Motion Picture Herald (Jan-Feb 1939)

January 7, 1939 MOTION PICTURE HERALD 29 $532,153 AWARDED AGAINST MCM IN "LETTY LYNTON" PLAGIARISM CASE Arnold Sets Up a Strong Position On Consent Decree in U. S. Trust Cases Declaring that the full potentialities of a consent decree in federal trust cases can be realized only through concurrent use of both criminal and civil procedures, Assistant Attorney General Thurman Arnold, head of the U. S. Department of Justice anti-trust division, this week restated the four principles by which he will be guided in accepting a consent decree in such cases, presumably including the one now pending against the motion picture business. Discussing the monopoly situation in his annual report, Mr. Arnold disclosed that four new prosecutions are being readied for presentation to the federal courts, but did not disclose the groups which are to be attacked. To attain the objectives aimed at by the Department, he asserted, it will be necessary further to increase the staff of the anti-trust division, now employing 97 lawyers, and secure amendment of the anti-trust laws as current cases disclose weaknesses in those statutes as applied to particular industry. Mr. Arnold's recommendation for specific application of the monopoly laws to individual industries was seen in Washington as presaging a drive for divorcing exhibition from production or for the outlawing of block booking in the event the film suit fails to achieve those aims. Discussing the attitude of the Department toward consent decrees, the Assistant Attorney General stated the proposal for a consent decree must be voluntary, explaining that this means that "the Department will in no instance start negotiations or suggest compromises on the basis of which prosecution would be dropped"; the Department will not compromise criminal cases on the mere promise to reform; it will accept only proposals which restore competitive conditions in a way which could not be accomplished by prosecution; and it will submit all such proposals to an impartial judicial tribunal and thus be guided by the judgment of the court before it takes final action. And, once committed to accceptance of a consent decree, the Department will issue a public statement giving the reasons for its action. "At all times," Mr. Arnold declared, "the test of whether a consent decree should be accepted must be whether it will benefit the public, not whether it will give relief to the Department," and "as so used, it is believed that the consent decree can be of assistance in realizing the balanced objective of checking monopoly control and industrial empire building, and eliminating economic toll bridges, while encouraging legitimate and efficient mass production and facilitating the maintenance of orderly markets. Possibly a program of this sort could be carried forward with even greater effect and economy if an appropriate power to implement the antitrust laws by rules and regulations were vested by law in some appropriate agency" he concluded. Damages in Favor of Edward Sheldon and Margaret Ayer Barnes in Copyright Suit Set All-Time Record Establishing an all-time high in the amount of damages awarded in a motion picture plagiarism suit, Federal Judge Vincent L. Leibell, in New York district court, last Friday, confirmed the award in favor of Edward Sheldon and Margaret Ayer Barnes for copyright infringement of their play "Dishonored Lady," by the Metro-GoldwynMayer film, "Letty Lynton." Judge Leibell reduced the award from the $587,604 suggested by Special Master Gordon Auchincloss to $532,153. MGM lost the suit last year, the present action determining the amount of damages. It is reported that an appeal will be taken, which would bring the case to the circuit court of appeals, from which, if another appeal were taken by either side, it would go before the United States supreme court. The case has been in the courts since 1934, when Judge Woolsey dismissed it, a decision which was reversed by the court of appeals. This court ordered the appointment of a special master to determine the film's earnings. "Dishonored Lady" had been a play which Metro-Goldwvn-Mayer had agreed to bu" for $30,000 if it could pass the industry's Moral Production Standards. Apparently it could not, and the deal was allowed to lapse. Subsequently the motion picture company purchased the rights to a novel, "Letty Lynton," by Mrs. Belloc Lowndes, based on the same theme, that of the murder trial of Madeleine Smith in Scotland in 1857. After deductions for taxes, overhead, and the like, Judge Leibell found the profits to be: Metro-Goldwyn-Mayer Pictures Corporation, $248,095.09 ; Metro-Goldwyn-Mayer Distributing Corporation, $59,570.63 ; Loew's, Inc., $84,209.51, Culver Export Corporation, $140,278.25. Additional assessments against the defendants include $55,000 for O'Brien, Driscoll and Raftery, attorneys for the plaintiffs, scaled down from a request for $135,000, and $15,305 for Mr. Auchincloss, cut from a request for $20,000. Judge Leibell, in his report, said: "In my opinion it is punitive and unjust to award all the net profits of the motion picture 'Lettv Lynton' to the complainants in this case. Yet under the wording of the Copyright Act as interpreted by the decisions of the appellate courts, I can do nothing less. The rule for apportioning profits, followed in patent infringement cases, should not be difficult of application to copyright infringement cases." The major companies are now seeking to have the copyright laws amended. Judge Leibell's reference was to the fact that in patent cases the courts had worked out a theory of apportionment to determine the exact amount representing the value contributed to an article by the particular invention used without permission. He added: "An allowance to complainants of 25 per cent of the net profits, as restated, or about $133,000, would be such a sum as could be justly fixed as a limit beyond which complainants would be receiving profits in no way attributable to the use of their play in the production of the picture." Three More Suits Concern Copyright Sonja Henie has been made co-defendant in Fred Walton's suit against Twentieth CenturyFox in which he alleges that the plot of the film "Thin Ice" was plagiarized from his play "Weather Permitting", according to International News Service. The suit was filed in federal court in Chicago in November, but Mr. Walton's attorney did not ask that Miss Henie be made a co-defendant until last Thursday. Last week a copyright infringement suit was filed in federal court in South Bend, Ind., by Bernard Huff and Forest O. Bobitt against Bing Crosby, Paramount Publix Corporation and W.' C. Kolhurst, operator of the Fairy, Napanee, and Saintly-Joy Select. The plaintiffs claim infringement of the song "I've Got a Pocketful of Dreams" in "Sing You Sinners." With action still pending on a charge of un fair competition, the copyright infringement case brought by Dolores Lacy Collins against Metro-Goldwyn-Mayer Pictures Corporation, Metro-Goldwyn-Mayer Distributing Corporation, Loew's, Inc., and Culver Export Co. with reference to the film "Test Pilot", has been dismissed by the court. Last week the application made by J. Robert Rubin for a $5,000 attorney's fee to be assessed against Mrs. Collins as the administratix of the estate of Jimmy Collins, was denied by Federal Judge Alfred C. Coxe, whose decision, however, allowed a renewal of the application on the completion of the case. New Pathe Plan Is Due January 1 5th The new plan for liquidation of Pathe Film Corporation is expected by company officials to be completed shortly after January 15th. It is understood the proposal will represent a substantial change from the original plan, which was rejected at a special stockholders' meeting December 13th.