Henry Ford and George Selden face off in heated court battle over patent & royalties. It was on this day in 1909 that a court battle between George Selden and Henry Ford that started on October 22, 1903 came to an end…almost. In brief, George Selden held an 1895 US patent for the gasoline powered automobile. This made him eligible to receive royalties from all automakers in the United States making this type of car, all without manufacturing any vehicles himself (though he would attempt to). With executives at Electric Vehicle Company (EVC), he founded the Association of Licensed Automobile Manufacturers (ALAM) in 1903 as an overlord of the American auto industry. This association set up a simple way for automakers to pay their royalties to Selden and the EVC. When Henry Ford set up Ford Motor Company in 1903 he tried to join ALAM, but was denied. It’s theorized this was because numerous former investors and other partners of Ford had already joined and were high in the ranks at ALAM. Undeterred, Ford began producing automobiles. He was quickly served with a lawsuit for breaching Selden’s patent. On this day in 1909 a court ruled in favor of ALAM, finding legitimacy in the Selden patent. But that wasn’t the end. Ford filed an appeal, knowing his newly-released Model T was at stake. The case rose to the US Circuit Court of Appeals. Ford fought one specific aspect of the patent, which was that the Selden patent referenced the use of a Brayton cycle engine. Ford stated his vehicles used an Otto cycle engine, which is still widely used in internal combustion engines today. With this argument Ford won his appeal on January 11, 1911, and broke down the monopoly held by Selden and ALAM. Automakers now had the freedom to build without having to pay royalties to anyone.
Selden was pretty clever - he discovered that no one had patented the complete automobile, so he did! Clever, not ethical.
The Jalopy Journal
