Brief for the United States (1914)

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56 PART IV. licensed by the licensor under letters patent owned by it (p. 80). The license is under No. 12192 to lease licensed motion-pictures from the licensed manufacturers and to sublease said pictures. The license, however, is (1) subject to the conditions expressed in the license, and (2) to sublet pictures for use only on projecting machines licensed by the licensor. [Note that the only patent under which the exchanges are licensed is the negative film patent, No. 12192. AVe maintain that the protection of this patent does not extend to the positive film, which is a different article from the negative film. The positive is the product of the negative. In its production the usual photographic processes are employed. The commerce restrained is the commerce in the positive. The Bathtub Trust " decision, supra, squarely decided that the ownership of a patent can not legalize restraints imposed upon the commerce in the unpatented product.] The rental exchange was compelled to agree to tlie following conditions inserted in the license: (1) Not to ])uy, lease, or otherwise obtain any motion-pictures other than licensed motion-piclures, and to dispose of motion-pictures only by subleasing under the conditions set forth in the contract, (('ondition 1.) (2) Tlic ownership of each licensed ni()ti(>n-])ictnre is lo remain in llie licensed uumnfaeturta*. (Condition 2.)