Monday, September 27, 2010

'I Invented the Automobile’: The Bitter War over the Selden Patent, 2


In the first part of this two-part series, we saw how Rochester Civil War veteran and patent attorney George Baldwin Selden had applied for a patent on "an improved road engine"--the precursor of the modern automobile--in 1879.

After submitting his application, Selden took advantage of every legal tactic to delay the issuance of a patent. Selden managed to keep his patent application pending for more than 16 years. By then the nascent automobile industry had been born.

Selden sold rights in his patent to William C. Whitney's Electric Vehicle Company. On October 22, 1903, the EVC and George B. Selden, as complainants, filed suit charging patent infringement in the U.S. Circuit Court for the Southern District of New York against C.A. Duerr & Company and the Ford Motor Company. Duerr had the Ford dealership in New York City.

To achieve the greatest effect, the suit was brought at the very beginning of the new model year. In this way, the recently formed Association of Licensed Automobile Manufacturers hoped to scare off potential buyers of the automobiles of unlicensed car builders. "Don't buy a lawsuit with your car," warned ALAM ads in newspapers. Ford countered by offering to bond every buyer of a Ford car against suits for damages.

Judging by the history of patent litigation, the automobile industry could expect a lawsuit of long duration, especially since Ford was determined not to settle out of court.

On the heels of the suit against Ford, four other suits were filed in succession--against the O.J. Gude Company, as a purchaser of a Ford car; against the French firm of Panhard et Levassor, as a foreign manufacturer marketing its cars here; against the John Wanamaker department store, which had succeeded Duerr as the Ford dealership in New York; and against Henry and Albert C. Neubauer, a Dutch company with offices in Paris. It imported Panhard and Renault cars for sale in the United States.

Although only 265 Neubauer cars had been imported in 1902, with this suit the Whitney forces showed that they intended to plug all legal loopholes.

To make adjudication easier, the five suits were joined as two test cases: one made up of the three Ford suits and the other the two Panhard suits. Before 1913, the proceedings in patent suits were not held in open court. Witnesses were questioned before an examiner of the court or a notary public in law offices, hotels or other locations. There was no effective way of excluding extraneous matter. Such a flawed system almost guaranteed a protracted and expensive contest in the courts. Also, such a system practically guaranteed there would be few fireworks or vivid scenes for the press to report.

Adding to the volume of testimony, the complainants refused to enter duplicated testimony for the Panhard suits into the Ford record and insisted that separate depositions be taken. The result was that the complete Selden case record is of prodigious proportions, comprising more than 14,000 pages and containing more than five million words. The massive record is today an invaluable source for information about the early history of the automobile.

Attorneys Galore
Assembled for both sides was an imposing array of the best patent law talent available. For the complainants, the major part of the case was handled by Samuel R. Betts and William A. Redding, aided by a battery of other attorneys.

The Ford suits were defended by a tireless 60-year-old Detroit patent attorney, Ralzemond A. Parker, and the Panhard suits were represented by the firm of Coudert Brothers. Parker, a Midwesterner with an unkempt white beard, Whitmanesque wide-brimmed hat and rumpled clothes, made a striking contrast to the other layers who were the cream of effete Wall Street law firms.

Excitement was high when George B. Selden appeared as a witness. A patent lawyer of repute, he clashed frequently with Parker, charging the air with tension. Selden wore a gold stickpin in the knot of his necktie--a reproduction of the vehicle depicted in his patent drawing, with hubcaps and lights made of small diamonds and a body of sapphires.

Despite the ill-concealed hostility between Parker and Selden, upon completing his testimony, Selden sent a duplicate stickpin "with my compliments" to his Detroit counterpart.

The star witness for the ALAM complainants was Dugald Clerk, a Scottish expert brought here for two months at a reported retainer of $20,000 and a generous allowance for expenses. Clerk was the highly respected author of the standard texts on engines, The Gas Engine (1886) and The Gas and Oil Engine (1896).

It turned out that Clerk's expertise was largely limited to stationary engines. Although Clerk had testified in many British patent actions, his cross-examination at the hands of attorney Parker revealed he was by no means an authority on American patent law.

After completing testimony that added some 300,000 words to the already massive trial record, Clerk ruefully admitted, "If Mr. Parker is right as to American patent law, I fear I have broken down the case of my side."

Motor Vehicles as Trial Exhibits
A highlight of the trial was the rivalry between the motorcars constructed as exhibits in the case. The Selden buggy appeared in two versions--described by the inventor as "Chinese copies" of his patent. One was built in Rochester and the other, looking strangely dissimilar, was built in Hartford. Frederic R. Coudert, the Panhard attorney, scorned the heavy, trucklike Hartford-built Selden vehicle as "much Hartford and little Selden."

