Victor and Edison Records were the giants of the industry for years. Edison had fewer patents, but it made vertical-cut records (needle moves up and down). They were not compatible with lateral players — which were less-expensive, more commonly owned. ▷Lateral vs. Vertical▹▷Format wars▹
Gennett’s battle was joined by other small labels like Okeh, Vocalian, and Canada’s Compo(*). Brunswick Records (founded in 1916) introduced a lateral-cut line in Jan. 1920 (as did many companies that year), and were sued by Victor on Nov. 1.
The judge’s decision opens the floodgates. On April 4, 1922, Johnson’s patent is ruled invalid on the basis of prior art (Jones, 1901). Lateral-cut records soon dominate the markets. So much so that in October, 1929 Edison throws in the towel. The stock market crashes the next day.