My wife works part-time as a Karaoke host and is being sued by the company Sound Choice, subsidiary of Slep-Tone Entertainment Corp. who makes the karaoke CDs that she uses claiming that she is using pirated material. Here's the thing, all of her music is legal and paid for. What this company is doing is sending out a blanket lawsuit against every karaoke host who uses their material, and is then demanding that they either settle for nearly $5,000 if they are guilty (i.e. using pirated material), or prove that they are operating legally. In order to prove that they are operating legally, the karaoke host must submit to an audit with costs start at $500.
This company clearly has no evidence against my wife, she is simply being sued because she is a user of their product. We would love to prove her legitimacy with the company, however to charge us for the audit sounds to me like extortion. How can this be legal? We believe whole-heartedly in intellectual property rights and anti-piracy law, but do they have a case if they simply want to file arbitrary lawsuits, then charge people to prove their innocence?