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This is how YouTube works:

  • A user records a video (user has copyright)
  • The user then uploads the video to YouTube
  • YouTube stores the file privately and processes it
  • Processing basically records the original into several different file formats for playback via the web
  • YouTube destroys the original upload. Only the processed versions are distributed

It is common for uploaders delete the original file to save hard drive space. In the future they may want to download the YouTube video. (probably via 3rd party software that does break YouTube TOS)

Given this situation:

  • Does YouTube own copyright for the processed videos, or does it stay with the uploader?
  • Does the uploader have any rights to download and use the processed video?
2

No, Youtube does not gain copyright for several reasons:

  1. Youtube creates a derivate that is virtually the same as the original safe for the encoding. This means there is no transformation done, precluding fair use, and demanding a license, which you grant them in the ToS.
  2. Youtube does create the work according to a contract with the uploader, where YT gets usage rights only: it's in the Terms of Service! Therefore, while it might not be a Work for Hire, YT precludes itself from obtaining anything but the (rather wide) usage license:

License to YouTube

By providing Content to the Service, you grant to YouTube a worldwide, non-exclusive, royalty-free, sublicensable and transferable license to use that Content (including to reproduce, distribute, prepare derivative works, display and perform it) in connection with the Service and YouTube’s (and its successors' and Affiliates') business, including for the purpose of promoting and redistributing part or all of the Service.

License to Other Users

You also grant each other user of the Service a worldwide, non-exclusive, royalty-free license to access your Content through the Service, and to use that Content, including to reproduce, distribute, prepare derivative works, display, and perform it, only as enabled by a feature of the Service (such as video playback or embeds). For clarity, this license does not grant any rights or permissions for a user to make use of your Content independent of the Service.

Duration of License

The licenses granted by you continue for a commercially reasonable period of time after you remove or delete your Content from the Service. You understand and agree, however, that YouTube may retain, but not display, distribute, or perform, server copies of your videos that have been removed or deleted.

As a result, the uploader has all right to re-download it, edit it, and re-upload it, in fact, youtube demands that at times for fixing stuff into the guidelines. Youtube has some extra rights from the contract however.

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