Motion Picture Patents Company

The MPPC was preceded by the Edison licensing system, in effect in 1907–1908, on which the MPPC was modeled. During the 1890s, Thomas Edison owned most of the major US patents relating to motion picture cameras. The Edison Manufacturing Company's patent lawsuits against each of its domestic competitors crippled the US film industry, reducing production mainly to two companies: Edison and Biograph, which used a different camera design. This left Edison's other rivals with little recourse but to import French and British films.

Since 1902, Edison had also been notifying distributors and exhibitors that if they did not use Edison machines and films exclusively, they would be subject to litigation for supporting filmmaking that infringed Edison's patents. Exhausted by the lawsuits, Edison's competitors — Essanay, Kalem, Pathé Frères, Selig, and Vitagraph — approached him in 1907 to negotiate a licensing agreement, which Lubin was also invited to join. The one notable filmmaker excluded from the licensing agreement was Biograph, which Edison hoped to squeeze out of the market. No further applicants could become licensees. The purpose of the licensing agreement, according to an Edison lawyer, was to "preserve the business of present manufacturers and not to throw the field open to all competitors."

In February 1909, major European producers held the Paris Film Congress in an attempt to create a similar European organisation. This group also included MPPC members Pathé and Vitagraph, which had extensive European production and distribution interests. This proposed European cartel ultimately failed when Pathé, then still the largest company in the world, withdrew in April.

The addition of Biograph

Biograph retaliated for being frozen out of the trust agreement by purchasing the patent to the Latham film loop, a key feature of virtually all motion picture cameras then in use. Edison sued to gain control of the patent. After a federal court upheld the validity of the patent in 1907, Edison began negotiation with Biograph in May 1908 to reorganize the Edison licensing system. The resulting trust pooled 16 motion picture patents. Ten were considered of minor importance. The remaining six pertained one each to films, cameras, and the Latham loop, and three to projectors.