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I run a site that has pages for famous people, brands, movies, etc. Each page has a "profile picture" that is added by a user (if no user has submitted a picture yet, a default image is used).

When a user submits an image to be used as a page's profile picture, a site moderator reviews it, and either approves it or rejects it based on whether it is not offensive and meets reasonable quality standards.

My question is, if the work turns out to be copyrighted, am I still granted safe harbor under the DMCA, even if I review the material before it is published?

From the Digital Millenium Copyright Act, Title 17, Chapter 5, § 512

"Information Residing on Systems or Networks at Direction of Users.—

(1) In general. — A service provider shall not be liable for monetary relief, or, 
except as provided in subsection (j), for injunctive or other equitable relief, for
infringement of copyright by reason of the storage at the direction of a user of 
material that resides on a system or network controlled or operated by or for the 
service provider, if the service provider -

(A)(i) does not have actual knowledge that the material or an activity using the 
material on the system or network is infringing; or

(ii) in the absence of such actual knowledge, is not aware of facts or 
circumstances from which infringing activity is apparent;

(B) does not receive a financial benefit directly attributable to the infringing 
activity, in a case in which the service provider has the right and ability to 
control such activity."

On my site I include the following disclaimer:

"We will screen your image to ensure that it is relevant to the page, meets 
reasonable quality standards, and contains no obscene content. We will not screen 
the image to ensure that it is fair use. We reserve the right to reject any 
image that does not meet our quality standards."
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This is the Viacom v Youtube case. Take a look at the wikipedia page because it contains summaries of various rulings.

You are dealing with actual knowledge in (c)(1)(A)(i) or "red flag" knowledge in (c)(1)(A)(ii). Unless your photo reviewer has some way of determining if a profile photo is copyrighted you will not have actual knowledge - note that this knowledge is subjective and most be proven by a plaintiff. As for the red flag test, this is met if infringement is objectively obvious to a reasonable person.

You don't have actual knowledge. Unless you want to change the question to include certain facts which create actual knowledge you do not subjectively have knowledge.

As for objectively obvious knowledge, again, all we know from your facts is that a photo was received, it cannot be determined what an reasonable person would know about the copyright based on those facts.

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