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Experts believe the ruling could be the first step towards ending illegal downloading, which has cost music and film companies billions of dollars in lost revenue.
Founders Peter Sunde and Gottfrid Svartholm Warg, along with two other employees Fredrik Neij and Carl Lundström, were sentenced to a year in jail after being found guilty in a Swedish court of making 33 copyright-protected files accessible for illegal downloading on the website Piratebay.org.
The four were also ordered to pay $3.6 m (£2.4m) in damages to copyright holders, including Warner Brothers, MGM, Columbia Pictures, 20th Century Fox Films, Sony and Universal, according to Swedish media reports.
In a Twitter posting before sentencing, Mr Sunde said: "Nothing will happen to TPB [the Pirate Bay], this is just theatre for the media."