RapidShare has staved off a bid to have its file-sharing business shut down in Germany.
The German court ruled the company was not acting illegally when it allowed users to upload and share files through its service.
The court also ruled that in future, RapidShare will have to actively monitor content, checking that its users are not sharing copyrighted material.
The company said that it is already in compliance with the ruling, according to reports on news site, TorrentFreak
"If the anti-abuse team identifies a download link on such pages which results in a file that has clearly been published illegally being on the company’s servers, the file in question is immediately blocked," RapidShare chief executive, Alexandra Zwingli said.
Meanwhile, German copyright holders are also claiming victory in the case.
Germany's performance rights group Gesellschaft für musikalische Aufführungs (Gema) hailed the ruling as a "groundbreaking step" in defining the responsibilities that file-sharing sites have when dealing with copyright material.
"Such platforms store contents of anonymous users free-of-charge and enable third parties to access these contents via links, which can be disseminated copiously," a Gema spokesperson said in a statement.
The ruling will also help RapidShare remain online and escape the shutdown efforts which have knocked other file-sharing services offline.
Earlier this year law enforcement groups dismantled file-sharing service MegaUpload and charged the company's management with distributing pirated content.