> there is also a principle that you can have ephemeral copies as part of handling and processing the work.
I'm not aware of this principle. Where is it spelled out?
> Also the result of that case was self-contradicting
I agree the verdict was a travesty. An innovative business went to ridiculous lengths to stay on the right side of the copyright mafia (data centers with tiny individual TV antennas for each subscriber FFS!) while providing a better product and experience. They still had the hammer brought down on them.