Kodak appeals to court

The FTC was warning the companies that their statements that consumers must use specified parts or service providers to maintain their warranties are generally prohibited by the Magnuson-Moss Warranty Act. Pursuant to the act, warrantors can only make such statements if they provide the parts or services for free or receive a waiver from the FTC.

Kodak appeals to court

During the s, Thomas Edison owned most of the major USA patents relating to motion picture cameras. The Edison Manufacturing Company's patent lawsuits against each of its domestic competitors crippled the USA's film industry, reducing 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 French and British films. SinceEdison 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.

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.

Edison sued to gain control of the patent; however, after a federal court upheld the validity of the patent in[1] Edison began negotiation with Biograph in May to reorganize the Edison licensing system.

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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 loopand three to projectors.

The trust 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. However, the MPPC also established a monopoly on all aspects of filmmaking.

Eastman Kodak, which owned the patent on raw film stock, was a member of the trust and thus agreed to sell stock only to other members. Likewise, the trust's control of patents on motion picture cameras ensured that only MPPC studios were able to film, and the projector patents allowed the trust to make licensing agreements with distributors and theaters — and thus determine who screened their films and where.

Kodak appeals to court

The patents owned by the MPPC allowed them to use federal law enforcement officials to enforce their licensing agreements and to prevent unauthorized use of their cameras, films, projectors, and other equipment. In some cases, however, the MPPC made use of hired thugs and mob connections to violently disrupt productions that were not licensed by the trust.

Films were initially limited to one reel in length 13—17 minutes[4] although competition by independent and foreign producers by led to the introduction of two-reelers, and bythree- and four-reelers.

Hollywood had one additional advantage: The first blow came inwhen Eastman Kodak modified its exclusive contract with the MPPC to allow Kodak, which led the industry in quality and price, to sell its raw film stock to unlicensed independents. The number of theaters exhibiting independent films grew by 33 percent within twelve months, to half of all houses.

Chronology

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 feature films in — from independent producers and foreign imports, the MPPC was very reluctant to make the changes necessary to distribute such longer films.

Edison, Biograph, Essanay, and Vitagraph did not release their first features untilafter dozens, if not hundreds, of feature films had been released by independents.

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 Companyformed inwhich monopolized film distribution in USA.

The outbreak of World War I in 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, which concentrated on Westerns produced for a primarily USA market. The end came with a federal court decision in United States v.

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