A Swedish court has found the co-founders of the world's most high profile file-sharing website, The Pirate Bay guilty of criminal copyright infringement. The four men have been sentenced to one year's imprisonment and ordered to pay damages of around £3 million.

The four were found guilty of the charge of assisting making available online copyright protected material, with reference to 33 specific files. The Pirate Bay does not itself host infringing movies, music and software but it makes it easy to access them by providing links to torrent files hosted elsewhere on the internet.

The case against The Pirate Bay was that, although it did not host copyright protected material, copyright infringement was core to the website's business model. The operators were accused of profiting from adverts that made money by virtue of the popularity of the infringing movies, music and software to which The Pirate Bay was providing a gateway. The judge held that the operators were aware that a large number of the website's users were engaged in the unlawful disposal of copyright protected material. By providing a website with advanced search functions and easy uploading and downloading facilities, and by putting individual file-sharers in touch with one another through the tracker linked to the website, the operation run via The Pirate Bay facilitated and, consequently, aided and abetted copyright infringement.

The ruling raises a number of important questions, particularly how the ruling will affect search engines such as Google. Will search engines be guilty of copyright offences simply for returning a search result that links to a website which hosts copyright protected material without permission? The consensus appears to be that mainstream search engines have nothing to fear. A crucial part of the case against The Pirate Bay was that the vast majority of the content that people sought through the website was infringing copyright and this was the website's main purpose. There is no shortage of links on Google to websites which host copyright protected material without permission. The difference is that although it returns some links to websites hosting infringing content, these links to torrent files are a byproduct of Google's search strategy rather than its main purpose.

It has been said that while the ruling in The Pirate Bay case has symbolic significance outside Sweden, it has little legal significance. Lobbying surrounding the case has demonstrated that the entertainment industry is prepared to assert its rights aggressively, but this has always been the case and the rules against file-sharing remain largely unchanged. Inducing copyright infringement or contributing to copyright infringement are already unlawful acts in the US and have been the subject of civil cases against Napster and Grokster. There is no equivalent UK law but the UK does prohibit authorising another person to commit an infringing act. This unlawful authorisation must involve some element of control over the ultimate infringing acts. It would therefore be difficult to establish that service providers of a file-sharing website had authorised the infringement committed by users of their services where it is proved that the file-sharing service has non-infringing uses as well.

The lawyer representing the four operators of The Pirate Bay has filed an appeal, asking the court of appeal to change the verdict and dismiss the compensation ruling. He has also urged the court to look to the European court of justice for a preliminary ruling. The lawyer has also subsequently asked for a retrial on the basis that the presiding judge in the case was a member of various copyright protection bodies and therefore biased.

This decision in The Pirate Bay case may act as a deterrent to those considering setting up a website of a similar nature, particularly when one considers that one year's imprisonment was imposed and large damages awarded. Demand for such services remains high, however, and websites providing links to illegal torrent files seem destined to continue.