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  < Back to Table Of Contents  < Back to Topic: Automotive … Planes and Trains Too

article number 197
article date 01-03-2013
copyright 2013 by Author else SaltOfAmerica
Once Snubbed by the Automobile Association, Ford Destroys Their Patent, 1903
by M. M. Musselman
   

From the book, Get a Horse. Author’s book dedication: To my mother and father in memory of those days when a Marmon touring car was their pride and joy.

MR. HENRY FORD could be as soft as sponge rubber or as hard as chromium steel. And when he was hard he was the most hard-nosed, contrary, immovable character in all Christendom.

When a poor man is that way he is called a stubborn old galoot. When a rich man is a stubborn old galoot he is called a rugged individualist, a man of indomitable courage, a Rock of Gibraltar, a son-of-a-bitch. Most of his life, Henry Ford was called those things and a lot more by the rest of the automobile industry. And it all started in the summer of 1903 when Mr. Ford applied for a license to manufacture automobiles under the Selden patent.

At this point let us digress for a moment. By 1903, the Electric Vehicle Company’s Association of Licensed Automobile Manufacturers was running along very smoothly. No trouble at all. Just one big happy family. Sort of a gentlemen’s club with the Electric Vehicle Company making the rules.

There had been a few troublesome episodes but these were now in the past. Alexander Winton, for instance, had put up a short fight against paying royalties to Selden and his Wall Street friends. When he was sued, he hired important lawyers and gathered together considerable defense evidence. Then he went into court and filed a demurrer, contending that it required no exercise of the inventive faculty to substitute a gas engine for a steam engine in a self-propelling vehicle.

The court found, however, that Selden’s patent described an “ingenious and complicated machine” and that it could not be maintained that “the construction of such a machine required no inventive skill.” The demurrer was overruled, with costs, and Winton was told that he must defend the infringement suit.

Winton and his lawyers apparently grew worried. A couple of days before the trial was to start, the suit was settled out of court and Winton accepted a consent decree. But Winton’s lawyers made a pretty good deal for him. He got a credit of $50,000 against future royalties and, in turn, gave to the Electric Vehicle Company all the defense material his attorneys had gathered.

The next rift in the solid structure of Electric Vehicle Company’s auto trust was started a few years later by the manufacturers in Detroit. R. E. Olds, owing $130,000 in royalties, got together with Henry Joy of Packard and Henry Leland of Cadillac and formed a bloc to fight the size of the pay-off. As a result, the royalty, which had once been a straight five per cent, was reduced to 1.25 per cent, and eventually to .8 per cent.

But long before this, in March of 1903, the leaders of the automobile industry signed the agreement of the Association of Licensed Automobile Manufacturers and thereby banded together to maintain the Selden patent and to prosecute infringers. Thirty-two signed up before the end of the year and by 1910 there were eighty-six. The original signatories were:

Electric Vehicle Co., Columbia
Olds Motor Works, Oldsmobile
The Autocar Co., Autocar
The George N. Pierce Co., Pierce-Arrow
Packard Motor Car Co., Packard
Apperson Bros. Automobile Co., Apperson
Searchmont Automobile Co., Searchmont
Knox Automobile Co., Knox Waterless
Locomobile Company of America, Locomobile
The Haynes-Apperson Co., Haynes
The Peerless Motor Car Co., Peerless
The Winton Motor Carriage Co., Winton
U. S. Long Distance Automobile Co., Long Distance
Waltham Manufacturing Co., Orient
International Motor Car Co., International
The J. Stevens Arms and Tool Co., Stevens-Duryea
H. H. Franklin Mfg. Co., Franklin
The Commercial Motor Co., Plymouth
Berg Automobile Co., Berg
Cadillac Automobile Co., Cadillac
Northern Manufacturing Co., Northern
Pope-Robinson Co., Pope-Robinson
Elmore Mfg. Co., Elmore
E. R. Thomas Motor Co., Thomas Flyer
The Kirk Manufacturing Co., Kirk
Buffalo Gasoline Motor Co., Buffalo
Pope Motor Car Co., Pope-Toledo
Sandusky Automobile Co., Sandusky
Crest Manufacturing Co., Crestmobile
Studebaker Automobile Co., Studebaker
The Buick Motor Co., Buick
The F. B. Stearns Company, Stearns

   
1903 Cadillac.

These were the top makers of automobiles in America. The only important manufacturer who was not a member of the A.L.A.M. was Mr. Thomas Jeffery, who made the Rambler. The association expected to round him up eventually but he was hard to get at, located as he was, in a place called Kenosha. The officers of the Electric Vehicle Company weren’t very sure where Kenosha was. But they were biding their time and as soon as Mr. Jeffery came out of the woods they intended to slap a suit on him.

