In denying a motion for summary judgment requested by Universal Music Group (UMG) against online video service Veoh, a Los Angeles court became the latest court to interpret the Digital Millennium Copyright Act (DMCA) in favor of a web service that offers user-generated video content.

At issue is whether or not Veoh was eligible for the Safe Harbor provisions of the DMCA. Veoh, like YouTube, transcodes videos its users upload into the Flash Video Format (FLV). Universal Music Group argued that this made Veoh ineligible for DMCA protection because this transcoding essentially made Veoh an active party to the copyright infringement alleged.

A. Howard Matz of the United States District Court, Central District of California, did not find this argument persuasive and instead found that, since Veoh's transcoding took place in an automated format and "at the direction of a user", Veoh was protected by the DMCA.

In doing so, Matz agreed with another recent court ruling that favored Veoh on the same subject.

The argument that online video services which transcode video should not be eligible for DMCA protection is one that Viacom has made in its $1bn lawsuit against Google and YouTube.

The Veoh court rulings seem to be setting a precedent against this argument, however there are other issues in the Viacom lawsuit, such as the scale of the alleged infringement and YouTube's knowledge of the infringement, that make the final outcome of that case less certain if a settlement isn't reached before it goes to trial.

But barring some sort of higher court reversal of the reasoning Matz and other judges seem to be taking, the good news for the average, moderately-popular US-based online service relying on user-generated content is that the mere application of some sort of process to uploaded files, such as the transcoding of video, alone seems very unlikely to persuade US courts to remove DMCA protections.