Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1915-10-02
NOTION PICTURE
COMBINE ILLEGAL
Holding Corporation Which Controls
Patents is Declared Conspiracy
in Restraint of Trade.
BIG VICTORY FOR GOVERNMENT

BIG VICTORY FOR GOVERNMENT
PHILADELPHIA Oct. 1.-The
United States government won a
sweeping victory in one Of its impor-
tant antitrust cases today, when
ndge Oliver B. Dickinson in the
United States district court here,
handed down an opinion dissolving
the alleged moving picture trust on
the ground that it was violating the
Sherman law regulating interstate
sNd foreign commerce.
decision was rendered against
the Motion Picture Patents company,
the General Film company and many
other concerns and individuals man
ufacturing motion picture films and
accessories. or controlling the rights
of their manufacture Many mil
lions of dollars are involved.
The court made no suggestions as to
how the alleged combination is TO be
dissolved, but requested that a decree
Be submitted for approval 1t is probable
hat the case win be taken to the SUI
preme court.
The defendants in their arguments laid
Stress upon the rights of those holding
patents to do with their property what
they thought best, but the court In its
opinion declared that the granting of a
patent does not confer a license to do
that which the law condemns. The court
found that the defendants went far be-
yond what was necessary to protect
patent rights and that their acts con-
stituted violation of the antitrust laws
Monopoly IL AirtiSht.
II was charged by the government that
the alleged monopoly was formed in 1905
by virtually all the manufacturers of
moving picture films in the country. Uns
der an agreement made by these con-
Germs. It was alleged the Motion Picture
.Bktents company was made the holding
rconcem of nearly all the patents that
have been issued. A list of theaters
and moving picture places was prepared
and no film exchange. it was alleged,
was allowed to distribute films to any
exhibitor except those named on the
list.
Uniform prices and rules were made. It
was further alleged, and II the film ex-
changes did not observe the orders of
the so-called trust. their supply was cut
off.
The suit was filed August 1e. 1912. and
final argument was heard in December,
1914. The suit was conducted for the
government by Edwin II. Grosvenor,
special assistant to the attorney general.
The defendants named in the original
petition of complaint besides the motion
ioft
company. Biograph company, Thomas A.
Edison unc.), Essanay Film Mahufactdr-
ing company, the Kalem company Qnc.),
George Kleine. Lubin Manufacturing
company, Melies Manufacturing com
pany. Pathes Freres, the Seug Polyscope
company. the Vitagraph company, Frank
l.. Dyer Henry N. Marvin, j. ]. Ken
nedy, William Heller. Samuel Tong, j.
A. Berst. Cation Melies, Albert f. Smith.
George X. Spoor and w. N Selig.
The court in it's decision states that
all contracts enumerated in the govern
ment's petition and the combination
therein described, were a conspiracy in
restraint of trade. and therefore Illegal
and that they constituted, with the ex-
ception of the operations of the Melies
! Manufacturing company, a monopoly I'm
Violation Of the antitrust laws
Exercises Despotic Power.
The court sketched the formation of
the alleged Illegal combination, showing
that it was created in 1908, and that the
total Investments amounted to millions
of dollars. The plan was, according TO
the court. to combine the manufacturers
end importers OF films into one interest.
Lists of exchanges and of theaters were
prepared, and no exchange was permitted
to have films and no theater allowed to
exhibit them without the consent of all
the defendants.
The names of none appeared upon these
lists except such as bought all supplies
from the defendants and any who dealt
otherwise were dropped. Every theater
was required to pay a royalty for the
use OF a projecting machine, even when
the machine had been owned by the ex-
hibitor before the combination was
formed.
The court showed how the alleged COM
bination exercised its power. and came
to the conclusion that the defendants
we're beyond the limits of the law.
The court in its decision failed 10 find
that the Edison patent on the picture
film was limited 70 Its negative and did
not cover the positive motion picture
films which were dealt in commercially -
This point had been raised by the gov
abnment,
reference to the bath tub case was
made In the finding. which said in part:
We would feel constrained on the au-
thority of this case alone to find that the
agreements and acts OF the defendants
in the present case went far beyond what
was necessary to protect the use Of pat