Monday, November 5, 2007

George Selden and the Automobile

Yesterday, I wrote about the invention of the cash register. Today marks another important patent anniversary. On this date in 1895, George Selden was granted his patent on the automobile. This was to prove to be both highly lucrative and highly contested in the seminal automobile industry.

As a young man, Selden was more or less pushed into Yale Law School by his father, Judge Henry R. Selden. Young George did not do too well at the law, he was more interested in tinkering in his shop. But he did finish law school and actually practiced for awhile, even representing George Eastman's photography interests.

Selden was interested in the idea of an automobile, long before such a machine was practical. Many people were interested in this same concept. Working with some skilled mechanics, he developed a prototype and filed for a patent in May, 1879. He did not commercialize his automobile though. At that point in time, no one could build a practical automobile because there wasn't a light enough gasoline engine to power such a vehicle. Selden must not have been asleep during all of his law classes because he recognized that for the patent to have commercial value, it must issue just before automobiles started to be manufactured in quantity for commercial sale. Selden amended his patent claims four times, delaying its issuance for 16 years! When it finally did issue in 1895, the automobile industry was about to be born.

Selden licensed his patent rights to William C. Whitney who was proposing to build electric taxi cabs for the New York market. Whitney and Selden together formed the Association of Licensed Automobile Manufacturers (ALAM). They intended to extract an upfront payment and a 0.75% royalty on every automobile built in America. Most car manufacturers agreed to the terms rather than fight it in court. But a group headed by Henry Ford decided to fight ALAM. Ford and his group eventually won because the engine in Selden's patent was based on a type of gasoline engine using the Brayton Cycle and the engine actually used by commercial auto makers was based on the Otto Cycle. ALAM was defeated in appeals court in 1911 but not before ALAM had collected hundreds of thousands of dollars in royalties. The Selden patent was never declared to be invalid but it expired in 1912 shortly after the appeals court ruled in favor of Ford.

Did the Selden Patent (and the formation of ALAM) help the fledgling automobile industry? No, in fact it inhibited the industry. It was a classic example of extracting value from what was arguably not an invention at all. Many people had envisioned the coupling of engines with wagons to make a self-powered vehicle. It took a very strong man, Henry Ford, to stand up to ALAM and defeat what was essentially an attempt to control the early automobile industry.

Image from Wikipedia

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