Is transcoding a crime?

I was reading my RSS feed and of course this news item from TechCrunch caught my eye, Transcoding Is Not A Crime, Says Court In Veoh Porn Case (includes longer excerpt from the ruling and a video).

I was initially surprised that TechCrunch spoke about transcoders for mobile sites (remember Novarra, InfoGin, Openweb, etc?) and in fact they are talking about video and flash. The ruling is interesting and here is how it starts:

Here, Veoh has simply established a system whereby software automatically processes user-submitted content and recasts it in a format that is readily accessible to its users. Veoh preselects the software parameters for the process from a range of default values set by the thirdparty software.

The topic is very different, but if you read this text and applied it word-by-word to what proxy transcoders do, it would still make sense. So I wonder (and I’m not a lawyer by far), will this ruling also apply to mobile proxies?

DISCLAIMER: I agree this is extreme, but not entirely impossible.