September 15, 1909 – Henry Ford loses legal fight of a lifetime, files appeal

It was on this day in 1909 that a court battle between George Selden and Henry Ford that started on October 22, 1903 came to an end…almost. To get to this point, let’s review: George Selden held an 1895 US patent for the gasoline powered automobile. This made him eligible to receive royalties from all automakers in the United States, all without manufacturing any vehicles himself. With executives at Electric Vehicle Company (EVC), he founded the Association of Licensed Automobile Manufacturers (ALAM) in 1903 as an overlord of the American auto industry. This association set up a simple way for automakers to pay their royalties to Selden and the EVC. 

When Henry Ford set up Ford Motor Company in 1903 he tried to join ALAM, but he was denied. It’s theorized he was not admitted because numerous former investors and other partners of Ford had already joined and were high in the ranks at ALAM, thus having the authority to shut Ford out of the young industry. Undeterred, Ford began producing automobiles, but he was soon slapped with a patent infringement lawsuit.

On this day in 1909 a court ruled in favor of ALAM, finding legitimacy in the Selden patent. That wasn’t the end. Ford appealed, knowing his newly released Model T was at stake. The case rose to the US Circuit Court of Appeals, where Ford fought one specific aspect of the patent. He argued the Selden patent referenced the use of a Brayton cycle engine, where as his vehicles used an Otto cycle engine. This argument won his appeal on January 11, 1911. The lawsuit ultimately broke down the monopoly held by Selden and ALAM. Automakers finally had the freedom to manufacture without paying any royalties.