Whether or not you agree with earlier accusations that LegalZoom is practicing law without a license, it has been my experience that “entrepreneurs” who can’t set aside some capital for decent legal advice as part of starting up their company are not going to take that company very far. Maybe incorporating an entity and filing for a trademark fulfills some sort of self-actualizing New Year’s resolution, and LegalZoom certainly lets you do so on the cheap, but the one enduring rule of the marketplace is this: you get what you pay for.
NimbleTV launched its television-on-demand service on Tuesday to the New York City area. Next, the world… The company acts as a middleman between cable companies and subscribers seeking to access television content on computers, tablets and phones. NimbleTV takes cable content and streams it for a fee (the basic package is $3.99 per month).
However the service is not for cord cutters — a cable subscription is required or one must be purchased through NimbleTV, which pairs customers with cable providers based on the channels they want and the price.
Like Aereo and FlimOn X, NimbleTV does not have an agreement with with the cable companies. According to Mashable, when asked about the legality of their business model, NimbleTV CEO Anand Subramanian replied that it is a “fair use” concept since subscribers can only stream content that they already pay their cable providers to view.
Unfortunately, The Fair Use Argument May Not Hold Up.
I am not sure whether Mr. Subramanian’s “fair use” response was meant to convey NimbleTV’s legal position on its streaming model, or if he just thinks that it is fair to re-broadcast content to users who have already paid the cable companies for it. The problem is that copyright law does not recognize the colloquial definition of “fairness” and that the legal definition of the Fair Use doctrine is unlikely to apply to what NimbleTV is doing.
As outlined in the 2nd Circuit’s most recent Google Books decision, the Fair Use doctrine is a defense where the defendant says, “Yes, I am infringing on your copyrights, but what I am doing is protected by copyright law because it transforms the copyrighted work in such a way as to promote education or the arts, etc…” (This is contrary to Aereo’s model where Aereo denies any infringement on its part, arguing that the subscribers at home doing the copying and are merely using the antennas that Aereo provides.)
When analyzing fair use, a court examines (i) the purpose and character of the use; (ii) the nature of the copyrighted work; (iii) the amount or portion of the work copied; and (iv) the effect of the use on the potential market.
In most cases (Google Books was the exception), when the character of the use is commercial, this spells a death knell for the fair use defense. In NimbleTV’s case, the video streaming service is clearly commercial in nature — NimbleTV makes money off the service. Additionally, there is the major factor that some cable channels, like HBO, have begun to offer a streaming service like HBO Go that NimbeTV’s service would directly compete with.
When it is fairly clear that NimbleTV’s service is taking potential profits out of the content providers’ pockets and, unlike Aereo, directly copies the copyrighted content, I unfortunately do not see a legal argument that would save NimbleTV’s service should it get sued.
I Say Unfortunately…
I say “unfortunately” because I, like many cable consumers, would love to see a good streaming service. HBO Go is, in my opinion, sub-par in that it still requires you to subscribe to the entire cable package of unwanted channels (HBO is probably contractually obligated to do this).
I should also note that back in 2011 a company called ivi, Inc. tried to do something similar to what NimbleTV is doing, arguing that its streaming service was legal based on the Copyright Act’s compulsory license provisions for re-broadcasters. Unfortunately the SDNY and the 2nd Circuit decided that the compulsory license provisions were not meant to apply to internet re-broadcasting. See WPIX, Inc. v. ivi, Inc., 691 F.3d 275, 285 (2d Cir.2012).
So here’s one consumer hoping that NimbleTV will work out some sort of distribution agreement with the cable companies before it gets sued.
If HBO decided to monetize its app, NimbleTV’s fair use argument would not hold up, says Tim Bukher, a lawyer specializing in intellectual property and technology at Handal & Morofsky.
“Since HBO is the content owner, it is within their right to say, ‘No, you’re not going to provide something we’re going to provide that we’re trying to make money off of,” Bukher says. “At the end of the day, they are the copyright holders so they get carte blanche in the ways they want to exercise their copyrights.”
Last week the Internet Corporation for Assigned Names and Number (ICANN) announced the latest expansion in available gTLDs (e.g., .com, .net, .gov are all “generic Top-Level Domains”). The internet is now abuzz with articles questioning whether this massive expansion of potential trademark infringement urls spells the end for brand owners as we know it!
It does not.
While it is true that, for example, the owner of the ACME trademark (and owner of the acme.com domain) may now have to worry about potential competitors registering, say, acme.widgets, this isn’t all that problematic for two reasons:
- The gTLD sunrise period gives trademark owners 30 days (as of the start of last week) to petition ICANN for the exclusive rights to any gTLDs that potentially infringe with their registered marks. So Mr. ACME can go ahead and secure the rights to acme.widgets, acme.products, acme.store, and anything else he feels might be used by potential infringers to dilute his products.
- It remains the case that the .com gTLD is still trusted by the vast majority of users as the “official” home for any given brand. As far as internet culture goes, users are just much more likely to go to ACME.com and look for the “store” link than to assume that ACME’s official store would be at acme.store.
The cultural norm in #2 could of course change, but this would be less and less likely in the event that gTLD-alarmists prove correct. Meaning, if these new gTLDs are in fact rampantly used by infringers then internet users are more likely to associate the .com gTLD with the only gTLD that they could trust for any given brand.
For those of you who know me (or have read my bio), you know my obsession with the fine art of Brazilian Jiu Jitsu. And what do you know, I got an email from the American Bar Association today promoting a new book published by fellow attorney Ryan Danz entitled “How Brazilian Jiu Jitsu Can Make You a Better Lawyer.”
According to the press release:
Notable attorney, entrepreneur, and world-wide celebrity Ryan Danz discusses the martial art of Brazilian Jiu Jitsu and demonstrates how one of the most complete-yet still relatively unknown-martial arts disciplines in the world can make you a better lawyer! You’ll discover how to:
Transition from the “Lawyer’s Mind” to the “Jiu Jitsu Mind”
Become a better, more focused, less ego-driven professional
Grow into a more self-esteemed lawyer, professional, and person overall
Honestly, I have no idea if the book is any good but would certainly recommend that my colleagues grab a copy anyway and find out. BJJ really does seem to bring out the above three bullet points in all of the people I know who practice it. In any case, I’ll pick up a copy if only because (i) Mr. Danz preempted my idea, and (ii) it’s very cool to see the sport catch on in our professional circles.
P.S., the book cover image is too small to say for sure, but is that a bit of cauliflower I see on Mr. Danz? If so… bad-ass!