Although Rochester attorney George Selden had never personally invented nor built a car, he did have the intelligence to submit a patent that made it seem like he did. On November 5, 1895, Selden was granted the U.S. Patent No. 549,160 for an enhanced car engine, the patent of which should broadly apply to any form of liquid-hydrocarbon engine of the compression type.
The patent submitted by Selden was unclear to begin with. On top of that, it was really someone else’s idea. He saw a two-cylinder internal combustion engine at the 1872 Philadelphia Exposition and copied it. In 1899, he made the decision to make money from the patent and sold this to Electric Vehicle Company. It so happened that someone else had already been building gas-powered cars, the Winton Motor Carriage Company. Investors at the Electric Vehicle Company thought that this was in violation of the patent they acquired from Selden and made the decision to sue Winton Motor Carriage Company which was the largest car manufacturer in the US during that time. The court upheld Selden’s patent in 1903 while Winton Motor Carriage Company on the other hand was forced to settle.
At first, automobile makers were dismayed by the existence of the patent but soon realized that it was possible to turn the situation around. The patent was one way for them to leverage competition in a very competitive industry. Winton and other car companies met with Selden and the Electric Vehicle Company and together, they agreed to establish the Association of Licensed Automobile Manufacturers (ALAM). Manufacturers who built gas-powered cars but were not members of the organization ended up getting sued. The organization also threatened their potential buyers, saying that they would be slapped with a lawsuit if they bought a car from an unlicensed company.
Most of the members of the Selden group were Eastern carmakers that catered only to the affluent buyers. The Midwestern manufacturers that targeted ordinary people were excluded. One of the Midwestern manufacturers that tried to get into the group but got denied was Henry Ford. He found the demands of ALAM unreasonable and was irked by it. Instead of giving in to these, he went ahead with his plans and ignored ALAM, which got him sued by the organization on October 22, 1903 for patent infringement. The case went to trial in 1909, seven months after the company’s Model T was introduced. Although Ford failed to impress ALAM and its members, he did get most Americans to side his case because they were pleased when Ford made cars accessible to most of them. The judge on the other hand thought that Ford violated the Selden patent and ruled against him.
Things took a different turn in January 11, 1911 when the appeals court ruled in favor of Ford. The court issued a statement saying that the patent was only applicable to replicas of the same exact engine that Selden saw in 1872.