The court gives a broad reading to the DMCA safe-harbor provisions in the context of a music-locker service. In this sense, it does for music storage what the Viacom/YouTube case did for video storage - it severely limits the duty of a host to police its site for infringing content of users based on loosey-goosey standards or based on fuzzily-worded takedown notices (e.g., "remove all songs by . . .").

Another way of putting this: if the host does not knowingly countenance infringing acts, and if it diligently complies with takedown notices identifying specific items that are infringing, it is immunized from liability for infringement, whether direct, contributory, or vicarious. In other words, Congress passed the DMCA to facilitate the growth and maintenance of robust internet services and the courts will give the law its proper force notwithstanding the efforts of content providers to try to finagle new revenues through aggressive lawsuits attacking the services. In this sense, the opinion is a well-reasoned extension of Viacom, which was decided last year in favor of Google and YouTube on a grant of summary judgment (my comments on Viacom: http://news.ycombinator.com/item?id=1456757). Here too the decision was on summary judgment (what summary judgment means: http://news.ycombinator.com/item?id=1457388).

At the same time, MP3tunes got nailed here for failing to follow up properly on the takedown notices in the sense of taking steps to remove properly identified infringing materials from the lockers of users. On this point, the court granted judgment for EMI based on affidavits alone and held MP3tunes liable even without a trial. Again, a big part of the court's reasoning was devoted to this point.

On a final note, the copyright law is complex on the issue of de-duplicating storage (a previous comment of mine on this is here: http://news.ycombinator.com/item?id=2535137; for some commentary by EFF, see here: https://www.eff.org/deeplinks/2011/05/current-music-locker-s...). Common sense, of course, dictates that a user who has already bought a piece of music, who uploads it into a service, and who enjoys listening to it through that service is doing nothing more than getting the benefit of something legally purchased. The problem is that law often fails to keep up with changing technology. Thus, well-established copyright principles (decided years ago in the offline world) say that one engages in a "public performance" if he uses one copy of a copyrighted item to enable members of the public to view or listen to it serially (this is the so-called "master copy" reference mentioned in the decision). Of course, it is not really "one copy" if each user individually uploads his own copy and then replays it. But is it the user's own copy if it is de-duplicated? This decision says it is but this is by no means a foregone conclusion under the law and that is why Amazon and Google have taken the conservative route and have not used de-duplication. In fact, it is an area of great uncertainty. This decision, good as it is on the point, does not change that. This is a trial court decision that has no legally binding effect beyond its impact on the parties immediately before the court. It will be appealed and who knows what will happen at the next level? I would seriously doubt that major services like Google's will think themselves safe to de-duplicate their storage just yet.

All in all, a very good decision but very likely not the final word on these issues.