss concedes the case is no longer about the rights of ISPs. "It is now purely about Dr Laurence Godfrey versus Demon Internet and is not an industry platform," he said. The case is beset with confusion: Godfrey claims he told Demon about the defamatory postings and asked they be removed. He claims there was a delay before this was done. Furniss claims Demon has no evidence of Godfrey's notice. Furniss does not know whether the alleged postings were removed or expired but concedes there "may have been a possibility of an administrative error on our part that caused a delay in the postings being removed". In any case Demon will contest that Godfrey posted messages designed to provoke reaction. Bynoe thinks Morland's judgement could have massive implications for the industry. Describing the effects of the case as "potentially extraordinary" he is not convinced it is fair. "It's stretching common sense to say that an ISP is a publisher in the same sense as a newspaper or that they are intimately involved in what is published," he said. Justice Morland's judgement means that, once aware of publication, an ISP is liable. "The moment an unannounced fax arrives on the machine you are liable. In practical terms it is a bit harsh," Bynoe added. Some 10,000 messages have appeared on Demon's newsgroups, most criticising Godfrey for attempting to gag the much-vaunted freedom of the Net. But Godfrey believes there is a big difference between freedom of speech and writing things calculated to effect a person's social or professional character. "The issue in my case is not about restricting freedom of speech. There has never been an absolute freedom to publish false and defamatory statements," he told ZDNet News. In a prepared statement Godfrey welcomed Demon's decision to drop the appeal. "I am not surprised that Demon has indeed made a U-turn and abandoned its much-publicised intention to appeal," he writes. "The judgement of Mr Justice Morland will remain a precedent....Whatever happens now, unless at some time in the future the Court of Appeal overturns the judgement, all ISPs in England and Wales are prima facie [in the first instance] liable for any defamatory material that they know they are carrying, irrespective of where it originated." The case will probably not go to court until early next year.