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IN 1879, GEORGE B. Selden patented the automobile. Selden wasn’t an engineer. He was a tinkerer, though, and more important, a patent attorney.
Selden recognized the value of delaying the document’s issuance until it had commercial value, and his all-inclusive patent for a hydrocarbon-fueled “road engine” was finally issued in 1895.
In 1899, Selden assigned exclusive license of his patent to the Electric Vehicle Co. in exchange for a royalty of $15/vehicle and a guaranteed annual minimum of $5000 (worth about $420/car and $140,000 in today’s dollars). EVC, in turn, brought suit against the Winton Motor Carriage Co., at the time one of the country’s largest automakers, and supplier Buffalo Gasolene Motor Co. (Note, in the early days, “gasoline” had no uniform spelling.)
Both companies tried to get the cases dismissed. However, Judge John R. Hazel took a broad view of the Selden patent and overruled Buffalo. (Remember his name; he’ll recur in our tale.) As a result, Winton and other automakers made a deal with EVC that created the Association of Licensed Automobile Manufacturers.
By 1904, 30 automakers were paying EVC royalties, 1.25 percent of price per vehicle sold, 1/5 of which went to Selden.
Henry Ford was not among them.
In October 1903, EVC and Selden sued Ford and his New York City agent. “Don’t buy a lawsuit with your car,” read an A.L.A.M. ad.
“Don’t Give $600 To the Bogey Man” retaliated a Ford ad. “When you buy a Ford Motor Car from John Wanamaker, you are guaranteed against any trouble with the Trust. That’s all the insurance any man will want.”
In all, the court actions dragged on from 1903 until 1911, the record containing more than 14,000 pages. As part of his case, Selden finally built two cars, one of them profiting from enhancements beyond the original patent. (Store this “product enhancement” nugget for later in this two-part tale.) Neither car ran very well.
As one of its priceless encounters, Judge C.M. Hough interrupted proceedings with a request: “Someone will have to explain to me what the liquid hydrocarbon gas engine is.”
At another, Dugald Clerk, an expert witness for Selden, declared “A non-compression Lenoir engine could not possibly propel a vehicle… If proved otherwise, it would be reason enough to reassess the broad interpretation of the Selden patent….”
Soon, Henry Ford drove up in one of his Model A Runabouts, this one converted to run on a non-compression Lenoir engine. It outdrove the Selden prototypes in a New York City competition.
Resolution arrived in the person of W. Benton Crisp, a talented attorney added to Ford’s legal staff (and yet another name to recur in our tale). On January 9, 1911, more than seven years after the original suit was filed, a U.S. Circuit Court of Appeals reversed an earlier verdict and ruled in favor of Ford.
The ruling upheld Selden’s patent—but only for vehicles powered by Brayton two-cycle engines, not the almost universally adopted Otto four-stroke variety. As Ford’s engines were all the latter, there was no infringement.
Selden’s patent expired in less than two years. It’s estimated his royalties amounted to several hundred thousand dollars, upwards of $8 million today. Selden returned to relative obscurity, dabbled with inventions and died in 1922 at the age of seventy-five.
Before long, the A.L.A.M. disappeared.
So, to summarize our tale thus far, we’ve had a messy patent fight, enhancements of the patent, ultimate resolution and several key players: Judge John R. Hazel, Henry Ford and W. Benton Crisp.
Meanwhile, up in the air, legalistically speaking…. ds
© Dennis Simanaitis, SimanaitisSays.com, 2012