Copyhype

Was Hollywood built on piracy? That’s what some seem to suggest. Lawrence Lessig’s version of this story from his 2004 book Free Culture is archetypical:

The Hollywood film industry was built by fleeing pirates. Creators and directors migrated from the East Coast to California in the early 20th century in part to escape controls that film patents granted the inventor Thomas Edison. These controls were exercised through the Motion Pictures Patents Company, a monopoly “trust” based on Edison’s creative property and formed to vigorously protect his patent rights.

California was remote enough from Edison’s reach that filmmakers like Fox and Paramount could move there and, without fear of the law, pirate his inventions. Hollywood grew quickly, and enforcement of federal law eventually spread west. But because patents granted their holders a truly “limited” monopoly of just 17 years (at that time), the patents had expired by the time enough federal marshals appeared. A new industry had been founded, in part from the piracy of Edison’s creative property.

This little bit of historical revisionism has popped up regularly since then. In January, The Pirate Bay issued a press release repeating the story and claiming they are the modern day equivalent of Hollywood. And most recently, Torrentfreak reminded its readers of the story — picked up by Techdirt, whose story was in turn picked up by Cory Doctorow — in response to MPAA Chairman Chris Dodd’s spoken remarks at last month’s CinemaCon.

The purpose of this spin on the facts seems to be to show some kind of hypocrisy on the part of movie studios. The evidence, though, doesn’t support the claims. ¹This seems a common theme when looking at copyright criticims. See Remix Without Romance: What Free Culture Gets Wrong for another recent example.

The Dawn of the Motion Picture Industry

The end of the 19th century found inventors racing to develop technology that could record and display moving pictures, and Thomas Edison was the first to bring a commercial motion-picture machine to market. ²Robert Sklar, Movie-Made America: A Cultural History of American Movies, pg 13 (1994). The early years saw some patent skirmishes between rival companies as film began to grow in popularity. In 1908, Edison helped form the Motion Picture Patents Company (MPPC) with other patent holders. Together, they held a virtual monopoly on the movie industry; their patents covered projectors, cameras, and film stock. Their control went beyond patents, however. Using tie-in agreements and licensing, and forming the General Film Corporation to monopolize film distribution, they locked out competition at every step, from making movies to exhibiting them. ³Robert Sklar has said, “The roots of the motion-picture monopoly lay in Thomas A. Edison’s greed and dissimulation; and the results of it were a complete debacle for the Wizard, his leadership and social class.”

Around this time, a group of independent filmmakers entered the market. These independents included many of the founders of the major studios that still exist today, including Carl Laemmle of Universal Pictures and Adolph Zukor of Paramount Pictures. The independents challenged the MPPC, creating and exhibiting films with unlicensed equipment and buying supplies from outside the US. Edison responded forcefully to the challenges — he took Laemmle’s operation especially personal, suing the independent filmmaker 289 times.

Who Were the Real Pirates?

According to this headline from a San Francisco newspaper in 1913, it wasn’t the independents who were the pirates:

The independents weren’t infringing on any patents themselves, they were violating the license and tie-in agreements that came with the MPPC’s equipment. The MPPC did enjoy some early success with its litigation efforts,  convincing several courts that illegal restraint of trade was not a defense to patent infringement. ⁴Michael Conant, Antitrust in the Motion Picture Industry, pg. 20 (1960).

But the MPPC didn’t rely solely on the law — Edison enforced the Trust’s domination with violence. Hired thugs would smash cameras and raid the independents’ places of business. ⁵Jane Chapman, Comparative Media History: An Introduction: 1789 to the Present, pg. 132 (2005). Historian Thaddeus Rockwell notes the extent of the violence perpetuated by the Trust: “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.”

The organization’s anti-competitive tactics caught the attention of the US government, which took action against them. In 1916, the Eastern District Court of Pennsylvania entered a decree against the Motion Picture Patents Co. The judge found that the MPPC, the General Film Company, and the individual companies involved had “attempted to monopolize and have monopolized and have combined and conspired … to monopolize a part of the trade or commerce … consisting of the trade in films, cameras, and projecting machines” in violation of the Sherman Antitrust Act. It declared all the contracts, patent licenses, and patent assignments used by the MPPC illegal.

