Year book of motion pictures (1925)

by the use of plaintiff's name. The unauthorized use of plaintiff's name in connection with a story of a different title was a distinct damage to the plaintiff," This decision was reached after due considera tion, the contentions of the respective parties being exhaustively briefed and argued at length before the Court. The decision with respect to the spurious title is pecularily interesting because in the briefs and in the argument the attention of the Court was directed ' to a number of well-known photoplays which have been ex hibited under titles entirely different from those of the books on which they were based. Apparently, the Court did not feel that any custom had been shown which would control in the interpretation of contracts. As a result of this decision, motion picture producers are put squarely on notice that when they buy the motion picture rights for a story, what they buy is nothing more than the right to make a picture based upon such story, and to exhibit it under the litie of the story. If they desire to acquire any larger rights, they must be careful that such rights are explicitly provided for in the contract tor motion picture rights. WILLIAM M. SEABURY The final chapter of the case of Binderup vs. Pathe and others which had been pending in the courts since 1920 was. written in the second trial of that case which occurred at Omaha, Nebraska in the months of May and June, 1924. At the close of all of the evidence the plaintiff could offer there was the usual motion for a directed verdict in favor of the defendants which, after several days of argument, the Court granted. The grounds of the decision were that the acts of the plaintiff in establishing and maintaining his so-called circuit restrained and restricted competition in Nebraska and that the simultaneous refusal on the part of practically all of the national distributors of motion pictures to rent their films or license the plaintiff to sub-rent them to members of his circuit did not restrain trade or restrict competition But on the contrary promoted and stimulated it, as was indicated by the undisputed fact that after defendants refused to permit the plaintiff to sub-rent their films to members of his ■ circuit not a theater of any circuit member closed and instead of the entire business of all the theaters on the circuit being transacted by the three or four distributors with whom the plaintiff dealt, every distributor competed actively with each other for the trade and business of the entire circuit and its individual members. The legality of the acts of the Omaha Film Board of Trade in this case as well as the legality of the refusal of the defendants to supply the plaintiff with film service except upon security acceptable to them, was also upheld. In this connection, the Court said: "The recommendation that was implied in the circulation of the Blue List appears to me to be such a recommendation as such a body could lawfully make. We have had many cases cited here where the circulation of blue or black lists formed a part of the transaction and proof. It all depends on what the meaning and purpose of the blue list is. If the blue card is distributed as it was in the Druggists Case * * * to help in the conspiracy to suppress and stifle competition ; it had a tendency to work that end ; that was its purpose, so understood by the recipient. In this case it appears to have meant no more than that the Board of Trade and its com mittee had investigated charges against Mr. Binderup and thought they were true and thai on account of his practices they recommended that security be taken from him." The proof of the plaintiffs alleged damages indicated a lack of any injury to the plaintiff result ing from any unlawful acts of the defendants and upon the plaintiff's own proof the jury were di rected to find for the defendants which they did. Joint Adventures in Motion Picture Rights One of the most important decisions of the year is the case of Underbill vs. Schenck in tlie New V«,rk Court of Appeals in April, 1924 (238 N V . 7). It appears that Underbill bought front Jacinto Beneventi, a Spanish playwright, the right to translate the play "La Malquerida" and to produce it upon the English speaking stage. Thereupon Underbill made a contract with Herndon under which Underbill licensed Herndon to produce upon the stage the play which had been trans lated into English, and retitled as "The Passion Flower," in the United States and Canada. The contract expressly declared that "no right to the production of the play in motion pictures are conveyed by this agreement." The play was produced upon the stage and was an immediate and great success. Both U/nderhill and Herndon naturally wished to extend their successful activities and determined to produce the play in motion pictures but it was not unnaturally suspected that the production of the play in pictures might be unauthorized by the owner of the picture rights. Benaventi. and unfair to him since the picture might and probably would compete unfairly with the stage version of the same play. Underbill and Herndon thereupon entered into another contract whereby they agreed subject to Beneventi's approval to held the picture rights for their joint account, the profits of the enterprise to be subject to a prescribed division. But Benaventi declined to consent because he had already disposed of his rights to one Gonzalez. When Underbill ascertained this fact he notified Herndon that the contract would be cancelled but even before the notice reached Herndon he had already sought out Gonzalez and was negotiating with him for an assignment of the picture rights to himself. Herndon obtained the rights and proceeded to deal with them as his own. Hendon sold these rights to Joseph Schenck for $25,000 under a contract in which Herndon represented himself to be the sole owner of the rights and agreed to procure Underbills' written consent to the use of the title "The Passion Flower." Underhill refused to consent hut notwithstanding his refusal Schenck proceeded and late** caused the picture to be exhibited. Underhill sued Herndon and Schenck for an accounting of the profits and damages Underbill had sustained by reason of these facts. Herndon w a s held to pay Underhill $22,500, the full amount paid to him bv Schenck less brokers' commissions of $2,500 while Schenck was held for $1,362.41, the net profits of the picture after charging the $25,000 paid to Herndon -as one of the expenses of production. This judgment was modified by the Court of Appeals by requiring Herndon to account only for so much of the profits resulting from a sale of the picture rights as might equal the sum that would be payable to Underbill if the receipts of the picture were added to and formed a part of the receipts of the spoken play. The significance and importance of this decision to the motion picture industry is the announcement based upon the decision of the Supreme Court of the United States in Manners vs. Morosco (252 U. S. 317) that a licensee of the right to produce a drama on the stage is not at liberty to produce the same play in motion pictures with out the consent of the author or owner of the conyright, with the equally important announcement that the author or owner who has licensed and authorized the s'age production of a drama, is himself under a disability to produce the play in motion pictures since in so doing he would compete unfairly with the stage license. Even before the decision in Manners vs. Morosco, Judge Hough in Harner Bros. vs. Klaw. (232 Fed. 609. 613) which related to Ben Hur. had held that there is an implied, a negative covenant on the part of the (grantor) not to use the ungranted nortion of the copyright estate to the detriment if not destruction of the licensee's esate. The Court held that Herndon ns the stage li censee of Underhill even though he had bought the picture rights from Gonzalez had no right to produce in pictures without the consent of Underhill who owned the right of stage production 619