Fox After Hounds

Last week the whole cinema industry seethed with the kind of undercover excitement that theatregoers never see on the screen. Producers and exhibitors called in their lawyers, talked of stopping license fees to sound-recording equipment makers until the situation was clarified. Sound technicians wondered if they would have to dust off obsolete recording methods for emergency service. Reason was that bald, long-nosed William Fox, armed with a U. S. Supreme Court patent decision, was out of the well-lined hole into which he was cudgeled four years ago. This half-forgotten ex-newsboy and shoe-polish hawker was bent on raising as much hell as possible in the industry from which he had been exiled. In October 1929, William Fox celebrated the Silver Jubilee of his film enterprises. Frenzied buying and frenzied borrowing had made him the undisputed grand panjandrum of cinema, ruling a $200,000,000 empire. He had just got control of Loew's, Inc. for some $75,000,000. He paid another $19,000,000 for a string of Gaumont theatres in Britain without ever looking at them. But he owed all this money in short-term notes. When the market crash caught him amidships, his creditors hemmed him in, charged him with mismanagement. Even his able right-hand man, Winfield ("Winnie") Sheehan, turned against him. When the smoke of battle cleared, William Fox had been beaten and ousted by a group headed by Utilitarian Harley Lyman Clarke of General Theatres Equipment Corp., Harold Leonard Halsey of Halsey, Stuart & Co., and John Edward Otterson of Electrical Research Products, Inc., subsidiary of A. T. & T. William Fox got $21,000,000 for his stock and a salary of $500,000 a year for five years. These tidy sums he called meagre consolation. He had always, he said, preferred action and achievement to money. Mr. Fox retired to his lairs--the apartment on Manhattan's Park Avenue where he collects antique musical instruments, his Long Island Estate adjoining a golf course where he plays in the low 80's. There he turned his keen mind to the matter of patents. R. C. A. Photophone and A. T. & T.'s Electrical Research Products were making and leasing sound apparatus which involved the "double print" method of recording, the "sprocket" method of reproduction. Other systems were obsolete. But William Fox was sure those processes infringed on patents which he had acquired from three Germans and transferred to American Tri-Ergon Corp., his personal holding company formed in 1928. He sued Paramount Publix, the Wilmer & Vincent circuit and a Paramount Publix subsidiary. In effect he was suing R. C. A. Photophone and Electrical Research Products, both of which leaped to defend the defendants.

Fox contended that his patents were so broad he could rightfully claim tribute from virtually everyone who made sound equipment or produced or exhibited talking pictures. A Circuit Court of Appeals upheld his claim. The defendants scoffed. claimed the court's opinion was muddled and divided, appealed to the Supreme Court. Last fortnight the Supreme Court refused to hear the appeals. That meant that, on the strength of the lower court's decision, William Fox was a potential dictator of sound-recording.

R. C. A. Photophone and Electrical Research Products kept grimly silent last week, but rumors flew that they had sensed trouble even before the Supreme Court ruling, had offered Fox $8,000,000 for the Tri-Ergon patents, that optimistic Mr. Fox had held out in the hope that past infringements against him would net him ten times that amount. Last week William Fox was reputedly dreaming of taking the cinema away from banks and utilities and giving it back to "theatre men." His friends said a triumphant entry into Hollywood was imminent. His lawyers said they were preparing further infringement suits. Harry M. Warner of cinema's four Warner Bros, was so alarmed that he stopped in the midst of a Philadelphia golf tournament to call the situation one of the most serious that exhibitors have ever faced, to predict vital changes in the sound picture.

This file is automatically generated by a robot program, so reader's discretion is required.