International projectionist (Jan-Dec 1955)

The Development of the Motion Picture Projector The concluding article of two which trace the development of the first truly practicable motion picture projector, as recounted by a world famous practitioner in the art. By THOMAS ARMAT 'l^HE RAFF and Gammon licensing A arrangement started off auspiciously and financial returns were satisfactory, but troubles developed shortly. None of my patents had been issued at that date, and the applications were still pending in the patent office, two of them involved in "interferences". No patent protection could be given until patents actually issued. Piratical machines began to appear, and in the absence of patents, could not be stopped. Later on, the Edison Co. began to be slow in supplying films. For this reason, among others, friction developed between the Edison Co. and Raff and Gammon. Still later, the Edison Co. began to market a machine that infringed my pending patents. As soon as my patents issued, I organized a company to which I transferred my patents. Warnings were sent to infringers, and legal suits were filed. Often the suits were rendered fruitless by the simple expedient of "fading-away:' by the sued infringer. The Edison Co. was making and selling many machines, called Projectorscopes, which infringed no less than three of my patents. Bitter Legal Battle Begun We demanded from users of the machines prompt payment of royalties. The Edison Co. notified users of Projectorscopes that they would be protected against any legal suits. That made it obligatory that we sue the Edison Co. Meanwhile, a suit we had brought against the Biograph Co. was decided in our favor, the defendant being enjoined. On the strength of that decision, an injunction was obtained against the Edison Co. The later had pending in the U. S. Patent Office an application covering the only successful method of taking motion pictures, plus an application covering the perforated film. So long as the Edison Co. and we were fighting each other, no exhibition could be given without risking a suit by one side or the other. I repeatedly emphasized to Edison the obvious advantages of our getting together on some basis that would not involve the sale of projection machines; but without avail. After we obtained the injunction against Edison, they tried in devious ways to obtain a license from my company under which they would be permitted to sell machines. I would not agree. From the beginning I refused to sell machines, or to license others to do so, because I felt that whatever advantage we had under our patents would be destroyed thereby; also, I felt that any profit we might make out of outright sale would not be remotely commensurate with continuing earning power. I wanted a royalty from exhibitors, small enough in itself, but which in the aggregate would net a handsome income. Biograph and Edison Sued The suit against Biograph was for an injunction and damages of $150,000. Damages were also asked of Edison. Both companies posted bonds and prepared appeals. While damages in patent suits are rarely collectible, a favorable decision in an injunction suit where damages are claimed creates a very uncomfortable feeling on the part of the defeated party and by the holders of any of their securities. The American Mutoscope and Biograph Co. had outstanding a bond issue of $200,000. Some of the bonds were held by the Empire Trust Co., of New Courtesy, Ray Brian, Local 434 The Armat "Vitascope," first used publicly in 1896, established the basic principles of motion picture projection and inaugurated the commercial phase of the film industry. York, who took notice of the success of our suit for injunction and damages against the Biograph Co. After consultations with all interested parties, a stock company was formed to take over all valuable patents in the art, the stock to be distributed to the patent owners. It was a closed corporation: the stock was placed in escrow, and none of it was sold. This holding company was the Motion Picture Patents Co; and the principal beneficiaries were the Edison Co., the Biograph Co.. and Armat Moving Pictures Co. I owned most of the stock in the latter. The Patents Co. was an immediate success. The royalties collected put no burden upon the industry, but resulted in a large net revenue to the Patents Co. A royalty of %c a foot was paid by the producers, and a royalty of $2 a week was paid by the exhibitors. 'Nickleodeons' Pay Royalty When the Patents Co. was formed, there were in the U. S. A. between 10and 12.000 small theatres, or "nickleodeons," as they were called. The royalty of $2 weekly was a negligible sum to them; but as it was collected without cost to the Patents Co. by the simple expedient of having the distributors add this amount to their weekly film rentals, it amounted to a practically net revenue of between $20 and .«24.000 weekly. The revenue of %c a foot as film royalties also amounted to a handsome total. Unfortunately for the stockholders of the Patents Co., its life was rather a short one. Some of the producers, for reasons I never quite understood, were refused licenses by the Patents Co. These producers, calling themselves "independents." formed an organization and put up an all-around fight. At that date anything that smacked of being a monopoly or trust was very unpopular with both the public and the courts. Patents Company Dissolved The "independents" charged the Patents Co. with being an unlawful monopoly under the Sherman anti-trust law. and instigated a suit by the Government against them. Judge Dickinson decided, in substance, that while a patentee had a legitimate monopoly within his patent claims, he could not. under the Sherman Act, lawfully combine his patent with other patents. The Patents Co. was ordered dissolved. I have always felt that Judge Dickinson's decision was largely influenced by the fact that the Edison Co. had sold thousands of projection machines without restrictions as to their use, in some instances guaranteeing the right to their (Continued on page 29) INTERNATIONAL PROJECTIONIST • APRIL 1955 15