his sons, has had satisfactory business relations with the defendant distributors for many years and a consistently good record for performing the obligations of its contracts with them.
31. Each of the motion pictures distributed by each of the defendants R.K.O., Loew's Twentieth Century-Fox, and Paramount Film is copyrighted under the laws of the United States, and each of the said defendants licenses theatre operators to exhibit the motion pictures distributed by it. The production of a feature motion pictures costs from several hundred thousand dollars to three million dollars per picture. From the original negative of a picture, positive prints are made and these are used for distribution to exhibitors. The cost of making a positive print ranges from $ 150 up to $ 700 a picture, depending upon length and color. In most cases, the license fee paid to a distributor by an exhibitor for exhibition of a picture in a theatre does not equal even the cost of making one positive print. The number of prints is necessarily limited in view of their high cost, and consequently each print must be used for exhibition in a large number of theatres. On the average the distributors have made about 300 to 350 prints of a picture for exhibition in 12,000 to 15,000 theatres. In the Pittsburgh area, which includes Ambridge, the distributors have made available 8 to 15 prints for exhibition in 450 to 500 theatres. This condition makes it necessary to arrange a sequence for the use of the limited number of prints by exhibitors in the large number of theatres in an orderly manner in order to secure the return of the large costs of production and distribution.
32. In licensing Pennware for first run exhibition of motion pictures in the State Theatre, each distributor acted independently without consulting any other distributor and without concert of action. No representative of Paramount had any active part in obtaining such licenses.
33. In obtaining licenses for first run exhibition of motion pictures in the State Theatre, neither Pennware nor Notopoulos combined or conspired with any of the defendants in restraint of trade or commerce.
34. Loew's R.K.O., and Twentieth Century-Fox each had knowledge that Paramount Pictures, Inc., had an interest in the Pennware Theatre, but had dealt only with Notopoulos, or his sons in licensing pictures to that theatre. When each of them decided to license the State Theatre, as opposed to the application of plaintiff for the Penn Theatre, it did not know of the intention of the others to license the State Theater. In concluding to license the Pennware Theatre each considered the fact that that theatre was managed by an experienced exhibitor of moving pictures, whose credit had been good over a number of years, and who had a theatre equally located and considerably larger than the Penn Theatre, and which promised greater revenue, while the Penn Theatre was to be operated by a stranger in Ambridge whose ability and credit was unknown. Neither Loew's R.K.O., nor Twentieth Century-Fox, in their respective decisions to license the State Theatre were influenced by Paramount Pictures, Inc., or its power in the moving picture industry.
35. Paramount Film, Loew's R.K.O., and Twentieth Century-Fox each offered the plaintiff runs subsequent to the first runs upon terms to be subsequently agreed upon, but plaintiff refused all except first runs.
36. Plaintiff requested Paramount Film to license the Penn Theatre for exhibition of first runs for the first time on May 4, 1944. It first requested Loew's to license it for first runs on January 5, 1944, R.K.O., on March 30, 1944, and Twentieth Century Fox on March 30, 1944. Prior to each of said dates Pennware had requested said first runs for its theatre.
37. While Paramount Pictures owns an interest in various theatres and theatre corporations, it does not operate the theatres in which it has an interest. Each local theatre corporation in which Paramount Pictures has an interest, employs an experienced theatre operator under a management contract. Such local manager has full charge and responsibility of the operation of the theatre. He determines the policies and admission prices, negotiates with various distributors for the licensing to him of motion pictures, while Paramount reserves the right to pass upon unusual capital expenditures and the leasing and purchasing of theatre properties. This is also true in the case of Pennware, and Notopoulos and his sons alone negotiated the licensing to it of motion pictures for both the Penn and the State Theatres. Paramount played no part in such negotiations and never communicated with any representative of any distributor regarding the motion pictures that were to be exhibited in either the Penn or the State Theatres.
Conclusions of Law.
I. Each of the defendants R.K.O., Loew's, Twentieth Century-Fox and Paramount Film lawfully contracted and may contract with the defendant Pennware for the exhibition of its pictures first run at the State Theatre in Ambridge.
II. No one of the defendants R.K.O., Loew's, Twentieth Century-Fox and Paramount Film has been or is under any duty to license the plaintiff for the exhibition of its pictures first run in Ambridge.
III. When a long-time exhibitor-customer of a distributor acquires a new and larger theatre, with at least as good a location as his former and smaller theatre, no distributor is under any obligation to abandon such a customer in favor of a stranger who takes over the operation of the smaller theatre.
IV. Each of the defendants R.K.O., Loew's, Twentieth Century-Fox and Paramount Film acting independently of the others had and has the right to choose its own customer and the theatre in which its pictures are to be exhibited first run.
V. There was no contract, combination, or conspiracy in restraint of trade or commerce between or among the defendants or any two or more of them.
VI. None of the defendants monopolized, or attempted to monopolize, or combined or conspired with any other defendant or defendants to monopolize any part of trade or commerce.
VII. There is no evidence that any of the defendants Paramount, R.K.O., Loew's or Twenty Century-Fox, acquired, directly or indirectly, any of the stock of Pennware in violation of the Act of October 15, 1914, c. 323 Sec. 7, 15 U.S.C.A. § 18.
VIII. The complaint should be dismissed and plaintiff should pay the defendants their costs.
© 1992-2004 VersusLaw Inc.