When faced with a lawsuit from a large organization, a small business may not necessarily know how to fight back, much less have the resources to do so. That appears to be the case with a recent wave of lawsuits filed against small businesses in California. These lawsuits are targeted at businesses that fail to make the appropriate payment for playing a pay-per-view event. However, the amount sued for to cover the alleged copyright infringement may not always be suitable, as one business lawsuit made clear.
In that incident, a small business owner of a bar in Aptos, California found himself facing a lawsuit for $160,000 in damages for a pay-per-view event his bar displayed. However, in this case, the event was turned on by a patron and not by the bar itself. Normally, the cost of displaying the event would have been $800.
However, the bar owner managed to fight back and he ultimately prevailed in the lawsuit. Yet not everyone is able to. Often times, the accused offender fails to show up in court. That results in what is called a “default judgment” against them, meaning that even if the lawsuit was invalid, they may nonetheless have to pay up.
In these kinds of cases, small businesses that play televised events for their customers do have a duty to pay the appropriate level of compensation. However, the penalties for inadvertently failing to pay may well be more severe than is appropriate, and most small businesses can ill afford a lawsuit for $160,000. Fortunately, the legal system protects the rights of the accused in a business lawsuit by affording them an opportunity to present a defense. For small business owners facing lawsuits that could very well put them in bankruptcy, there may be legal options available to ensure that does not happen.
Source: Contra Costa Times, “Sports promoters unleash piracy lawsuits against Bay Area businesses,” Howard Mintz, March 11, 2012