SAN JOSE, CA — YouTube viewers loved the 30-second home video of Stephanie Lenz’ baby dancing merrily. Universal Music, however, wasn’t so happy. In fact, it was so unhappy that it sued the proud Pennsylvanian mother for copyright infringement and demanded that YouTube remove the half minute of infantile terpsichorean delight.At issue was 20 seconds of barely audible lyrics and music from the Prince song “Let’s Go Crazy,” which played in the background as Lenz asked her son “What do you think of the music?”

Uploaded as “Let’s Go Crazy #1” to YouTube, Lenz was temporarily able to share the joy of her son’s impromptu dance moves with friends and family, as well as the rest of the world.

Universal Music contended that the 20 seconds of audio qualified as unauthorized use of a copyrighted piece and successfully demanded that YouTube remove Lenz’ video. Additionally, YouTube warned Lenz that any further violations of copyright would result in the loss of her account and removal of all videos she had uploaded.

In October of 2007 she filed suit, arguing that use of the difficult to hear song fragment clearly fell under the category of ‘fair use,’ which does not require permission from the copyright owner, and that Universal was misusing the Digital Millennium Copyright Act in order to bully her.

Although originally thrown out of federal court in April of this year, the Electronic Frontier Foundation filed a second complaint 10 days later.

On Wednesday, Judge Jeremy Fogel made a first-ever ruling stating that copyright owners must take fair use into consideration before distributing DMCA takedown notices.

“Fair use is a lawful use of a copyright,” Fogel wrote. “Accordingly, in order for a copyright owner to proceed under the DMCA with ‘a good-faith belief that use of the material in the manner complained of is not authorized by the copyright owner, its agent, or the law,’ the owner must evaluate whether the material makes fair use of the copyright.”

EFF attorney, Corynne McSherry, calls the ruling “a major victory for free speech and fair use on the internet” likely to “help protect everyone who creates content for the Web.”