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GoogleGuy explains that using custom 404 pages will not trigger a duplicate content penalty.
GoogleGuy Says: [
Link to quote]
Hi Arnett, a 404 page isn't going to trigger a duplicate content penalty--I wouldn't worry about it. If a page is well and truly gone, I would use a 404 to let spiders know about that. It's fine to show custom content on the page, but your HTTP headers should return 404 so the spider knows the page it gone.
If you just return a 404 for pages that are gone, you'll be fine. It can take a while for spiders to discover the 404, but you wouldn't get any penalties anywhere in the process.
Hope that helps,
GoogleGuy
