In the District Court of the United States, for the Eastern District of Pennsylvania, the United States of America, petitioner, vs. Motion Picture Patents Company, et al., defendants (1914)

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2506 Petitioner's Exhibit No. 263. manufacturers not to rent out the pictures below the agreed minimum rental schedule. (2) Any exchange cutting prices, offering special inducements to exhibitors or in any other way violating its agreements with the manufacturers, shall be immediately cut off and will not thereafter be recognized by any of the licensed manufacturers. (3) The exchanges agree with the licensed manufacturers to return every film purchased from them within a specified time. (4) The manufacturers will not in any way recognize exchanges dealing directly or indirectly in infringing films, and the exchanges in turn agree that they will supply films only to exhibitors who use licensed pictures exclusively. We are assured by counsel that the above conditions are in every respect entirely legal and that any violation thereof can be proceeded against by an action for infringement of the Edison patents. In this connection a few decisions of the United States Courts may be briefly referred to. In Bement & Sons vs. National Harrow Co. (186 U. S. 70), the Supreme Court of the United States said: "The provision in regard to the price at which the licensee would sell the article manufactured under the license was also an appropriate and reasonable condition. It tended to keep up the price of the implements manufactured and sold, but that was only recognizing the nature of the property dealt in, and providing for its value as far as possible. This the parties were legally entitled to do. The owner of a patented article can, of course, charge such price as he may choose, and the owner of a patent may assign it, or sell the right to manufacture and sell the article patented, upon the condition that the assignee shall charge a certain amount for such article.'' Vict or Talking Machine Case. In Victor Talking Machine Company vs. The Fair (123 Federal Reporter, 424), the United States Circuit Court of Appeals in Chicago said: "Within his domain, the patentee is czar. The people must take the invention on the terms he dictates or let it alone for seventeen years. This is necessary from the