The trust also began suffering setbacks in the courts, and in 1917, the US Supreme Court unequiovically struck down one of the license agreements that the MPPC had used to extend its monopoly. ⁶Motion Picture Patents Co. v. Universal Film Manufacturing Co., 243 US 502. In that case, the MPPC had sued Universal Film Manufacturing Company for patent infringement pursuant to its license agreement which restricted use of the MPPC’s film projectors to only exhibiting or projecting films licensed by the MPPC. (Imagine if a company like Apple claimed that it was patent infringement to play digital music legally acquired somewhere other than iTunes on an iPod.)

The Court recognized that a patent grant is limited “to the mechanism described in the patent as necessary to produce the described results. It is not concerned with and has nothing to do with the materials with which or on which the machine operates. The grant is of the exclusive right to use the mechanism to produce the result with any appropriate material, and the materials with which the machine is operated are no part of the patented machine or of the combination which produces the patented result. The difference is clear and vital between the exclusive right to use the machine, which the law gives to the inventor, and the right to use it exclusively with prescribed materials to which such a license notice as we have here seeks to restrict it.”

The Supreme Court concluded:

A restriction which would give to the plaintiff such a potential power for evil over an industry which must be recognized as an important element in the amusement life of the nation, under the conclusions we have stated in this opinion, is plainly void, because wholly without the scope and purpose of our patent laws, and because, if sustained, it would be gravely injurious to that public interest, which we have seen is more a favorite of the law than is the promotion of private fortunes. [Emphasis added.]

Why Did the Studios Move to Hollywood

Not only is the story that Hollywood was built on “piracy”, the claim that the independent studios ran to Hollywood to get away from Edison and his legal threats is greatly overstated. Southern California offered many advantages over the established filmmaking centers of New York and Chicago that provide stronger reasons for the migration.

Geography, for one. California offered a wide variety of scenery that was useful as substitutes for all sorts of locations, as this 1927 Paramount Studios map illustrates perfectly.

The landscape of Southern California:

was not only spectacular but extraordinarily varied. Summer greenery and winter snow, sunny beaches, barren deserts and rocky mountains were all with a short distance of each other. Florida and Texas could supply the climate for year-round outdoor filming, but they did not have quite the range of scenic choices within a day’s trip from the studios. Even the light of California was different, gently diffused by morning mists rolling in from the Pacific or by dust clouds blowing off the sandy hills. The rugged western landscape and the wide-open spaces were felt as enormous attractions in the rest of the world. ⁷Eileen Bowser, The Transformation of Cinema, 1907-1915 (History of the American Cinema), pg 151 (1994).

Weather played a huge role too — LA offers 70 degree year-round weather as opposed to winters in New York or, worse, Chicago. ⁸“Bad weather in Chicago was the primary reason the movies first turned toward the West, and eventually migrated to Hollywood.” Paul Zollo, Hollywood Remembered: An Oral History of Its Golden Age, pg. 12 (2002). Peter Ediden of the New York Times notes, “This wasn’t merely a matter of comfort; even the brightest electric lights of the time were too dim to  expose film properly, so a run of cloudy days could halt production at, say, the Edison studios in East Orange, N.J.”

In fact, nearly everything about the area was an improvement. Land was cheaper and more available and the costs of labor were lower.

Former Curator of Film at the Museum of Modern Art in New York Eileen Bowser points out that the hiding from Edison factor makes little sense:

[T]he New York Motion Picture Company had already managed to escape the Patents Company’s pursuit just by going to Neversink in the Catskills that summer. Furthermore, by Balshofer’s own account, they were easily found by Patents Company spies in California a short time after they got there. At the same time, the Trust companies, which had nothing to hide, were also discovering the great California winter sunshine. ⁹Transformation of Cinema, pg. 150.

What it means

The proponents of this myth seem to want to suggest an analogy: Hollywood was built by “outlaws”; now Hollywood has become the incumbent, seeking to stop the next generation of “outlaws”. But this is a false equivalence. The Pirate Bay (or Megaupload, etc.) isn’t producing its own movies. Recognizing exclusive rights to a creative work doesn’t prohibit anyone from creating their own works. Stopping someone from offering copies, especially complete, verbatim copies, of a work is not anti-competitive.

The Trust’s actions against the independents were found illegal; the agreements were declared “plainly void” by the Supreme Court. Contrast that to the Court’s more recent decision in MGM v. Grokster, where even the dissent said, in reference to the P2P service Grokster, “deliberate unlawful copying is no less an unlawful taking of property than garden-variety theft.”