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The Circle Bastiat

How the patent office almost shut down Hollywood

New book 'The Master Switch' examines the role of the patent office and the history of film – including how Thomas Edison tried to have a movie monopoly.

(Page 3 of 4)

Moral condemnations and court injunctions didn’t stop the proliferation of nickelodeons that showed unseemly fare and violated Edison’s patent, so the inventor and his colleagues hired squads of thugs to shut them down. They seized film, beat up directors and actors, forced audiences out of theaters, smashed the nickelodeon arcades and set fire to entire city blocks where they were concentrated. But fortunately for the Jewish renegades, they lived and operated in neighborhoods where hundreds of soldiers stood ready and able to protect them – men like “Big” Jack Zelig, “Lefty Louie” Rosenberg, “Gyp the Blood” Horowitz, Joe “The Greaser” Rosenzweig, and the leaders of the notorious Yiddish Black Hand, Jacob “Johnny” Levinsky and “Charley the Cripple” Vitoffsky. There were even women ready for the fight – fierce, well-armed “gun-mols” like Bessie London, Tillie Finkelstein, Birdie Pomerantz, and Jennie “The Factory” Morris.

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Cameras, projectors, film, and sound equipment disappeared from the storerooms of Edison companies and showed up on makeshift movie lots on the Lower East Side. Bullets rained down on the Trust’s enforcers from the rooftops of nickelodeons. And massive fires destroyed the Edison distributors’ warehouses in the Bronx, Philadelphia, and Chicago. By 1915 the Trust had disbanded and the outlaw filmmakers moved west, where they could make bigger and better movies. Who were the men who, with the help of their nicknamed friends, fought Thomas Edison and the law and won? They were Marcus Loew of Loews Theatres and Metro-Goldwyn-Mayer, Carl Laemmle of Universal Pictures, Adolph Zukor of Paramount Pictures, William Fox of Twentieth-Century Fox, and the brothers Harry, Albert, Sam, and Jack Warner.

Thus we have the studio system itself and the origins of Hollywood as responses to state-granted patent monopoly. (I observed in Leveraging IP how IP law distorts the market in other ways–leading to Omega to incorporate a copyright-protected design on its watches simply so it can use the state’s arcane copyright rules to prevent price arbitrage and free trade; how printer companies put needless patented circuits in printer cartridges and printers to prevent competition by the use of state patent law; how fashion designers bizarrely incorporate their trademarked logos into the very design of clothing and accessories so that they can use state trademark law to stop competition.)