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A man who ran a music-sharing website with almost 200,000 members has been found not guilty of conspiracy to defraud at Teesside Crown Court.

Alan Ellis, 26, was the first person in the UK to be prosecuted for illegal file-sharing. He operated the site, called Oink, from his flat in Middlesbrough from 2004 until it was closed down in a police raid in October 2007. In that time Oink facilitated the download of 21 million music files.

The site allowed active members to find other people on the web who were prepared to share files - enabling users to get hold of music for free. Users were asked to make a donation, although it was not necessary for them to do so to invite friends to join the site.

The jury was told that police found almost US $300,000 in Mr Ellis's Paypal account and that he received $18,000 (£11,000) a month in donations from people using his website.

Mr Ellis told the court there was no intention to defraud copyright holders. He said the donations were to pay for the server's rental and any "surplus" would eventually be used to buy a server. He agreed he had about 10 bank accounts with some £20,000 in savings when police raided the house he shared.

Giving evidence, Mr Ellis explained why he set up the website. "It was to further my skills. To better my skills for employability."