Thomas Edison, Intellectual Property and the Recording Industry

By George Ziemann 6/01/03

When people ask us from where we draw our opinions on everything from free music to fee music, we tell them look to the past to see what precedents were set by earlier media and its relationship with the consumer. We then compare the similarities and differences to the contemporary struggle digital media faces today. George Ziemann's latest articles looks back to the earliest days of the film and record industries and finds some amazing (though not surprising) parallels. -- editor.

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As we plan the future of the recording industry as it relates to the advancement of music and the recording arts, as well as the science which empowers it, we must look back at what has been done before. As we were told in school, "Those who do not know history are doomed to repeat it." They probably told me who wrote that, too, but for some reason it slips my mind.

So let's go back to the beginning and talk about that man that invented the recording industry's first tool -- Thomas Alva Edison.

Chapter 1-- The Dawn of Recorded Music and the First Pirates

Thomas Edison invented the first phonograph in December of 1877 at Menlo Park in New Jersey. To protect his design and start doing business, the Edison Speaking Phonograph Company was formed almost immediately. But three years later, it had ground to a virtual halt. Edison himself had moved on to a couple of other minor projects which he may have felt to be slightly more important at the time, like the light bulb and the question of how to get electricty into people's homes so they might be inclined to buy one.

Edison finally got a light bulb with a filament of carbonized thread to burn for 13 hours on Oct. 21-22, 1879. He gave the first public exhibition on Dec. 31 of the same year. Pretty quickly, he had one that would burn for 100 hours.

But his big project was still distribution of electricity, without which the light bulb was useless. So in 1878, even before he had a good prototype of the incandescent bulb, he had formed the Edison Electric Light Company, financed by J.P. Morgan and the Vanderbilts. They advanced him $30,000 for research and development.

By 1882, Edison had a dynamo that operated at 82 percent efficiency. In September, 1882, he had opened a central station on Pearl Street in Manhattan and was eventually supplying electricity to a one-mile square section of New York.

Enter Alexander Graham Bell and his cousin, Chichester Bell. The Bells got together with an instrument maker named Charles Sumner Tainter and they set out to make a better version of Edison's phonograph design. The new design was called the Graphophone and the main improvement was that their version, using recorded cylinders, gave a longer life to the recordings. They could simply be played more times than Edison's tinfoil phonograph design. The intent was to market it as an office aid, much the same as we view tape recorders today, as a dictation machine.

Of course, Edison was irate when he found out about this. He felt that Graphophone had basically stolen his idea. So much so that when Graphophone asked him to pool their patents, Edison said he wanted nothing to do with Bell and his "pirates". No one had even started selling recordings yet and the word "pirate" was already being used in relation to intellectual property. So don't think for a moment that Hilary Rosen thought that up by herself. Edison gets credit for that one, too.

Remember that Thomas Edison was not a solitary inventory. He had a large staff of men who consistently contributed their work and ideas for little or no credit, including Charles Batchelor, John Kruesi, Francis Jehl and Frances Upton, who had helped perfect the light bulb. And a year prior to Edison's work, Joseph Swan, a British scientist, had already invented the incandescent filament lamp, so the British were working at the same problem simultaneously. Swan and Edison came upon the same solution at approximately the same time, completely independent of each other.

Also on Edison's team was Ezra Gilliland, whom Edison assigned the task of improving the phonograph. By 1887, they had a workable prototype, based on a glass cylinder with a compound of steric acid, beeswax and ceresin as the recording medium. This attracted the interest of Jessie H. Lippencott, who was already in the glass business and saw an opportunity.

Lippencott pulled off what Alexander Bell could not. After reaching an agreement between Gilliland, Bell and Tainter, Lippencott formed the North American Phonograph Company on March 29, 1888. In the process, he put the rivalry between Edison and Bell on the back burner, along with any patent issues.

Note: The graphics on this page and throughout this story were provided by Shawn Borri of the North American Phonograph Company, (NAPC) which a) is the oldest name in commercial sound recording, b) still exists today; c) has a wealth of historical information as well as physical items of historic value; and d) was the primary source for the information contained in this article.

Okay, Dear Reader, this next part is going to seem tedious. However, the details herein are infinitely important to the story. Otherwise, I wouldn't have taken the time to transcribe them for easier reading. Free to skip ahead.

The North American Phonograph Company

CERTIFICATE OF THE ORGANIZATION OF THE NORTH AMERICAN PHONOGRAPH COMPANY. RECEIVED in the office of the Clerk of the County of Hudson on the 14th day of July, A.D. 1888 at 12 o'clock M., and recorded in Book 8 of Clerk's Records for said COunty, page 229, (Signed) Dennis McLaughlin, Clerk.
Filed July 16, 1888.
(Signed) Henry C. Kelsey, Sec'y of State.


THIS IS TO CERTIFY that we, Jesse H. Lippencott, Thomas R. Lombard, George S. Evans, George H. Fitzwilson and John Robinson do hereby associate ourselves into a company under and by virtue of the provisions of an Act of the Legislature of New Jersey, entitled "An Act concerning corporations" approved April 7, 1875, and the several supplements thereto, for the purposes hereinafter mentioned, and to that end we do by this, our certificate set forth:

FIRST -- That the name which we have assumed to designate such Company, and to be used in its business and dealings, is THE NORTH AMERICAN PHONOGRAPH COMPANY.

