Theatre Catalog (1949-50)

The Legal Position of Design Patents The Noted Case of Loew’s Drive-In Theatres, Inc.,* vs. Park-In Theatres, Inc.,** is Briefly Reviewed Briefly, the facts and issues are these: Park-In Theatres, Inc., hereinafter referred to as Park-In), a New Jersey Corporation, is the present owner of a United States patent for drive-in theatres, which was originally issued to one Hollingshead. In 1937, Park-In licensed Loew’s Drive-In Theatres, Inc. (hereinafter referred to as Loew’s) to operate a drive-in theatre in Providence, R. I. Loew’s was to pay a percentage of its gross receipts to Park-In as royalties. Loew’s paid these royalties for the year 1937, but when it reopened the theatre in 1938, it refused to continue to pay, on the advice of counsel that the license was illegal and that the patent was invalid because it did not involve a “patentable” invention. Park-In immediately cancelled the license and started legal action to collect unpaid royalties, plus damages for patent infringement because Loew’s kept the drive-in theatre open after the license had been cancelled. The main defense which Loew’s raised to both claims was that the Hollingshead patent was invalid because it was not issued for a “patentable” invention. The lower court found for Park-In, to wit, that the patent for the drive-in theatre structure was valid, since the development of the drive-in theatre required an exercise of the “faculty of invention.” Loew’s appealed from that decision to the Circuit Court, which reversed the lower court. It conceded that a drive-in structure could be the subject of a valid patent, but it held that this particular drive-in theatre structure could not be because there was nothing “inventive” in it. The Court discussed the three main features of the Hollingshead drive-in theatre patent as follows: (1). The arrangement of the cars in an are around the screen: “But nevertheless there is nothing inventive in adpating the old arcuate arrangement of seats in a theatre to automobiles in a parking lot as the means to achieve horizontal pointing.” (2). The arrangement of cars on a slope or grade: “Certainly terracing the parking lot as the means for giving occupants of cars in the rearward rows of stalls a clear field of vision over the tops of cars in front is not inventive. It is again only an adaption of the familiar sloping floor of the conventional theatre.” (3). Tilting the front end of the car upward toward the screen by park ing the car on an inclined plane or mound: . * These are the E. M. Loew (Boston) interests, not to be confused with Loew’s, Inc. Z Decided by the United States Court of ppeals in the First Circuit, April 8, 1949, 1949-50 THEATRE CATALOG By Herman M. Levy General Counsel, Theatre Owners of America, Ine. BRIEF: As an interesting sideshow to the feature attraction . .. the growth of the drive-in theatre industry during the past decade . . . a heated controversy has raged over the legality of the original Hollingshead patent . .. a claim made for the retention of exclusive inventor’s rights on the general layout of an outdoor showplace . . . Park-In Theatres, Inc., . . . present owner of the patent... has waged a heated battle in the courts .. since 1938 ... to compel Loew’s Theatre’s, Inc., to continue royalty payments for use of the patent ... and to make reparations for use of the same after patent license privileges had been revoked. Finally, after numerous hearings by, and appeals to, various courts . . . including the U. S. Supreme Court , . . there appears to have emerged what may be the close to a long-disputed case ... At any rate... m spite of the fact that drive-in. construction has gone its way without much concern over the outcome of the case... there seems to be little reason for owners to fear that they will ever be called before the Bar of Justice +». to account for usurpation of a sound design patent. “Again the problem of accurate aiming due to the limitation imposed upon the field of vision by the windshield is present. But again, as in the matter of horizontal pointing, solution of this problem does not seem to us to call for an exercise of the inventive faculty.” ABOUT THE AUTHOR Herman M. Levy received. a B.A. degree from Yale University in 1927 with Phi Beta Kappa standing. After graduation from Yale Law School in 1929 he worked as an attorney for RCA Photo Phone, at a time when motion picture talking equipment was first being marketed, In 1930 Levy began practicing law in New Haven and has been an attorney in motion picture industry matters since that time. He was elected Executive Secretary of the Motion Picture Owners of Connecticut in 1939 and still serves in that capacity. The year 1946 saw Levy elected General Counsel of Motion Picture Theatre Owners of America, a post which he held in 1947 also, In September of that year, when the American Theatres Association and Motion Picture Theatre Owners of America were merged, he was elected General Counsel, Theatre Owners of America, The theory of patents under which the Court acted, and its conclusion, may be briefly summed up in its own words: “An idea of itself is not patentable, but a new device by which it may be made practically useful is.” “In view of our own analysis of Hollinghead’s means, we are of the opinion that the ultimate finding of the court below, that an exercise of the faculty of invention was required to devise these means, was clearly erroneous.” At the time of the rendering of the decision’on appeal, some confusion arose in exhibitors’ thinking because of what appeared, at first, to be an inconsistency between that decision and that of ParkIn Theatres ys. Rogers, 130 Fed. (2) 745 (California). The latter involved substantially the same issues as the Loew’s case, but, in the California case, all the Court decided was that a drive-in theatre structure could be the subject of a patent, (but it did not decide whether or not the Hollingshead drive-in theatre was patentable) because the Court did not have before it the evidence to decide whether the exercise of the “faculty of invention” was required by the Hollingshead drive-in theatre. In the Loew’s case, the Court did have that evidence and decided in the negative. There is an unwritten principle, based on experience and history, that where there are two or more inconsistent decisions by Federal Circuit Courts, the Supreme Court of the United States will often be inclined to hear an appeal in order to clear up the confusion. Comparing these two decisions, however, no inconsistency can be found. The Supreme Court refused to hear the appeal.*** The Court, as customary, gave no reasons for refusing to do so. Park-In, the owner of the patent, after the denial by the U. S. Supreme Court to grant it the privilege of appeal, filed an application with that Court requesting it to reconsider its decision. The application for reconsideration was turned down by the Court on Monday, December 5, with no memorandum, It is not wise to predict what courts will do if Park-In decides now to sue others who have refused to pay royalties, or for damages for infringement. It is not unlikely, however, that courts will be guided substantially by the decision in the Loew case and by the refusal of the U. S. Supreme Court to hear the appeal, and by its refusal to reconsider that denial. 3% Appeal to the Supreme Court of the United States in this type of case, as in most others, is not a matter of right. The Supreme Court has to grant permission for the takin of the appeal. ct 165