Meanwhile, according to the contract the members of the A.L.A.M. had signed, they were supposed to exchange ideas and patents, to prevent any outside manufacturer from infringing the Selden patent, and to keep fly-by-night stock promoters from giving the automobile industry a bad name.

A former official of one of the member companies of the A.LA.M. has stated that it was not the intention of the Electric Vehicle Company to create a closed trust; that any legitimate manufacturer was to be allowed to join the A.L.A.M.

However, the Scientific American, in 1909, pointed out that one of the most important clauses in the articles of agreement of the A.L.A.M. stated that only firms which were actually engaged in the manufacture of autos on or before the date of its organization were eligible to membership, and, as the industry was hardly in its first swaddling clothes in the early part of 1903, it was apparent that many important companies entering the field later were barred nillywilly.

A notable example of this was found in the organization of the Selden Motor Car Company in 1907, with George B. Selden as president. In order for the inventor himself to get into the A.L.A.M. the Electric Vehicle Company arranged for him to acquire the license of the Buffalo Gasoline Motor Company, which was about to go out of business. But this, apparently, was a very special kind of deal not available to any Tom, Dick or Harry.

It was shortly after March, 1903, that Henry Ford approached an officer of the A.L.A.M. and inquired about joining their exclusive club. Unfortunately Ford had already been connected with two unsuccessful companies. The big guns around Detroit and Cleveland, such as the Olds Motor Works, Packard, Cadillac, Peerless and Winton, considered Ford an unreliable and tricky operator. Before taking him into the fraternity they suggested that he had better demonstrate that he could build something more than an 8o-horsepower racing machine. They doubted whether the Ford Motor Company would ever amount to anything.

   
BarneyOldfield, race driver and Young Henry Ford in front of his racing machine.

Mr. Ford did a slow burn. The more he thought about it the madder he got. He got himself a ‘mad on’ that was to last for the rest of his life.

Just as the date of Henry’s first car has often been wrongly cited as 1893, many historians have mistakenly put the cart before the horse and claimed that the A.L.A.M. first came to Ford and asked him to join and that he and Couzens turned them down.

There is no doubt that late in the summer of 1903 the A.L.A.M. had changed its mind and was anxious to have Ford in their organization, for by that time he was selling cars faster than he could make them. So Ford was invited to become one of the brothers, but it was too late. He had been snubbed when he had come to them with his hat in hand. Now he was a man of indomitable courage, a rugged individualist, a success. He turned them down. They could take their license and go jump in the Detroit River. He’d fight them from hell to breakfast before he’d pay a penny of royalty!

Any doubt as to the fact that Ford was turned down by the A.L.A.M., before he turned them down, was dispelled by the testimony of Edsel Ford in 1938 before a Congressional Committee. Edsel said, under oath:

“My father inquired of one of the officers of the association if it were possible to join this association and become a member as the other motor car companies were. He was told, I understand, he had best go out and manufacture some motor cars and gain a reputation and prove that he wasn’t a fly-by-night producer, before he should ask for a membership in this association.”

Mr. Ford was a man who never forgave unless it was good business. Later in life he would forgive America for going to war and he would forgive the Jews for being Jewish, because it was good business. But in the fall of 1903 he elected not to forgive the A.L.A.M. nor any of its members because they had suggested a few months before that he was a flyby-night.

He may have thought that a fight with the A.L.A.M. would be good advertising and sell more Fords. Or it may just have been that he picked a fight simply because he was a hard-nosed, contrary, immovable character. In any case, there was nothing for the Electric Vehicle Company to do but bring him to heel. Late in 1903 they brought suit in the Federal Circuit Court of New York against C. A. Duerr and Company, Ford’s New York distributor.

The suit was also directed against the Ford Motor Company, Ford’s advertising agents, John Wanamaker, a Ford dealer, the manufacturers of the Mercedes and the Panhard automobiles and their New York dealers. But it was the Ford Motor Company that the Electric Vehicle Company was after. Once the big fish was caught the others would also be in the net.

It takes time to bring an important law suit to trial. The case of Electric Vehicle Company vs. C. A. Duerr and Company was continued and continued again. It dragged on for six years while both sides built up supplies of ammunition and deployed for battle.

