Court: Veoh did not infringe on copyright by transcoding videos
Let's back up a second here. If you upload copyrighted material to an online video site to share with others without the copyright holder's permission, you may be breaking the law. But the question of whether the video site itself is violating the law is a bit murkier. The IO Group, which owned the video in question filed a suit agains Veoh in 2006 claiming that the video service could not hide behind safe harbor laws by saying that the user, not the video site was responsible because Veoh took the action of transcoding the video into Flash for online viewing.
Of course, the process of transcoding a video is pretty much automatic, and the judge in this case seemed to understand that Veoh's action in transcoding the video were about as deliberate breathing. The ruling basically states that as long as a video site can demonstrate that it warns users that they should not upload copyrighted video without permission, removes copyrighted videos promptly when faced with a DMCA takedown notice, and at least makes some effort at sniffing out illegally uploaded videos, the company is lawsuit-proof. Or at least lawsuit-resistant up to a few meters.