What if the Selden Patent crashed your automobile?
George Selden vs. Henry Ford … your dream come true.
Imagine growing up in New-York, USA, in 1850. Kids at the time were probably fond of two things: the State of Maine Pure Spruce Gum – the first chewing gum – and racing one of those odd looking yet futuristic 4-wheeled vehicles later known as automobiles. That is probably what inspired George B. Selden.
Selden’s old man was a judge who “encouraged” his son to follow the same path and become a lawyer. Selden’s interest in science and innovation brought him to become a patent lawyer – meanwhile, he carried on crafting inventions in his basement.
The Selden Patent is one of the famous patent throughout American History and almost changed the fate of the automotive industry as we know it today. In the late 1800′s, Henry Ford was working hard on his dream: to commercialize a mass-produced US$ 500 car. The only obstacle standing on his way was the Selden Patent.
Inspired by Brayton’s two-stroke engine, George Selden came up with an improved version in 1878 – eight years before the public introduction of the Benz Patent Motorwagen in Europe. He made drawings of what he called the “road-locomotive” which included the engine and its use in a 4 wheeled car, and filed it for patent in 1879. Interestingly, at the time, cars were for racing and no-one had the idea that it could be used for more functional purposes. Because Selden understood that mass-market potential and because patents were issued for only 17 years, he started to file a series of minor amendments to his application to stretch out the legal process resulting in a delay of 16 years before the US patent 549160 (see below) was granted in November 1895. A few months later, the production of commercial motor vehicle started in the US. Clever him, lucky him – best of all, he actually never produced a working model of an automobile. Nonetheless, his horseless carriage anticipated the essential elements of an automobile from the liquid hydrocarbon compressed in cylinders to the steering wheel, the clutch and the comfy body suitable for conveying people or goods.
Selden then started to collect his royalties. In 1899, he assigned it to a group of Wall Street investors – for US$ 10,000 and a share of royalties – that ended up controlling a taxicab firm named Electric Vehicle Company and Columbia Automobile Company. The latter was owned by Col. Albert Pope who owned 40% of the country’s car sales in 1899, but who was also known as the King of Bicycles since he owned patents for the bicycle and was trying to control 45 other bicycle manufacturers via his own trust. Whether it was about bicycles or cars, the idea was to limit production, keep prices high and therefore generate more money from royalties. Too bad for Henry Ford’s dream.
In 1903, car manufacturers set up a trade organization called the Association of Licensed Automobile Manufacturers (ALAM) to regroup only those that were paying the Selden Patent royalties and differentiate from the many small car manufacturers that were producing poor quality. But by Henry Ford never got a license from ALAM because they considered him like one of those small and irrelevant manufacturers. So by Ford went to war against ALAM to reclaim his pride but also because his dream and ambition was to lower prices and to mass-produce.
The same year, even though by Ford got good publicity from this fight as the small entrepreneur campaigning against American corporations, the Court ordered him to pay million of dollars for unpaid royalties for every single of the 50,000 cars his company sold in 1903. That could have been the end of by Henry Ford as he was obviously facing bankruptcy. In a desperate move, he appealed the court ruling.
In 1911, the Court upheld the Selden Patent for all vehicles built with by Brayton’s two-stroke engine, but ruled that the Otto-type four stroke engine – the one used by by Ford and all other manufacturers – was not covered by the Selden Patent. That was the end of the Selden Patent, the end of ALAM and the proper trigger for cars mass-production. Had the wind blown otherwise, you would properly have never heard of by Henry Ford and would probably still be visiting your mother-in-law in a horse carriage.
There are very few stories like the Selden Patent with such important legacy that ended up shaping modern society and things that we take for granted every day. So, do we currently have a Selden Patent-alike in action somewhere, preventing another industry’s rapid change?