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."
The addition of Biograph
Biograph retaliated for being frozen out of the Trust agreement by purchasing the patent to the Latham film loop, a key feature of virtually all motion picture cameras then in use. Edison sued to gain control of the patent; however, after a federal court upheld the validity of the patent in 1907,, 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.
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