The Digital Millennium Copyright Act provides several safe harbors for internet service providers and web hosting services against copyright claims. For interactive digital media companies, one of the most useful is provided in 17 U.S.C. § 512(c) – for “information residing on systems or networks at direction of users.” If you operate a qualifying internet service and fulfill the requirements enumerated in the statute, you are immune from liability if a user has posted copyrighted information that can be accessed by other users on your site.
There are three requirements to qualify for this safe harbor:

(1) the service provider cannot have actual or constructive knowledge that infringing activity is taking place on its system, OR it must “act expeditiously” to remove infringing material upon obtain knowledge of its existence;
(2) if it has the right and ability to control the infringing activity, it cannot receive a direct financial benefit from it,
AND
(3) if it receives a DMCA “takedown notice,” it must expeditiously to disable or remove the infringing material. (Fn1)
The interesting thing about these requirements is that they are conjunctive. In other words, if an internet service provider fails to meet any one of them, it doesn’t qualify for the safe harbor. Many people have heard about “DMCA takedown notices” and assume that a plaintiff has to serve a DMCA notice in order to bring a copyright suit against an internet service provider. Not necessarily so. If there is solid evidence that the service provider has actual or constructive knowledge of infringing activity, then a copyright holder can sue without ever sending a DMCA notice. There are a number of recent cases against digital media companies where plaintiffs have brought suit without first sending a DMCA notice.
So why bother sending a DMCA notice at all? The problem is one of proof. Without sending a compliant DMCA notice, it is often very difficult to prove that the service provider had actual or constructive knowledge of the infringing activity.