International projectionist (July-Dec 1934)

The Industry Re-Discovers Mr. Fox and Tri-Ergon James J. Finn NO other industry, save possibly that of automobiles, is so dependent upon technological progress as is that of motion pictures. Yet the picture industry is what might be charitably termed a technical bum, in the sense that it knows neither the whys nor the wherefores of the technical aspects of the art. Essentially a business of ballyhoo and false front, the industry has ever been prone to water the leaves and ignore the roots. The enormous amount of punishment absorbed by the industry in the process of adapting itself to sound pictures is sufficient proof of the foregoing. And the end is not yet. Thus, when the Tri-Ergon patent mess, brewing for years but ignored by the "best minds" in this field, burst full force upon it, the industry was totally unprepared to sustain such a shock. How could something concerning which they knew nothing deliver such a crushing blow? Even now, after the TriErgon chickens have come home to roost, the industry is enveloped in a haze of doubt, fear and speculation, created largely by much misinformation fed to it supposedly on the inside. The Tri-Ergon Background The background of the Tri-Ergon patents must be sketched briefly before one can appreciate the existing situation. What are the Tri-Ergon patents? They comprise a group of 23 patents which reflect the technical abilities of three Europeans, by name Hans Vogt, Joseph Massole and Josef Engel. Swiss Tri-Ergon Co. was formed, in Switzerland, to hold these patents. Subsequently this company sold to William Fox, then head of Fox Film Corp., a ninety per cent stock interest in the American rights to these patents. American Tri-Ergon was formed in this country. Fox is reported to have agreed to promote the use of Tri-Ergon equipments in this country within a specified time limit, since twice extended. Thus, it appears that Fox holds not an ownership right but merely a promotion interest in the patents, his revenue ostensibly to come from the leasing of equipments in 1 America. This is a moot point; and Fox is saying nothing. Of interest is the fact that along about 1926 the 23 Tri-Ergon patents were hawked on numerous counters in America, the absence of any takers ultimately forcing the price down to a reported $1,500 apiece, which is what Fox is said to have paid for them. Many large companies looked into the patents, RCA and Western Electric included, but evidently considered them of little value. William Fox thought otherwise, and he bought. Later on came the terrific battle for control of Fox Film Corp., the end of which saw Fox out on the street through a "settlement" reputedly involving his receiving §500,000 annually — plus the Tri-Ergon patents, to which scant attention was paid. Fox never denied that he used Fox Film Corp. money to purchase the patents, which circumstance leads to the report in certain quarters that the latter will now contest the ownership of the patents. Fox, on the other hand, holds that the failure of Fox Film Corp. to pay him any part of the promised annuity of $500,000 gives him title, free and clear, to the patents, even though bought with money from the till of the corporation which he headed. It isn't at all necessary to read between the lines in the book "Upton Sinclair Presents William Fox," published three years ago, to learn that Fox, who admittedly supplied the data to Sinclair, took leave of Fox Film Corp. nursing anything but kindly feelings for those who, he asserted through Sinclair, "engineered" his precipitate departure fiom motion picture activities. Fox displayed a particular peeve against Electrical Research Products. Once out of Fox Film Corp., Fox turned loose his vast energy on the task of regaining his place in the industry — through the medium of the Tri-Ergon patents. Fox has done a good job with Tri-Ergon. The well-informed never doubted that the patents possessed, at the very least, a vast potential nuisance value. The present writer takes a bow, having said more than three years ago: "Some day not far off the motion [7] picture industry will regret having glossed over the Tri-Ergon patents, now held by William Fox ... It is all right to boast of patent protection and to pooh-pooh the 'miserable' patents in this pool, but the effect of a successful patent foray by William Fox will jar this industry to its toes . . . "Outstanding among the Tri-Ergon patents is the so-called flywheel patent, which device is used by practically every worth while sound reproducing system ... It wouldn't surprise us at all if this particular patent ultimately is adjudged valid . . ." After a few preliminary skirmishes, Fox launched a stiff patent offensive against Paramount on the double-print process (defended by Erpi), and against certain Pennsylvania theatres on the use of the flywheel (defended by RCA). Of. particular interest to the reproducing field is the latter patent, U. S. 1,713,726 issued on May 21, 1929, to Hans Vogt. The aforementioned actions were fought through the courts, and finally the U. S. Supreme Court refused to review a decision by the U. S. Circuit Court of Appeals which held the TriErgon patents to be valid. What does this mean? Significance to Industry In the case of production it means that the process of simultaneously recording sound and picture on separate negatives and the simultaneous printing of the same on one print is covered by the Tri-Ergon patent now adjudged valid. When a patent is held to be valid, does this also mean that it is held to have been infringed? The answer is NO. Infringement is something still to be proved by Fox, and this he has already set about doing by filing suits, involving accountings, against certain major producers and laboratories. What if the Tri-Ergon double printing patent be adjudged infringed? Fox could then force an accounting on back royalties covering the period during which the process was used, and he could proceed to write his own ticket for future use of the process. Erpi is generally regarded as having contractually guaranteed patent protection to its producer licensees, and if this be