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How long did Henry Ford a monopoly on car manufacturing?

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highly unlikely that or most of the other auto even knew about the patent as they forged with their plans. would have quickly it because it contained nothing they could or would use in and building their own cars. had even committed the grave of mounting the engine directly on the axle. Even if the type of he specified had been suitable for such a design wouldn’t survived more than a few of rough travel.

So for the first few the Selden patent lay quietly in the with no takers to manufacture cars and thus pay the inventor a

Out of Obscurity

But in 1899 some things occurred that bring the Selden patent out of and initiate one of the most celebrated in patent history. A Wall syndicate headed by financiers C. Whitney and Thomas Fortune gained control of a firm the Electric Vehicle Company. For a it had seemed that there be a future in electric-powered cars, because electric streetcars performing well. But then as the problem was lack of a good battery with enough to do the job. So with electric sales plummeting, the firm’s manager came up with the of acquiring rights to the Selden and then demanding all other of gasoline-powered vehicles to pay royalties of 5 on each vehicle’s retail

They struck a deal Selden that gave the an initial payment and a portion of revenues. With the patent control, Electric Vehicle a New York law firm to send out warning all manufacturers that were infringing the Selden and should desist or make compensation to the owner thereof.

The shocked the industry, and to drive their point, Electric sued several manufacturers, the prestigious Winton Company of While Winton was fighting other manufacturers huddled to an answer to the Selden threat. that they had combined the group met Whitney in New York and put three proposals: (a) They pay a 1 1/4 percent royalty, with going to Electric Vehicle and the to their association; (b) the association decide who would and would not be under the patent; and (c) the association say who would and would not be licensed the patent.

Whitney, realizing he had been by men who could put him to considerable expense in fees, agreed to their and thus the ALAM was born. The against Winton was also and Winton joined the ALAM, from opponent to advocate of the patent.

Some auto accepted the ALAM’s terms and licensed manufacturers. But others out and looked to Henry Ford for as the dispute lingered on for years. In the attorneys for both sides depositions and took part in as they prepared for trial. The was also debated in the press, and sympathy grew for Ford as a battling the Goliath of organized interests. A number of the independents who outside the ALAM were that Ford would win the court trial, thus the Selden patent.

This relieve everybody of the need to pay or obtain licenses. It would deny the ALAM the power to the industry.

But Ford was in for a surprise that his tenacity and determination. The Selden case finally came to on May 28, 1909, before Judge Merrill Hough in the federal for the southern district of New York. attorney had been apprehensive Judge Hough because the did not seem to understand the technical in the case. Hough took all to review the evidence and then in favor of the Selden interests—that is, the September 15, 1909. It was a crushing for Ford and the independent manufacturers who had the patent would be ruled

Most of them deserted The most important person to was Billy Durant, who had founded Motors the year before. He his peace with the ALAM by and paying $1 million in back for the car companies now in the GM tent.

For most the battle was over, and they themselves to paying royalties the expiration of the patent in November

Ford Holds Out


But not Henry Though he was now well on his way to great and could have easily current and back royalties, he was not to yield anything to the ALAM. in his heels, he backed his legal in filing an appeal. He was joined by a company, because the ALAM had demanded licensing of importers.

The was delayed for a time because the Vehicle Company, which controlled the Selden patent, had bankrupt. The patent was then to another firm and the appeal forward.

And now the gods of destiny on Henry Ford. With the federal appeals court, he won vindication. The case opened on 22, 1910, and the judges handed their decision on January 9,

They ruled that the patent was valid, but only for made to its specifications. This was a victory for Ford, because no automobile had ever been to Selden’s design. Thus the court actually ruled no royalties were required of

Ford was suddenly a national The decision even benefited the of the ALAM, because they too no longer required to pay royalties at a when auto production was to boom, though they felt some regret having contributed to the $5 million in for royalties under the Selden Selden himself had received $200,000 of that amount, a sum for a design that never anything to the development of the gasoline

What lessons can be drawn the Selden patent case? One is that no elite group, government or private, can really winners and losers in an emerging (But even if they the market should be open to all

A second lesson is that the has a mind of its own when it comes to or punishing specific producers. The Henry Ford ranked low in the of other early carmakers and was one wanted to weed out in advance of any market test. But with his of the popular Model T in 1908, he on to win the largest market of all, most of his early rivals failed and went bankrupt.

A third lesson is that we never underestimate the power of a person with an intense in his own ideas and destiny. Such a was Henry Ford in his determination to the car “a necessity rather than a All he ever needed or wanted was the to compete freely in the market—and to our benefit that a blatant to police him out of business didn’t

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