Universal Music Publishing Group has filed a motion to dismiss the complaint, a spokesman said.
File-sharing and illegally downloading of music has devastated a once-booming music industry. Some observers say the industry is just trying to protect itself.
"I think the large copyright holders believe that if they do not police every single use of their copyrighted work -- no matter how benign -- that somehow that will open the floodgates to massive piracy,'' said Gigi Sohn of the Washington think-tank Public Knowledge.
"The problem with that is that viewers, Internet users, consumers, have rights under copyright law as well, and one of those rights is the ability to make fair, lawful uses of copyrighted work, for a variety of reasons," she said.
"The 'Let's Go Crazy baby?'" she asked rhetorically. "When you look at the facts, it's obvious that a take down notice should never have been sent. ... I mean, nobody downloads a video from YouTube with a song on it -- particularly 29 seconds of a song and says, 'OK, I don't have to buy the song' -- so clearly this was a type of use that didn't violate copyright."
For it's part, Universal said it was simply acting at the behest of one of its top artists.
"Prince believes it is wrong for YouTube, or any user-generated site, to appropriate his music without his consent,'' the company said in a statement released to ABC News Thursday. "That position has nothing to do with any particular video that uses his songs. It's simply a matter of principle. And legally, he has the right to have his music removed. We support him and this important principle. That is why, over the last few months, we have asked YouTube to remove thousands of different videos that use Prince music without his permission."
A well-placed source directly involved in the situation confirmed to ABC News that Prince was directly involved in seeking the takedown of Lenz's video.
"This guy scours the Internet,'' the source said of the legendary artist, who once changed his name to an unpronounceable symbol and wrote the word "Slave'" on his cheek until he won back the rights to his music from another publishing company.
"He's really intense about this stuff," the source said, adding that Lenz's video "happened to be one of many'' that artist apparently located online and demanded be taken down.
A publicist for Prince directed ABC News to the artist's personal assistant's cell phone. The assistant did not return a call for comment.