The best way to stop infringement is to tell the authorities and the owners so that they can follow up and arrange for a license and for royalties to be paid. Licenses for Happy Birthday are controlled by ASCAP. While monetary royalties will be negligible for a single restaurant performance, it is the principle that is at stake.Link (Thanks, Mako!)
If you have seen someone singing Happy Birthday in a restaurant, a park, or at a school, you should tell ASCAP so that they can arrange for a license. If you are an offender, you should apologize and offer to pay whatever is due – a nickel, a quarter, a dollar – whatever ASCAP demands.
There is an overwhelming amount of copyright infringement of Happy Birthday. Let's right the balance and tell ASCAP about every one of these violations!
I write books. My latest is a YA science fiction novel called Homeland (it's the sequel to Little Brother). More books: Rapture of the Nerds (a novel, with Charlie Stross); With a Little Help (short stories); and The Great Big Beautiful Tomorrow (novella and nonfic). I speak all over the place and I tweet and tumble, too.