Motion Picture Patents Company

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The Motion Picture Patents Company (MPPC, also known as the Edison Trust), founded in December 1908, was a trust of all the major American film companies (Edison, Biograph, Vitagraph, Essanay, Selig, Lubin, Kalem, American Star, American Pathé), the leading distributor (George Kleine) and the biggest supplier of raw film, Eastman Kodak. The MPPC ended the domination of foreign films on American screens, standardized the manner in which films were distributed and exhibited in America, and improved the quality of American motion pictures by internal competition. But it also discouraged its members' entry into feature film production, and the use of outside financing, both to its members' eventual detriment.

The MPPC was preceded by the Edison licensing system, in effect in 1907–1908, on which the MPPC was modeled. Since the 1890s, Thomas Edison owned most of the major American patents relating to motion picture cameras. The Edison Manufacturing Company's patent lawsuits against each of its domestic competitors crippled the American film industry, reducing American production mainly to two companies: Edison and Biograph, which used a different camera design. This left Edison's other rivals with little recourse but to import foreign-made films, mainly French and British. Since 1902, Edison had also been notifying distributors and exhibitors that if they did not use Edison machines and films exclusively, they would be subject to litigation for supporting filmmaking that infringed Edison's patents. Exhausted by the lawsuits, Edison's competitors — Essanay, Kalem, Pathé Frères, Selig, and Vitagraph — approached him in 1907 to negotiate a licensing agreement, which Lubin was also invited to join. The one notable filmmaker excluded from the licensing agreement was Biograph, which Edison hoped to squeeze out of the market. No further applicants could become licensees. The purpose of the licensing agreement, according to an Edison lawyer, was to "preserve the business of present manufacturers and not to throw the field open to all competitors."

Biograph retaliated by purchasing the patent to the Latham film loop, a key feature of virtually all motion picture cameras then in use. After a federal court upheld the validity of the patent in 1907,[1] Edison began negotiation with Biograph in May 1908 to reorganize the Edison licensing system. The resulting trust pooled 16 motion picture patents. Ten were considered of minor importance; the remaining key six pertained one each to films, cameras, and the Latham loop, and three to projectors.[2]

The MPPC eliminated the outright sale of films to distributors and exhibitors, replacing it with rentals, which allowed quality control over prints that had formerly been exhibited long past their prime. The Patents Company also established a uniform rental rate for all licensed films, thereby removing price as a factor for the exhibitor in film selection, in favor of selection made on quality, which in turn encouraged the upgrading of production values.

Many independent filmmakers, who controlled from one-quarter to one-third of the domestic marketplace, responded to the creation of the MPPC by moving their operations to Hollywood, whose distance from Edison's home base of New Jersey made it more difficult for the MPPC to enforce its patents.[3] The Ninth Circuit Court of Appeals, which is headquartered in San Francisco, California, and covers the area, was averse to enforcing patent claims.[citation needed] Southern California was also chosen because of its beautiful year-round weather and varied countryside, which could stand in for deserts, jungles and great mountains.

The reasons for The MPPC's decline are manifold. The first blow came in 1911, when Eastman Kodak modified its exclusive contract with the MPPC, to allow Kodak to sell its raw film stock, which led the industry in quality and price, to unlicensed independents. The number of theaters exhibiting independent films grew by 33 percent within twelve months, to half of all houses.

Another reason was the MPPC's overestimation of the efficiency of controlling the motion picture industry through patent litigation and the exclusion of independents from licensing. The slow process of using detectives to investigate patent infringements, and of obtaining injunctions against the infringers, was outpaced by the dynamic rise of new companies in diverse locations.

Despite the rise in popularity of the feature-length film in 1912–1913 from independent producers and foreign imports, the MPPC was very reluctant to distribute such long productions. Edison, Biograph, Essanay, and Vitagraph did not release their first features until 1914, after dozens if not hundreds of features had been released by independents.[4]

Patent royalties to the MPPC ended in September 1913 with the expiration of the last of the patents filed in the mid-1890s at the dawn of commercial film production and exhibition. Thus the MPPC lost the ability to control the American film industry through patent licensing, and had to rely instead on its subsidiary, the General Film Company, formed in 1910, which monopolized film distribution in America.

The outbreak of World War I in 1914 cut off most of the European market, which played a much more significant part of the revenue and profit for MPPC members than for the independents, who concentrated on the American market.

The end came with a federal court decision in October 1915, which ruled that the MPPC's acts went "far beyond what was necessary to protect the use of patents or the monopoly which went with them" and was therefore an illegal restraint of trade under the Sherman Antitrust Act.[5] An appellate court dismissed the Patent Company's appeal, and officially terminated the MPPC in 1918.

[edit] See also

[edit] References

  1. ^ Edison v. American Mutoscope & Biograph Co., 151 F. 767, 81 C.C.A. 391 (March 5, 1907).
  2. ^ U.S. v. Motion Picture Patents Co., 225 F. 800 (D.C. Pa. 1915).
  3. ^ Peter Edidin, "La-La Land: The Origins", The New York Times, August 21, 2005, p. 4.2. "Los Angeles's distance from New York was also comforting to independent film producers, making it easier for them to avoid being harassed or sued by the Motion Picture Patents Company, a k a the Trust, which Thomas Edison helped create in 1909."
  4. ^ Per the American Film Institute Catalog of Motion Pictures, 8 American features were released in 1912, 61 in 1913, and 354 in 1914.
  5. ^ U.S. v. Motion Picture Patents Co., 225 F. 800 (D.C. Pa. 1915).

[edit] External links

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