Views and Film Index (1908)

Views and Films Statement by the Licensed Manufacturers. To the Exhibitors of Moving Gentlemen : A brief statement of the develop¬ ment of the motion picture art, and specially of its relation to the actual 'Usiness conditions at present existtig, and also an explanation of the ffort recently made to better those onditions referred to in the public ress, will be of interest to all exibitors. The modern art of reproducing ani¬ mate motion photography was inented and to a large extent made ommercially possible by Thomas A. tdison. Patents were granted to him overing, first, the camfera used for ecuring the pictures photographicalY, and, second, the motion picture lm as a new product. These patents xpire in August, 19T4. We are adised by counsel that no practical and atisfactory camera can be used in this ountry that does not infringe the Edison camera patent, and that no lotion picture film is now made that oes not infringe the Edison film patnt. Every motion picture film in use )-day, whether produced in this nuntry or imported from abroad, is ndeniably an infringement on the dison film patent. Upon the issue of the Edison patits, suit was commenced against a lanufacturer of films for infringeent of the Edison camera patent, id after many years of litigation and ie expenditure of many thousand illars, the suit was decided in our vor, and the patent was held to be fringed by the United States Circuit ourt of Appeals in New York. We fe advised that this decision carries ith it a substantial recognition of Je Edison film patent, since the film j the product of the Edison camera, hose novelty and patentability have :en judicially determined. During the litigation in question, imerous other manufacturers enred the field, which we were powerss to prevent, since it was first i cessary that the original suit should i pressed to a final conclusion before (hers could be prosecuted with any jobability of success. The business jjew to very large proportions, film (changes were inaugurated, and sevlal thousand exhibitors sprang up 1 over the country. Two years ago action picture shows were in great I blic demand, but at the present Ine they have fallen into disfavor if it actual disrepute. The reason for tis change is not hard to find. DeS’uctive and unbusinesslike competit>n among the exchanges in the efifrt to secure new business, involvfe the renting of reels below the actil cost of the service, has made it fcess'ary to keep on the market worn Pictures in the United States. out and damaged films that have long since lost their usefulness. A show in which such films are used can only do harm to the business. Every one having the vital interests of the busi¬ ness at heart must know that if the public is to be instructed and amused it must be by the use of films of high quality, in good condition and of novel and ingenious subjects. Al¬ though every one recognized this fact, there seemed to be no remedy, and the conditions went on, pulling the business down to a lower plane from month to month. With the sustaining of the Edison camera patent and the strong proba¬ bility that the Edison film patent would also be upheld by the courts, the important and responsible manu¬ facturers in the country were wise enough to see that those patents would have to be acknowledged, and consequently applications for licenses were made to us. It was then recognized that by pro¬ perly limiting the conditions of these licenses the evils that have invaded the business could in a large measure be overcome, and the business be eventually placed on a high and legiti¬ mate plane. Licenses have therefore been granted to the following concerns, which, with the Edison Manufactur¬ ing Company, are alone authorized to manufacture or sell non-infringing films in this country: Essanay Company, Kalem Company, S. Lubin, G. Melies, Pathe Freres, Selig Polyscope Company, Vitagraph Company of America. Under the licenses which have so far been granted, involving the pay¬ ment of royalties for the use of the patents, we have required that certain conditions shall be strictly observed, the most important of which, to the exhibitor, are the following: (1) Licensed motion pictures are sold only to licensed exchanges, who shall agree in writing with the sev¬ eral manufacturers not to rent out the pictures below the agreed minimum rental schedule. (2) Any exchange cutting prices, offering special inducements to ex¬ hibitors or in any way violating its agreements with the manufacturers, shall be immediately cut off and will not thereafter be recognized by any of the licensed manufacturers. (3) The exchanges agree with the licensed manufacturers to return every film purchased from them with¬ in a specified time. (4) The manufacturers will not in any way recognize exchanges dealing directly or indirectly in infringing films, and the exchanges in turn agree that they will supply films only to ex¬ hibitors who use licensed pictures ex¬ clusively. We are assured by