Separate story, similar theme...
It's an editorial type article, but I don't think it's lost too much objectivity.

This saga is why Big 5 Music Label executives are among the most hated businessmen in America. Last June, Universal Music Group sued to have a video clip of a 13-month old toddler dancing to Prince’s “Let’s Go Crazy” removed from YouTube. Universal argued that the author – the child’s mother, Stephanie Lenz – violated the copyright of the song, which plays in the background of the video.

At first YouTube complied, but Lenz argued back, saying that the song was an obvious case of fair use. YouTube agreed and re-posted the song. This is when the story gets fun…

The digital rights group Electronic Frontier Foundation supported YouTube in court. The case pivoted on when a copyright holder may legitimately complain about possible infringement.

EFF claimed that the use of the song in Lenz’s video was obviously fair use – and that the label’s demand to remove the song was essentially harassment. The specific law they cited was the Digital Millennium Copyright Act, which recently has defined copyright on the Web.

Not understanding that discretion is the better part of valor, Universal turned and counter-sued the EFF. The big label argued that its initial complaint to YouTube was in itself a form a free speech – and the EFF suit represented a breach of Universal’s first-amendment rights. (Universal argued that use of the song wasn’t “obviously” a fair use – so a suit was warranted.)

YouTube - "Let's Go Crazy" #1

Federal district court judge Jeremy Fogel in San Jose heard the case, and essentially found against everyone. The EFF hadn’t completely proven that Lenz’s video was “obviously” fair use. And Universal hadn’t shown that any of it’s free speech rights had been violated. Fogel did, however, give the EFF an opportunity re-file the complaint with a better argument that the fair use of obvious.

Well this month the EFF is back with Fogel’s requested proof that Universal should have known that the video made fair use of the song. They’ve re-filed their complaint — that Universal knew or should have known it had no grounds to complain under the Digital Millennium Copyright Act. So now the drama continues.

So was Lenz’s use of the song “fair use”? According to US Copyright law, fair use is determined by four factors:

1. The purpose and character of the copy, including whether its purpose was purely commercial, or whether it’s intended for educational or artistic purposes.
2. The nature of the copyrighted work (which in this case is clearly a copyrighted work of music).
3. The amount and substantiality of the copied portion. In other words, did the copy steal all the best parts of the original?
4. The effect of the copy upon the potential market for the original work.

A cursory glimpse at Lenz’s video makes the argument pretty clear.

• The video was not intended for commercial purpose or to supersede the original. In fact the video furthers entertainment expression by use of the song – transforming it into a completely new work.
• The video uses only about 15 seconds of the overall work, which is about 5 minutes long. Longer 30-second clips of the song are ubiquitously available from other sources, including Universal.
• Because of the amateur quality and ambient noises, the video could never be reproduced or diminish the value of the original in any marketplace (actually, the song is barely audible).

In short – even Lenz’s 13-month old baby should have recognized the video’s use of the song is obviously within the fair use definition.

Meanwhile, Universal’s reaction is confusing. Surely they must realize the absurdity of their position. This suit is just one reason why music fans generally revile the Music Industry; why many major artists are defecting to their own indie labels; and why most Americans would rather illegally download songs than spend even 99¢ supporting this rancorous industry.

From the “Abuse Your Customer” Business Manual - The Seminal :: Independent Media and Politics

It's a cute video.
Universal Music should be ashamed, but I'm sure they would milk money out of this toddler if they could.