Hinckley: The man who would be king

George Selden built an empire on hot air .

Inventor George Selden (left) demonstrates his Selden automobile in 1910.

 HENRY Ford was a narrow-minded man of vision. He was ignorant and brilliant. He was prejudiced but did not allow this to interfere with the making of profits. He was stubborn, rigid, and inflexible.

He didn’t invent the assembly line, but he perfected it. He didn’t invent the American middle class, but he laid the foundation. He didn’t invent the automobile, but he put the world behind the wheel. And he was the David that challenged Goliath and unleashed the full potential of the inventors, entrepreneurs, and investors that built the American auto industry.  

The Goliath in this story is a patent attorney named George Selden and a stable of attorneys. Selden was a veteran of the American Civil War. His engineering studies at Yale University were brought to an abrupt end with the death of his father. When he resumed his education, it was in pursuit of a law degree.

 In 1879 he began engineering a horseless carriage, on paper. Then he made a detailed drawing of the internal combustion engine envisioned and filed a patent application on May 8 of that year.

Selden was a shrewd man. His experiments had convinced him that a horseless carriage was not practical. But he also learned that in the future it very well could be a possibility. And so, to keep the patent application alive, he filed amendments.

By the early 1890s Ransom Olds was testing horseless carriages. Charles and Frank Duryea demonstrated a motorised road vehicle in September 1893, and in 1895 initiated manufacturing for sale to the public.

Sensing that the time was right Selden filed a patent for “the production of a safe, simple and cheap road locomotive light in weight, easy to control, and possessed of sufficient power to overcome any ordinary inclination.” The proposed vehicle would be powered by a single or multi cylinder internal combustion engine. It would have a steering mechanism, clutch, and brake system.

It was all rather vague as Selden had yet to build a single vehicle. And yet, incredibly, on November 5, 1895, Selden was issued U.S. patent No. 549,160 for the concept of an automobile.

Over the course of the next few years inventors, investors, and entrepreneurs were rapidly advancing the technologies behind the automobile. And several companies joined the Duryea brothers as manufacturers.

Selden felt that this was infringement on his patent, but he lacked the financial resources needed to challenge the usurpers. That changed in 1899.

William Whitney, a financier with a reputation for building a network of partnerships with investors and attorneys, and the building of corporations, had decided to enter the automobile manufacturing business. Always a careful investor, his legal team began with the investigating of patents - and discovered George Selden.

Before the dawn of the new century, a limited partnership had been established. Selden was to be given $US10,000 for his patent as well as five percent of any royalties that it might generate.

The ink had barely dried on the agreement with Selden when Whitney’s lawyers began notifying automobile manufacturers that, “Our clients inform us that you are manufacturing and advertising for sale vehicles which embody the invention of the Selden patent. . .. We notify you of this infringement, and request that you desist from the same and make suitable compensation to the owner thereof.”

Most of the early automotive pioneers were headstrong and determined. Their response was predictable. And then the lawsuits commenced.

After careful deliberation Whitney decided to set an example. The target was Alexander Winton, a Scotch immigrant and pioneer automobile manufacturer with a reputation for toughness and tenacity.  He was also the largest manufacturer at the time.

In the legal battle that followed Winton’s lawyers argued that the patent should be dismissed because the Selden car was not an invention, it was a concept.

Federal Appeals Court Judge Alfred C. Coxe disagreed. “The patentee’s contributions to the art should not be considered from a narrow point of view. His work should not be examined through an inverted telescope; the horizon of invention should not be contracted to the periphery of a sixpence.  Selden “must be regarded as the first to construct a road-locomotive provided with a liquid hydrocarbon gas-engine of the compression type.”

Undaunted Winton refused to concede. Over the course of the next two years, he organized a confederation of automaker and countersued in 1901. His defence team cited more than 120 patents, American, British, and French awarded since 1794.

The battle continued for months, and legal fees mounted. Soon Winton was almost alone in his fight. In 1903 he threw in the towel and conceded to Whitney.

Whitney was a gracious winner and negotiated generous terms of compensation with Winton. Then he established the Association of Licensed Automobile Makers.

Now every automobile manufactured in the United States Every had to display a three-inch-wide brass plaque noting compliance. And every manufacturer was required to pay a per vehicle charge to the association.

Manufacturers that failed to comply were sued. Even worse, the purchaser of an unlicensed vehicle was subject to penalties.

This was crippling to the fledgling industry. But this was only the first phase of the association’s stranglehold. A board was established to evaluate a company’s application submission. Many companies were declined, and as a result, were put out of business before manufacturing could begin.

Henry Ford was one of the manufacturers whose license application was declined. But rather than reorganize and reapply, Ford reportedly said, “Tell Selden to take his patent and go to Hell with it!"

As soon as he was notified of a pending lawsuit Ford authorised his business manager, Henry Couzens, to give a statement to an automotive trade journal: “So far as our plan of action is concerned for the future it is extremely simple. We intend to manufacture and sell all the gasoline automobiles of the type we are constructing that we can. We regard the claims made by the Selden patent as covering the monopoly of such machines as entirely unwarranted.”

The ALAM countered. Full page advertisements were placed throughout the country notifying potential buyers that if they bought a Ford there was a risk of legal action. Ford responded with advertisements notifying customers that his company would indemnify any buyer.

It was a true David and Goliath story. The ALAM was a $70 million consortium. Ford was a small but growing automobile manufacturer.

Ford persevered. By late 1909 he stood almost entirely alone. Even General Motors had joined the ALAM.

Each time a judge ruled against Ford he appealed. Finally on January 9, 1911, Judge Walter Chadwick Noyes read his decision. “Every element in the [Selden] claim was old and the combination itself was not new. That did for Selden’s insistence that he alone had invented the automobile, and the case came down to the engine he had stipulated. It was a two-stroke, rather than the four-stroke then—and now—used in virtually every automobile. The patent held only for cars using the already obsolete two-stroke, and Ford and every other carmaker ‘neither legally nor morally’ owed Selden anything.”

The tables had turned. The ALAM had expended vast sums in legal challenges. Ford was growing his company exponentially. And so rather than appeal to the Supreme Court, the ALAM conceded.

Within twenty-four hours Ford reportedly received more than 100,000 congratulatory telegrams. The ALAM dissolved within the week. United States patent laws were reformed.

But more importantly the automobile industry was freed from its shackles. Automobile manufacturers drafted a patent-sharing arrangement that prevented perpetual litigation.

Henry Ford is best remembered for the Model T Ford and how it transformed the world. But his greatest legacy was the triumph over George Selden.

Written by Jim Hinckley of jimhinckleysamerica.com