The American Film Industry

5. The Motion Picture Patents Company: A Reevaluation

The First Monopoly 5ROBERT ANDERSON The Motion Picture Patents Company: A Reevaluation Film historians have portrayed the Motion Picture Patents Company as an avaricious monopoly. Terry Ramsaye's A Million and One Nights (1926), Benjamin Hampton's A History ofthe Movies (1931) and Lewis Jacobs' The Rise of the American Film (1939) have long been the standard reference sources for scholarship pertaining to the formation and business conduct ofthe Patents Company. These texts consistently present the MPPC as a thoroughgoing villian, designed both to collusively maximize profits and to eliminate competition by establishing prohibitive barriers to entry through patent pooling. The contributions of the MPPC to the development of the American film industry are discussed in negative terms: the failure ofa repressive and conservative oligopoly to stifle the dynamism ofthe "people's theater," the art form of the twentieth century, the American motion picture. Owing to the recent availability of material housed at the Thomas A. Edison National Archives in West Orange, N.J., the Federal Archives and Records Center in Philadelphia, Pa., and the Library ofCongress in Washington , D.C., the above one-sided interpretation ofthe Patents Company can be both challenged and repudiated. From 1909 until its court-ordered demise in 1915, the MPPC radically altered, upgraded, and codified American film production, disAdapted from "The Motion Picture Patents Company," Ph.D. dissertation, University of Wisconsin, 1983. 133 134 Part II / Struggles for Control, 1908-1930 tribution, and exhibition. The Patents Company was responsible for ending the foreign domination of American screens, increasing film quality through internal competition, and standardizing film distribution and exhibition practices. But, and perhaps most significant, by aligning the small disorganized film companies into a combination of licensed manufacturers, the MPPC succeeded in transforming the fledgling American motion picture business into an internationally competitive industry. From the Kinetoscope period to 1907, American film manufacturers were operating under the spectre ofpatents litigation. Thomas A. Edison , the renowned inventor and head of the Edison Manufacturing Company, set the tenor for the pre-MPPC era by instituting innumerable patent infringement lawsuits against each of his domestic rivals -the American Mutoscope and Biograph Company ofNew York, the Essanay Company ofChicago, the Lubin Company ofPhiladelphia, the Selig Polyscope Company of Chicago and the Vitagraph Company ofNew York. The expenses of these litigation suits crippled American film production. Unable to expand or reinvest in their studios, the various film-manufacturing firms remained small and disorganized. The Edison Company's distrust of an open marketplace for motion picture manufacture and sale increased after the public's interest in the novelty of the Kinetoscope abated. As early as 1902, distributors and exhibitors were notified by the Edison Manufacturing Company that unless they handled Edison projectors and film exclusively they would not be protected from litigation.l Throughout the period, the Edison Company's emphasis on exclusivity continued to intensify. Dealerships promoting films manufactured by firms other than Edison became ineligible for the discounts, benefits, incentives, and legal protection which the Edison affiliates received.2 Although contending that it was "not our intention to 'hog' the business in any way," the Edison Company demanded loyalty from its affiliates.3 As such, all independent American film manufacturers outside the control of the Edison Manufacturing Company were viewed as a threat to Edison's hegemony over the domestic market. Thomas A. Edison has been presented as the motivating force behind the establishment of the Motion Picture Patents Company. This is 1. William Gilmore, vice-president of Edison Manufacturing Company, to Edison Dealers and Exhibitors, November 17, 1902, George Kleine Collection, box 18, Library of Congress (hereafter cited as GKC). 2. Edison Manufacturing Company to George Kleine, August 15 and 24,1904, GKC, box 18. 3. Edison Manufacturing Company to George Kleine, March 25, 1907, GKC, box 18. 5. Anderson: The Motion Picture Patents Company 135 incorrect, as the actual impetus to form the Edison licensing system, the model for and short-lived predecessor of the MPPC, came from Edison's opponents. Tired and financially depleted by the interminable legal wrangling over patent rights, manufacturers began to propose a mutually beneficial cessation ofhostilities to the Edison Manufacturing Company. Realizing the virtual impossibility ofcircumventing Thomas Edison's crucial camera patents by means ofinvention (although both Vitagraph and Selig Polyscope pretended to have done just that),4 concerned manufacturers contacted the Edison Manufacturing Company in early 1907 regarding the feasibility of a licensing agreement. Thomas Armat, holder...