Although Hollingshead retained a 30% interest in Park-In Inc., after selling his theater, he was never again involved in operating a drive-in. While he felt that the licensing aspect of the business showed promise, a morass of legal issues would prove otherwise.
In 1936, several years after the Drive-In Theater was built in Camden, a second drive-in was built in Weymouth Massachusetts, and opened on May 6 of that year. After failing o obtain a license from Park-In, however, the owners of the Weymouth Drive-In, Thomas DiMaura and James Guarino faced legal action on the charge of patent infringement. The result of the suit enabled Park-In to obtain a writ which entitled them to place gate keepers at the Weymouth to collect the entire gate receipts for July 3, 4 and 5 of that summer for Park-In. There were subsequent monetary fees paid, and by the fall of 1936, the Weymouth partners, (also known as Drive-In Theaters Corp) entered into a licensing agreement with Park-In. With a one-time fee of $1000 and 5% of the gross box office receipts going to Park-In, Drive-In Theaters Corp received one of Park-In's "protected" territories.
Legal Battles
While the drive-in theater business had gotten off to a slow start, within in a year of this lawsuit, things really began to heat up. In July 1937, another entrepreneur, Elias M. Leow, opened a drive-in at Lynn Massachusetts, in apparent violation of the Weymouth license with Park-In. As a result, Drive-In Theaters Corp had to sue Park-In in order to get them to sue the Lynn operation. Meanwhile, Park-In counter-sued Weymouth over another un-authorized location that had been built in Shrewsbury Massachusetts. Then, on the other side of the country, two men from California, a Mr. M. A. Rogers and Thomas Burgess, also opened a drive-in without obtaining a license from Park-In.
These infringements marked the beginning of what became a morass of legal wrangling with numerous lawsuits and counter-suits all over the country. As drive-Ins continued to pop up, some were licensed and some were not, and other who were originally licensed began to stop paying their royalties to Park-In due to the un-authorized locations being built in their so-called "protected"; territories. This legal chaos continued for several years, with locations springing up faster than Park-In could sue them.
One these early drive-ins was the Sunrise Auto Theater in Valley Stream, Long Island New York. Owned by Michael Redstone, father of the mastermind and head of Viacom, Sumner Redstone. This theater was the first of what was to become Northeast Theaters, which eventually evolved into National Amusements, a corporation operating 60 drive-ins and dozens of indoor theaters.
Patent Invalidation
The legal case that had the most lasting impact on the drive-in business was with Leows, a suit which climbed all the way to the First Circuit Court of appeals. The court's decision dealt a stunning blow to Hollingshead's Park-In Company and relinquished its ability to collect royalties from any drive-in operator ever again. Finding the original concept for the drive-in theater lacking any inventiveness, in that is simply represented a facsimile of the layout of an indoor theater using cars in the place of seats, and that the terracing of vehicles was a mere adaptation of the sloped floor in a theater auditorium and was not novel in any way, the court ruled the original patent invalid and stated that it never should have been used in the first place.
