Move To Terminate Paramount Decrees May Effect IP In The Film Industry

The Hollywood filmmaking and distribution machine is powerful, although not as dominant as it was in the 1930s, during the golden age of the studio system. With the competition from streaming video services like Netflix, Hollywood has even more concerns about a power-shift in the industry, but executives are not panicking. At least not yet, and certainly not publicly.

Besides the threat to Hollywood from streaming services, those in the film industry may be more concerned with another big change on the horizon: the recently announced U.S. Department of Justice (DOJ) plans to undo the Paramount Consent Decrees. These court-mandated restrictions, enacted in 1948, forced the biggest businesses in film to sell off their theater chains and effectively ended the old-fashioned Hollywood studio system. While the DOJ's changes have yet to take effect fully, those with Intellectual Property rights over various elements of American movies (particularly directors, writers and producers) could be negatively impacted. In an era of copyrighted films and registered characters, we are bound to see conflict arise over these issues soon.

The origins of the Decrees

There were quite a few monopolies in the first half of the 20th century, and the film industry was one of them, despite seemingly being divided among several studios including Paramount, Fox, Warner Brothers, Columbia, Universal and others.

Before the Justice Department sued them in 1938 for antitrust violations, big Hollywood studios owned most movie theaters, thereby controlling not only production and distribution but also exhibition. Independent theaters existed yet were often forced into block booking and circuit dealing. The former strongarmed theater owners into showing multiple movies from a single studio to receive an exhibition license, while the latter allowed studios to demand that all theaters in one regional circuit show their movies.

After 10 years of prolonged court debate, the US Supreme Court decided their theater ownership was not legal and forced them to divest. With theater owners free to show whatever they wished, foreign, independent and experimental films were screened with relative frequency in the decades that followed, ultimately influencing generations of filmgoers and filmmakers alike.

Undoing 1948's decision in 2018-19

In the official DOJ statement regarding its review of the Paramount Decrees (which started in 2018 and concluded the following year), the agency said the...