Universal Music Group suffered a setback in its defense of a lawsuit over a YouTube takedown notice, when the presiding judge declined to dismiss the case. The ruling opens the door to how "fair use" may be taken into account before demanding a video be removed.

The dispute focuses on UMG's request to remove a short video of a baby dancing to Prince's "Let's Go Crazy." YouTube removed the video at UMG's request, but later put it back up. The Pennsylvania mother who posted the video, Stephanie Lenz, joined forces with the Electronics Frontier Foundation and filed suit against UMG last October for abusing the Digital Millennium Copyright Act (DMCA) in making the takedown request.

That original lawsuit was dismissed in April. The plantiffs then filed a second complaint, which the judge this week declined to throw out. In its motion to dismiss, UMG argued that it need not take fair use into account, a position the judge rejected.

"Fair use is a lawful use of a copyright," reads the ruling (link to pdf). "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."

The EFF hails the ruling as a milestone in the fight against, what it calls, a "shoot-first-ask-questions-later" attitude that content owners have taken when demanding content be removed from user-generated content sites. Most sites that accept user-submitted content agree to remove any content on request from copyright holders, which ostensibly protects them from copyright infringement under the DMCA law.

The EFF lawsuit against UMG seeks to retain some measure of user rights in the process, as takedown notices are issued rather broadly as a blanket protection measure. While the ruling represents a small victory in this fight, it also predicts the lawsuit will ultimately fail.

"The Court has considerable doubt that Lenz will be able to prove that Universal acted with the subjective bad faith," he wrote.