Meanwhile, a sort of guerrilla warfare was carried on in the newspapers and trade journals. In a full-page advertisement in The Automobile, “manufacturers, dealers, importers, agents and users of gasoline automobiles” were warned that the members of the A.L.A.M. were the pioneers in the industry and that they had commercialized the gasoline vehicle by many years of development and at a great cost. “They are the owners of upwards of four hundred United States Patents,” stated the ad, “covering many of the most important improvements and details of manufacture. Both the basic Selden patent and all other patents owned as aforesaid will be enforced against all infringers . . . any person selling or using machines made or sold by any unlicensed manufacturers or importers will be liable to prosecution for infringement.”

   
ALAM ad labeled those who didn’t have proper patents license as “infringers”.

The Ford Motor Company replied in the same issue of the magazine:

“NOTICE to Dealers, Importers and Users of our gasoline automobiles. We will protect you against any prosecution for alleged infringements of patents. Regarding alleged infringement of the Selden patent we beg to quote the well-known Patent Attorneys, Messrs. Parker and Burton: ‘The Selden patent is not a broad one, and if it was it is anticipated. It does not cover a practicable machine, no practicable machine can be made from it and never was so far as we can ascertain. It relates to that form of carriage called a FORE CARRIAGE. None of that type has ever been in use, all have been failures. No court in the United States has ever decided in favor of the patent on the merits of the case, all it has ever done was to record a prior agreement between parties.’”

This sounds as though Mr. Couzens were speaking. The lower half of the advertisement was probably Mr. Ford speaking. It reads as follows:

“We are pioneers of the GASOLINE AUTOMOBILE. Our Mr. Ford made the first Gasoline Automobile in Detroit and the third in the United States. His machine made in 1893 (two years previous to the granting of the Selden patent, Nov. 5, 1895) is still in use. Our Mr. Ford also built the famous ‘999’ Gasoline Automobile, which was driven by Barney Oldfield in New York on July 25th, 1903, a mile in 55 4/5 seconds on a circular track, which is the world’s record.

“Mr. Ford, driving his own machine, beat Mr. Winton at Grosse Pointe track in 1901. We have always been winners. “Write for catalogue.”

Ford knew that the public wasn’t interested in what Messrs. Parker and Burton, the famous Patent Attorneys, had to say. So he added something a little more exciting: some fiction about his first automobile, the glamorous name of Barney Oldfield and his own race against Mr. Winton, who happened to be a member of the A.L.A.M.

This advertisement, in October, 1903, was probably the first time Ford fabricated the 1893 date in connection with his 1896 automobile. But anything was fair in this war. He meant to make it a fight to the finish and the stakes were too large to worry about a white lie or two. He intended to gain public sympathy by making the suit against him look like a rank injustice.

   
Henry Ford in his first car, the Quadricycle.

Ford was something of a genius when it came to garnering favorable publicity and in this fight with the A.L.A.M. he made his competitors suffer. In a short time the public thought of the A.L.A.M. as a gang of pirates who were trying to put honest Henry Ford out of business. There stood Henry, his back to the wall, fighting for his very life—but also for humanity, for all those people who wanted to buy Ford cars. Even though he was outnumbered 34 to 1 Henry would stand up and battle that wicked old giant, the automobile trust, to the bitter end. It was David Ford against A.L.A.M. Goliath.

At the same time, the Association displayed a remarkable lack of judgment in its public relations. It tried to bully people into not buying Ford cars. Its advertisements said, “DON’T BUY A LAW SUIT WITH YOUR AUTOMOBILE,” then went on to warn prospective purchasers that under the law, the buyer of an unlicensed automobile could be prosecuted.

Americans don’t like to be bullied. They scorned the A.L.A.M. warnings and went right on buying Fords. Possibly a few people bought Ford cars just to show the trust that nobody could dictate to them.

So the A.L.A.M. decided to make an example of somebody. Slap a suit on some private individual for driving an unlicensed car. But that was ticklish business; it might be hard to get a jury to bring in a verdict against an ordinary taxpayer. The problem was solved finally by bringing suit against a fellow named Charles T. Barney, who had paid $7,000 for an unlicensed Daimler Mercedes car.

They knew Ford wouldn’t care what happened to the buyer of a Mercedes, and surely the public wouldn’t feel sorry for a millionaire who had bought an expensive foreign car.

Barney’s lawyer asked for a stay to restrain prosecution of the suit until the Ford-Selden case was settled. But the judge denied the motion.

The way was then wide open for the A.L.A.M. to make an example of the buyer of this unlicensed automobile—to prosecute and collect damages from Mr. Barney. The newspapers carried the story and everybody agreed that it was an open-and-shut case.

