The court battle between Australian timber giant Gunns and wilderness campaigners has become a textbook example for companies around the world on how NOT to deal with stakeholders. Gunns has locked itself into a position of "no surrender".

The fight is around the future of logging in the Tasmanian wilderness, one of the most extraordinary and breathtaking areas in the world filled with ancient forests and precious wildlife. Think about the scenery in the Lord of Rings and you'll have some idea how special it is.

Gunns, which makes good money logging the trees for woodchips, has long been targeted by campaigners and hit back two years ago by suing environmentalists, filing a claim that they were interfering with its business and accusing them of defamation. High risk and not necessarily one that help the company, even if it won. That is why the case has been compared to the notorious McLibel case by The Guardian.

Earlier this week, the Victorian Supreme Court rejected Gunns' statement of claim, although Justice Bernard Bongiorno has given the company the chance to file another claim.

Gunns chief John Gay has vowed to fight on. "Gunns isn't about silencing the Greens," he said. "What we're sick of is the malicious damage some people are doing to us. We will continue to chase that down to the nth degree."

You can read more about it and find a good timeline for this dispute here.

This case is shaping up as the new McLibel and a textbook example of how not to handle conflict with activists.