SECOND -- That the place in this State where the business of such Company is to be conducted is the City of Jersey City in the County of Hudson.
THE PRINCIPAL part of the business of said Company within this State is to be transacted in the said City of Jersey City in the County of Hudson, which is to be the principal place of business of said Company, and the place where its principal office is to be located. And the places out of this State where the same is to be conducted are the City of New York in the State of New York, and elsewhere throughout the United States and Canada.

AND THAT the objects for which the Company is formed are to manufacture, trade in, buy, sell, rent, lease and otherwise acquire, hold and dispose of Phonographs, Phonograph-Graphophones and Instruments of every other kind or description designed, made or used for, intended for the recording and reproducing of sounds and and any or either of them or any part thereof and any and all supplies, appliances, materials and articles now used or required and that may be hereafter used or required in the manufacture, use or operation of said Phonographs, Phonograph-Graphophones and instruments and any and either of them and also for the purpose of renting, leasing, selling or otherwise disposing of to other firms, persons or corporations, the right or rights to manufacture, trade in, buy, sell, rent, lease or otherwise dispose of said Phonographs, Phonograph-Graphophones or Instruments or either of them or any part thereof or of the right to use the same either generally or in any specified State, locality or territory or in any general or limited manner; and also for the purpose of acquiring, receiving, owning and controlling by lease, rental, purchase, invention or otherwise any patent, patents, applications for patents, contracts devices, designs, instruments and formulas or any or either of them, relating to the art or science of recording and reproducing sound and for the purpose of purchasing materials therefor and any other purposes incidental to the business, trading and manufacturing aforesaid.

THE PORTION of the business of said Company which is to be carried on out of this state is the manufacture, trading in, buying, selling, renting, leasing and otherwise acquiring and disposing of the Phonographs, Phonograph-Graphophones and Instruments above described, and the supplies, appliancesm articles and materials, as above specified so far as the business of said Company may require, and the renting, leasing, selling or otherwise disposing of rights as above specified and other business incidental to the business of the Company which must necessarily be transacted outside of this State.

THIRD -- That the total amount of the capital stock of said Company is SIX MILLION, SIX HUNDRED THOUSAND DOLLARS; the number of shares into which the same is divided is SIXTY SIX THOUSAND; and the par value of each share is ONE HUNDRED DOLLARS. The amount with which the said Company will commence business is FORTY THOUSAND DOLLARS, which is divided into FOUR HUNDRED SHARES of a par value of ONE HUNDRED DOLLARS each.

FOURTH -- The names and residences of the stockholders and the number of shares held by each are as follows, to wit:

Jesse H. Lippencott, New York City, Eighty (80) Shares.
Thomas R. Lombard, New York City, Eighty (80) Shares.
George S. Evans, New York City, Eighty (80) Shares.
George H. Fitzwilson, New York City, Eighty (80) Shares.
John Robinson, New York City, Eighty (80) Shares.

FIFTH -- The period at which said Company shall commence is the Fourteenth day of July, A.D. one thousand eight hundred and eighty-eight, and the period at which is shall terminate is the First day of May, A.D. one thousand nine hundred and thirty-eight.

What has happened, in effect, is that the NACP has laid claim to the entire art and science of recording and everything that came with it, at least from 1888 to 1938. They owned it completely. The NACP was the sole license holder for Edison Phonographs and Bell Tainter Graphophones. It was found by the early 1890s that the Edison Phonograph was taking the lead in quality and ease of operation, and the Edison 4" long by 2 1/4 " record format was the standard.

It's hard to determine what Edison himself thought of this. At the time, he was busy with the rest of the team inventing new things on an almost daily basis -- light sockets, meters, insulation, fuses, switches, junction boxes, indicator panels. To facilitate this process, Edison created a half-dozen other companies related to electricity and its distribution, which he merged together in 1889 to create the Edison General Electric Company. This, in turn, merged with Thomson-Houston in 1892 and became General Electric.

Edison's name had been left out of the company name because Edison himself had been left out of the new company. He sold his shares and standing to collect money and gain more time to pursue other projects. He was, however, still involved with the NACP.

By 1889, Edison and Columbia started to sell musical recordings, due to the invention of Lewis Glass of The Pacific Phonograph Company in San Fransisco. Glass found that if you fitted the phonograph with a coin slot mechanism, enclosed it in an upright case, with listening tubes, that it would be popular to make money with. The coin slot machine made the rent of the phonograph justifiable (phonographs and Graphophones were rented, and rarely if ever sold, for a fee of $20.00 a year)! By 1893, the coin slot phonograph had spread all over the country, and the NACP branches, such as the Kansas, New Jersey and North American Phonograph Company of Chicago, started producing musical compositions, and comedic sketches on the cylinder records to fill the growing demand at the phonograph parlors, hotel lobbies and train stations, where phonographs could be found.

This was the birth of the music recording industry.

Chapter 2 -- Music, Movies and Monopoly
Chapter 3 -- The Industry Evolves
Chapter 4 -- Copyright and the Grand Illusion
Chapter 5 -- Bringing the Past Into the Present


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Other MP3 stories:
Copy Protection and the Reasonable Man
Review: Neuros MP3 Digital Audio Computer

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