On February 7, 2007, Plaintiff Stephanie Lenz (“Lenz”) videotaped her young children dancing in her family’s kitchen. The song “Let’s Go Crazy” by the artist professionally known as Prince (“Prince”) played in the background. The video is twenty-nine seconds in length, and “Let’s Go Crazy” can be heard for approximately twenty seconds, albeit with difficulty given the poor sound quality of the video. On February 8, 2007, Lenz titled the video “Let’s Go Crazy #1” and uploaded it to YouTube.com ("YouTube”), a popular Internet video hosting site, for the alleged purpose of sharing her son’s dancing with friends and family. Universal owns the copyright to “Let’s Go Crazy.”

On June 4, 2007, Universal sent YouTube a takedown notice pursuant to Title II of the Digital Millennium Copyright Act (“DMCA”), 17 U.S.C. § 512 (2000). The notice was sent to YouTube’s designated address for receiving DMCA notices, “copyright@youtube.com,” and demanded that YouTube remove Lenz’s video from the site because of a copyright violation. YouTube removed the video the following day and sent Lenz an email notifying her that it had done so in response to Universal’s accusation of copyright infringement. YouTube’s email also advised Lenz of the DMCA’s counter-notification procedures and warned her that any repeated incidents of copyright infringement could lead to the deletion of her account and all of her videos. After conducting research and consulting counsel, Lenz sent YouTube a DMCA counter-notification pursuant to 17 U.S.C. § 512(g) on June 27, 2007. Lenz asserted that her video constituted fair use of “Let’s Go Crazy” and thus did not infringe Universal’s copyrights. Lenz demanded that the video be reposted. YouTube re-posted the video on its website about six weeks later. As of the August 20, 2008, the “Let’s Go Crazy #1” video has been viewed on YouTube more than 593,000 times.

On July 24, 2007, Lenz filed suit against Universal alleging misrepresentation pursuant to 17 U.S.C. § 512(f) and tortious interference with her contract with YouTube. She also sought a declaratory judgment of non-infringement. Universal filed a motion to dismiss, which the Court granted on April 8, 2008. Lenz was given leave to amend her complaint to replead her first and second claims for relief. On April 18, 2008, Lenz filed the operative SAC, alleging only a claim for misrepresentation pursuant to 17 U.S.C. § 512(f). On May 23, 2008, Universal filed its motion to dismiss the SAC.

The court stated "Though Congress did not expressly mention the fair use doctrine in the DMCA, the Copyright Act provides explicitly that 'the fair use of a copyrighted work . . . is not an infringement of copyright.' 17 U.S.C. § 107... 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. 17 U.S.C. § 512(c)(3)(A)(v). An allegation that a copyright owner acted in bad faith by issuing a takedown notice without proper consideration of the fair use doctrine thus is sufficient to state a misrepresentation claim pursuant to Section 512(f) of the DMCA."

The court denied Universal's motion to dismiss stating "Though damages may be nominal and their exact nature is yet to be determined, the Court concludes that Lenz adequately has alleged cognizable injury under the DMCA."