What happened? Ford announced that henceforth he would issue a bond with every Ford car sold, if the buyer wished it, guaranteeing him against loss. The bonding company, worth six million dollars, and the Ford Motor Company, worth another six million dollars, stood behind every Ford and every honest American who bought one.

   
Ford ad not only tells the buyer that Ford will assume responsibility for ALAM trust actions but motivated people to buy his car.

Only fifty buyers of Ford cars ever asked for a bond. The public as much as announced that they were with Henry, win or lose. He didn’t have to supply any bonds. They liked Fords and they were going to buy Fords and to hell with the law!

So the A.L.A.M. allowed the case against Mr. Barney and his Mercedes to go unprosecuted in the federal courts.

Meanwhile, warned that Ford would try to prove in court that Selden’s “paper patent” could not be built into a workable automobile, the Association decided to build a Selden automobile. In all these years there had never been anything more concrete to Selden’s idea than some drawings in a patent application. But now, at last, Selden’s car was to come to life, some twenty-one years after being conceived.

   
Shelden Patent Side View.

Mr. Henry Cave, of the Electric Vehicle Company, was given the task of building a workable machine from George B. Selden’s patent drawings. His instructions were to follow the drawings as closely as possible but to produce something that would run.

A patent drawing is crude, at best, usually developed from an early model. But there had never been even a mock-up model for Selden’s drawings. Except for the early engine he had made, Selden’s drawings came entirely from his imagination. And they were so far behind the automotive art of 1903 as to seem ludicrous, especially the Brayton two-cycle engine.

But Mr. Cave was an able engineer and a man of inexhaustible patience and resourcefulness. After a good many months and the expenditure of thousands of dollars, he built a machine that not only ran but looked so much like Selden’s patent drawings that anyone who did not know might have thought Mr. Selden had been hiding this gas buggy all these years in his cellar. As the crowning touch, the Electric Vehicle Company’s paint shop inscribed the date “1877” on the side of the contraption.

It took considerable ingenuity to start the engine, and then the machine would move no faster than a man could walk, but it did move; it was an automobile and had been made from Selden’s drawings dated 1877.

Mr. Ford, meanwhile, produced any number of ancient vehicles that ran by steam and electricity, also stationary gas engines that had been operating for years, clutches, transmissions, differentials and experts. They had experts by the dozen who were ready to state that there was nothing new about Selden’s automobile.

Finally the battle of words began. The result was some thirty-six volumes of testimony and depositions. There were so many volumes of evidence that Federal Judge Charles M. Hough, in his final decision, entered a plaintive plea asking Congress or the Supreme Court or somebody to stop this nonsensical gathering of words by the millions, lest the country’s system of jurisprudence collapse from sheer verbosity.

   
George Seldon (right) takes a drive during the trial years.

Judge Hough then went on to say that Selden had contributed little to motor car advancement in the United States and nothing at all abroad. All American cars, in the judge’s opinion, had been modeled on French ideas, using engines descended from Otto through Daimler, and not from Brayton through Selden or any other American.

“In short,” said Judge Hough, “this American patent represents to me a great idea conceived in 1879, which lay absolutely fallow until 1895, was until then concealed in a [Patent Office] file wrapper and is now demanding tribute from later independent inventors who more promptly and far more successfully reduced their ideas to practice.”

There was, however, a “but” in the judge’s opinion, and it was a very large BUT. Regardless of all the things Selden had failed to do, and regardless of the blamelessness of other inventors in their infringements, the law was with Selden. The Patent Office had granted him a patent which was good for seventeen years, and in the judge’s eyes it was a valid patent.

For instance, in the third claim of his original application Selden had described his new device thus: “The combination in a road locomotive provided with suitable running gear and steering mechanism, of a gas engine, traction wheels, and an intermediate clutch or disengaging device . . .“

This was Mr. Selden’s claim in 1879. “And in that year,” inquired Judge Hough, “just how stood the art—what was known of the horseless carriage industry, either at home or abroad?”

The answer, His Honor pointed out, was that in 1879 there was no such industry, the art existed only in talk and hope; no vehicle even faintly fulfilling the requirements as described by Mr. Selden had ever been built and there was no competent and persuasive evidence that any gas engine experiment had ever moved one hundred feet, or revealed an organization of mechanical parts warranting the expectation that it would ever do so.

In other words, Mr. Selden had been first to conceive a practical gasoline automobile, regardless of the fact that he had only described it in a patent application and drawn pictures of it and had never built it. His patent was valid and Mr. Ford was infringing it!

