When the Alliance For Creativity and Entertainment (ACE) sued IPTV provider Omniverse One World Television and its owner in a California court in early 2019, the case looked relatively straightforward. But that wasn’t to be the case.

Omniverse Believed It Was Fully Licensed

According to ACE, Omniverse was a supplier of infringing content to third-party suppliers including the previously-sued Dragon Box, HDHomerun, Flixon TV, and SkyStream TV, who in turn offered packages to their customers.

However, unlike most entities sued by ACE, Omniverse owner Jason DeMeo insisted his company had acquired the necessary rights to the content offered by his platform. He pointed to a licensing deal with cable provider Hovsat, which in turn was supposed to have a deal with DirecTV to distribute TV content.

Questions were raised over the validity of these agreements and Omniverse eventually threw in the towel, agreeing to pay $50 million in copyright infringement damages to ACE.

Omniverse Goes After Hovsat

With Omniverse blaming Hovast for its predicament, including an unpaid $50 million bill, Hovsat’s presence was required in court. However, the company and its supposed owner Shant Hovanian failed to respond, which prompted Omniverse to demand $50 million in damages from Hovsat to settle its colossal Hollywood debt.

Last March the court denied Omniverse’s motion for default judgment on the grounds that it could not determine that defendant Hovsat had been properly served. The court did, however, suggest alternative means to serve Hovsat via a state official or agency, which Omniverse did in early September 2020.

In a memorandum supporting a motion for default judgment filed in December 2020, Omniverse explained that it paid Hovsat up to $46,000 in licensing fees every month and believed that DirecTV was getting its share too. But that turned out not to be the case, meaning that Omniverse was left unlicensed through Hovsat’s failures and liable to pay Hollywood $50 million in infringement damages.

Among other issues, Omniverse accused Hovsat of breach of contract, negligent and fraudulent misrepresentations, and breach of Warranty of Title and Against Infringement.

“Had HovSat not made the misrepresentations regarding acquiring the distribution licenses for the copyrighted content, and thus not breached their contract with Omniverse, Omniverse would have never been subject to the above-caption lawsuit raised by Plaintiffs,” the memorandum reads.

“It logically follows that HovSat’s misrepresentations thus proximately and directly caused the $50,000,000 in damages suffered by Omniverse.”

Hovsat Must Pay Omniverse $50 Million in Damages

In default judgment handed down by District Judge Michael W. Fitzgerald yesterday, it is noted that Hovsat was served with process through alternative means but failed to plead or otherwise defend the action. Having considered Omniverse’s motion, the Judge found in favor of the former IPTV provider.

The Court found in favor of Omniverse on six counts, including breach of the implied warranty of title and against infringement under UCC § 2-312. Hovsat was ordered to pay $50 million in order to settle them all.

Whether Hovsat will quickly pay Omniverse (so that in turn Omniverse can settle with Hollywood) remains unclear but a lack of interest in the court process thus far tends to suggest otherwise.

Omniverse’s motion and the $50 million default judgment can be found here (1,2 pdf)