Prince’s publishers objected, Ms. Lenz filed a lawsuit, and for more than eight years the case has been symbolic of the clashes over copyright online.
On Monday, the United States Court of Appeals for the Ninth Circuit, in San Francisco, cleared the way for the case to go to trial, and set a guideline that may change the way media companies police their holdings online. In its decision, the three-judge panel ruled that copyright holders must consider fair use before asking services like YouTube to remove videos that include material they control.
The suit, known as the “dancing baby” case, has become famous for its focus on the kind of Internet activity that millions of ordinary people engage in, posting candid videos of family and friends that may only incidentally include copyrighted media like songs. The Electronic Frontier Foundation, an advocacy group that represented Ms. Lenz in her lawsuit against Universal, called the judges’ decision a victory for Internet users.
“Today’s ruling sends a strong message that copyright law does not authorize thoughtless censorship of lawful speech,” Corynne McSherry, the foundation’s legal director, said in a statement.
A spokesman for the Recording Industry Association of America, Jonathan Lamy, said, “We respectfully disagree with the court’s conclusion about the D.M.C.A. and the burden the court places upon copyright holders before sending takedown notices,” referring to the 1998 Digital Millennium Copyright Act.
In her suit, Ms. Lenz argued that her use of Prince’s music was protected by fair use, which allows the use of copyrighted material under certain conditions like commentary, criticism or news reporting.
The case also came to represent the split between Hollywood and Silicon Valley over copyright.
The Motion Picture Association of America and the R.I.A.A. both supported Universal, which argued that fair use should be considered an “affirmative defense” only when part of an infringement suit. On the other side of the issue, Google, Twitter and Tumblr rallied behind Ms. Lenz.
The judges ruled that fair use was “uniquely situated in copyright law so as to be treated differently than traditional affirmative defenses,” and copyright holders like Universal must consider fair use before issuing takedown notices.
Even paying “lip service” to the consideration of fair use is not enough, and could expose a copyright holder to liability, the judges ruled.