The cries of joy in the A.L.A.M. camp were long and loud. But as far as Henry Ford was concerned the fight had just started. He had a ‘mad on’ that was good for another twenty or thirty years. He would carry the fight to the United States Supreme Court, if he had to. Besides it was good advertising. So the war continued in the newspapers and his lawyers prepared an appeal.

As for the public, were they frightened by Judge Hough’s decision? Not by a tonneau full. The demand for Model T’s doubled. In the year 1910 the Ford Motor Company grossed something like $20,000,000.

   
During all the commotion, Ford came out with the well accepted Model T, a true car for the masses.

By this time the Ford-Selden fight had become something of a cause célèbre. And ironically enough, Selden was thought of as a bloated millionaire milking the public, while Ford was the underdog suffering at the hands of big business. Actually Selden had received about a million and a half in royalties, while Ford was worth at least six million and the Ford Motor Company had become by far, the biggest big business in Detroit.

But no patent fight had ever been so completely aired in the newspapers and argued about by the man in the street. Few of them understood the legal battle, but every potential automobile buyer in the country was sure that he would save a lot of money if Ford won the case.

It is not difficult to believe that even the judges of the Appellate Court might have been unconsciously swayed by their desire to render a decision for the public and against the so-called “Automobile Trust.” For at that time, anything vaguely resembling a trust was in bad repute.

Was the Selden patent a detriment to the development of the automobile industry? Was the A.L.A.M. an octopus strangling the newcomer and oppressing the little man? Was it to the best interests of the public to render ineffective this “paper patent” held by a man who had never built an automobile and controlled by a group of Wall Street millionaires? Thoughts of this sort must have gone through the minds of the judges as they considered Ford’s appeal from the lower court’s decision. In any case, the final decision of the Appellate Court was a most interesting one.

In January, 1911, almost eight years after suit had first been filed, the court ruled that Selden’s patent was valid, but that his combination of engine, running gear, clutch, etc., contained the wrong type of engine and that it therefore did not cover the modern automobile. Consequently Henry Ford was not infringing the Selden patent and the lower court was reversed.

Public interest notwithstanding, it seems quite obvious today that the learned judges of the Appellate Court did some very involved reasoning to arrive at their decision. Either that or they were unfamiliar with things mechanical. What the court said, in effect, was that a mule pulling a wagon has no relation whatever to a horse pulling a wagon. For that is a parallel example of the difference between a vehicle propelled by a Brayton gas engine and a vehicle propelled by an Otto gas engine. If Selden had been the first, what did it matter what kind of a gas engine he used? The combination of gas engine, running gear, clutch, etc., was what Selden had been granted a patent on and there was no proof that anyone preceded him in his concept.

Besides that, even though Selden’s drawings indicated that he was concerned only with the Brayton type engine, his patent application stated: “Any form of liquid hydro-carbon engine of the compression type may be employed in my improved road locomotive.” This certainly covers the Otto engine as well as the Brayton.

However, the reversal of opinion finished the A.L.A.M. for it relieved all the members from paying any more royalties. The fight might have gone on, but the patent had less than two years to run and there was very little chance of getting the United States Supreme Court to review the case.

The much-abused Selden patent was actually a great boon to the automobile industry. It brought the manufacturers together for several years in a strong trade association. It also brought together the automotive engineers in what was called the Mechanical Branch of the A.L.A.M. They set up standards for parts, materials and manufacturing practice that were invaluable to the growth of the industry. This cooperation between executive forces as well as engineers proved so mutually satisfactory that after the A.L.A.M. was dissolved, the old members formed the National Automobile Chamber of Commerce—later to be called the Automobile Manufacturers Association—while the Mechanical Branch of the A.L.A.M. became the present Society of Automotive Engineers.

The cross-licensing agreement that had been set up by the A.L.A.M. was thus continued for a number of years and helped advance the industry during its formative period. Since the Selden decision, infringement suits within the industry are practically unheard of. But Henry Ford never joined the ranks of the old members of the A.L.A.M. When Mr. Ford got a ‘mad on’ it was a dandy.

It has often been stated that removal of royalty restrictions gave a terrific boost to the automobile business. This is complete nonsense. The royalty paid on the Selden patent in its later years was very moderate. If the Appellate Court had upheld the lower court, a Ford would have cost about $695 instead of $690.

Ford, the white knight, fighting the good fight for the man in the street, was the only one who gained much by beating the Selden patent. Mr. Ford became richer by two million dollars.

   
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