The Swedish owners of the illegal file-sharing website The Pirate Bay defiantly vowed to keep it open for business last night despite facing a year in jail for allowing millions of internet users to illegally download music, movies and computer games for free.

Peter Sunde, Gottfrid Svartholm Warg, Fredrik Neij and Carl Lundstrom, the brains behind the world's most popular illegal "pirate" website, were found guilty of assisting copyright infringement yesterday in a landmark victory for the music and movie industries.

A court in Stockholm sentenced the four men each to a year in jail and ordered them to pay damages of kr30m (NZ$6.2m) to a coalition of entertainment companies including Warner Bros, Sony Music Entertainment, EMI, and Columbia Pictures.

The four Swedish website administrators had publicly taunted the entertainment industries for the past six years by running a site which allowed millions of users to efficiently download large files of music, movies and computer games without paying for them. When companies sent them "cease and desist" letters the group would post them online next to sarcastic and snide comments.

A joint civil and criminal court case was brought against them by a consortium of media, film and music companies led by The International Federation of the Phonographic Industry (IFPI). They consortium had hoped that a guilty verdict would finally force the site off the internet and make internet pirates think twice about setting up copycat sites.

But the four defendants have now refused to pay up and have promised that their illegal file-sharing site, which attracts more than 22 million users every month, will continue to operate outside of the law's reach.

"We can't pay and we wouldn't pay," said a defiant Mr Sunde, speaking at an online press conference after the trial. "Even if I had the money I would rather burn everything I owned, and I wouldn't even give them the ashes."

Much to the chagrin of the entertainment companies, which spent vast sums of money backing the trial, the four men have vowed to appeal the guilty verdict and remain out of jail until that appeal has been heard.

Sweden also remains powerless to close down the website's servers, many of which are located outside of the country and are hosted by supporters who have vowed to continue operating the site even if the owners are finally jailed.

Within the global online file-sharing community, Pirate Bay's administrators have been lionised as digital Robin Hoods who steal from faceless multi-national corporations and redistribute music and movies to the wider public. But the entertainment industries have accused them of conning thousands of artists and filmmakers out of royalties.

Alison Wenham, chairman the Association of Independent Music, which represents smaller indie labels, said yesterday: "Contrary to the spin peddled by The Pirate Bay's founders, there was nothing harmless or innocent about Pirate Bay. It was simply set up to leech off others' hard work and investment."

Throughout their trial the four men struck a defiant tone, Twittering about how bored they were from the dock and waving to the phalanx of supporters who lined the entrance to the Stockholm courthouse waving skull and crossbone flags.

Their defence lawyers tried to argue that The Pirate Bay was doing nothing wrong because the site only pointed users towards file-sharing sources elsewhere on the web, rather than hosting illegal copies of music and film on their own servers.

Prosecutors were forced to drop the more serious charge of "assisting copyright infringement", which could have carried a longer sentence and heavier fine. But the four men were eventually convicted on the lesser charge of "making available" copyrighted material after the court decided that hosting links to illegal material still constituted a crime. The damages, however, fell far short of the $24.8m in compensation sought by prosecutors.

The verdict will come as some small relief for the entertainment industries, which have been fighting a losing battle against the ever-increasing proliferation of pirate material on the web. But many commentators were quick to point out that any closure of The Pirate Bay would simply result in music fans going elsewhere to obtain free downloads.

Mark Mulligan from Forrester Research, a technology consultancy company, said the guilty verdict was more of a PR boost for the entertainment industry rather than a concrete victory against internet pirates.

"It would have been disastrous if the music industry had lost this n it would have essentially given a green light to illegal file sharing," he said. "However, it's really important to note that this is not going to suddenly stop file sharing. There's been nearly 10 years of music industry action against illegal file-sharing networks that ultimately haven't managed to stem the flow of the illegal file-sharing usage."

- THE INDEPENDENT