counsel that the above conditions are in every respect entirely legal and that any violation thereof can be proceeded against by an action for infringement of the Edi¬ son patents. In this connection a few decisions of the United States Courts may be briefly referred to. In Bement & Sons vs. National Har¬ row Co., (186 U. S. 70) the Supreme Court -of the United States said: “The provision in regard to the price at which the licensee would sell the article manufactured under the license was also an appropriate and reasonable condition. It tended to keep up the price of the implements manufactured and sold, but that was only recognizing the nature of the property dealt in, and provid¬ ing for its value as far as possible. This the parties were legally en¬ titled to do. The owner of a pat¬ ented article can, of course, charge such price as he may choose, and the owner of a patent may assign it, or sell the right to manufacture and sell the article patented, upon the condition that the assignee shall charge a certain amount for such article.” In Victor Talking Machine Company vs. The Fair (123 Federal Reporter, 424) the United States Circuit Court of Appeals in Chicago said : “Within his domain, the patentee is czar. The people must take the invention on the terms he dictates or let it alone for seventeen years. This is necessary from the nature of the grant. Cries of restraint of trade and impairment of the freedom of sales are unavailing, because for the promotion of the useful arts, the Constitution and Statutes authorize this very monopoly.” The same high Court in Rubber Tire Wheel Co. vs. Milwaukee Rubber Works Co. (154 Federal Reporter, 358) said: “Under its Constitutional rights to legislate for the promotion of the useful arts, Congress passed the pat¬ ent statutes. * * * * Congress put no limitation, except time, upon the monopoly. Courts can create none without legislating. The monopoly is of the invention, the mental con¬ ception as distinguished from the materials that were brought to¬ gether to give it a body. * * * * Use of the invention cannot be had except on the inventor’s terms. Without paying or doing whatever he exacts no one can be exempted from his right to exclude. What¬ ever the terms, Courts will enforce them, provided only that the li¬ censee is not thereby required to violate some law outside of the pat Index ent law, like the doing of murder or arson.” See also : Edison Phonograph Co. et al vs. Kauf man, 105 Federal Reporter, 960. Edison Phonograph Co. et al vs. Pike, 1 16 Federal Reporter, 863. National Phonograph Co. vs. Schlegel, 128 Federal Reporter, 733. While, therefore, under our legal and constitutional authority as the owner of the Edison patents, condi¬ tions and limitations might have been lawfully imposed which would have been harsh and onerous, we have sought only to exercise our rights in the premises to the extent of enforc¬ ing such conditions as will inure to the best interests of the business. The conditions which we have imposed will without doubt be of great advan¬ tage to the exhibitors, as they will oblige the exchanges to give better service and will prevent them from renting films for more than a limited time. This is bound to mean a won¬ derful improvement over present con¬ ditions. The exchanges of this country (who have recently formed an association under the name of the “Film Service Association”) have admitted that the conditions imposed by our licenses represent the only possible way to save the business of the exhibitor and the exchanges from ruin. For this reason they have decided to use exclusively licensed motion pictures manufactured under the Edison pat¬ ents, and they have agreed to be bound by contracts of sale imposed by the undersigned and the seven li¬ censed manufacturers above referred to, in which the conditions imposed by our license are expressed. The position of each exhibitor who may wish to handle licensed pictures and avoid the danger and expense in¬ volved in using infringing pictures, will be as follows: (1) The exhibitor will have to rent films exclusively from exchanges who have agreed by contract to conform to the conditions imposed by the li¬ censes, under the Edison patents. (2) The exhibitors will have to pay for service not less than the agreed minimum rental schedule. (3) Each exhibitor will have to sign a contract for each of his shows, with his exchange, for licensed motion pic¬ tures, such contract obliging the ex¬ hibitor to give a guarantee bond and preventing him from sub-renting films which are supplied to him. For our part we have obligated our¬ selves, so far as lies within our power, as the owners of the Edison patents, to protect our licensees, whether they be manufacturers of licensed films, ex¬ changes exclusively handling the same or -exhibitors using them, and we pro¬ pose to institute suit against manu¬ facturers and importers of infringing films, as well as against exchanges When writing advertisers, kindly mention Views and Films Index.