A YouTube spokesman told ABC News that under the provisions of the Digital Millennium Copyright Act, hosting platforms like YouTube are legally obligated to take both the original takedown notices and the counter-notices at face-value, and to honor them.
"This litigation doesn't involve us,'' Ricardo Reyes, a spokesman for YouTube said.
"We are what the DMCA call a hosting platform," he said. "We provide a platform for people to post their content and share it. When we're notified that something is infringing, we take that [content] down. To not take it down would put us in violation of the DMCA. What we have to do is take them at face value. What you are saying under penalty of law is saying you are the owner. If you say you are the owner and you're not, you can be sued."
Conversely, Reyes said, "When we're counter notified, we basically have to take the counter notice at face value too. Our responsibility is to abide by the notices or counter notices."
Caught to some extent in the middle of the takedown notice wars, Reyes declined to address the Prince controversy directly, but said YouTube had been down this road before.
He cited the case of a North Carolina school board council candidate, Christopher Knight, who produced a daffy commercial in which he donned a "Star Wars"-like light saber and promised to protect the school district's students from a metaphorical Death Star.
The VH1 cable television show "Best Week Ever," which highlights amusing online content, featured a clip of the video on their show.
Knight "thought that was so cool he put up the VH1 clip up on his channel on YouTube,'' Reyes said. "And VH1 sent us a take down notice." (To view Knight's video, go to YouTube and search "Christopher Knight.")
Lenz, a blogger and fiction writer, said she's sympathetic to the plight of the music industry and its artists.
"I do understand where the record industry is coming from,'' she said. "They should go after people who infringe on their copyrights. Artists and musicians are owed the money for the product that they create, but I didn't take their product. I bought my CD at my local record store and I played it for my kids, and I wasn't trying to make any money or pass it off as anything other than a home movie of my child."
But the legal controversy has changed the way Lenz thinks, she said, every time she picks up her digital camera. "I'm constantly thinking about what's going on in the background, what's on the TV, what's on the CD player, the characters on my kids' clothes, the characters on the toys that they are playing with,'' she said.
"I'm cognizant of what's going on at every step, instead of focusing on my kids, which is where my attention should be."
As for Holden, the toddler has moved on to punk music.
"He loves music,'' his mother said. "He likes all kind of music. At the time [of the video] he liked anything that was funk or anything that was R & B, and Prince fit perfectly in with that.
"I haven't played Prince for him lately,'' she said, laughing. "But he's getting a little bit more into punk now, so I'm trying to turn him on to Nirvana."