The Rochester-built vehicle, constructed under the supervision of the inventor's two sons, incorporated his original 1877 one-cylinder engine, but with the two unfinished cylinders bored out and fitted with pistons. Large metal numbers were added to the sides of the vehicle. These showed the date when the inventor had first conceived his invention, 1877--two years before he had filed his first patent application. The date 1877 applied to a vehicle constructed in the winter of 1905 infuriated the defendants.

Because George H. Day was certain a working example of the Selden patent was needed, he ordered a vehicle to be built in secret in Hartford. More powerful than the one built in Rochester Unfortunately, the Hartford vehicle required the assistance of an air compressor to get it started.

Convinced that a public test of the Selden vehicles would show the flaws of these vehicles, defense attorneys pressured the ALAM to drive them publicly through the streets of the city. After initially agreeing, the Selden forces reneged, insisting that New York's traffic regulations prohibited such demonstrations. Accordingly, the two ALAM exhibits were moved across the Hudson River to a racetrack near Guttenberg, New Jersey.

Of the two vehicles, the Hartford model gave a better performance. This was understandable, for it incorporated a number of features not shown on Selden's original patent drawing, including speed-changing gears, a water-jacketed engine and pneumatic tires.

Hugo C. Gibson, a British mechanical engineer, had been retained by the ALAM to operate its vehicles entered as exhibits. Mr. Gibson fenced with attorney Parker, sometimes claiming to be an expert and at other times, an "ordinary human being." When Parker demanded direct and specific responses, exchanges like the following took place:

A. I have no knowledge in my present capacity of pure flame ignition.
Q. What do you mean by "in my present capacity"?
A. I mean that as an ordinary individual without special knowledge I have no knowledge of pure flame ignition.
Q. Have you any knowledge of "pure flame ignition" as used in this case as an expert?
A. I cannot say what I know as an expert.
Q. As a fact, do you know what flame ignition is as applied to that engine?
A. As an ordinary individual I do not, nor could I possibly.
Q. Do you know as an expert?
A. I cannot tell what I know as an expert.
Q. You mean you can't or your won't?
A. I mean I can't, just as I say.
Q. Why can't you?
A. I don't know.

In September of 1907, ALAM attorneys overcame their reluctance to operate the Selden buggy on the streets of New York. It was demonstrated publicly, being driven on 49th Street between 6th and 9th Avenue. Piloted by Hugo Gibson, it "groaned, missed, choked, overheated and stalled. Gibson was assisted by a mechanic known as "Cranky Louis." According to the magazine Horseless Age, he acquired that nickname because of "his frequent performances in that line."

During these tests the Selden buggy was equipped with electric ignition. The car's average speed was only seven miles and hour. Its longest run was a distance of only 3, 450 feet.

Henry Ford's answer to the Selden exhibits had an interesting genesis. When Dugald Clerk testified that a vehicle powered by a non-compression engine, such as French inventor Etienne Lenoir had patented in 1860, would not move at all, Ford's attorneys pricked up their ears, especially since Lenoir's car had been successfully operated in Paris.

A Ford-Lenoir car, with a primitive carburetor and engine built with the aid of old Selden patent drawings, was constructed and introduced by the defense to challenge the expertise of Dugald Clerk, the ALAM's witness.

As the suits closed their fourth year, the sight of these outmoded vehicles on the streets of New York gave the trial an added fillip and revived public interest in the case. Unfortunately, there never was a simultaneous demonstration of the capabilities of the opposing cars.

Trouble ahead for the ALAM
In 1907, George B. Selden lent his name to the Selden Motor Vehicle Company of Rochester, which became a dues-paying member of the ALAM. It would manufacture motor cars until 1914.
The year 1907 was a bad one for the ALAM. On November 21, its driving force and general manager, 56-year-old George H. Day, died in Daytona Beach, Florida. The following month, the EVC, heavily mortgaged for the past five years, went into receivership with liabilities of $3.5 million. The dynamic William C. Whitney was long out of the picture, having succumbed to appendicitis in 1904 at the age of 63.

The EVC's financial problems touched off a wave of member resistance to payment of royalties to ALAM, an association in trouble. Many firms threatened to leave the association unless the royalty rate was reduced. The 1.25 percent rate was cut to 1 percent in June of 1908, with an added discount of one-fifth for payment within 15 days of the quarterly due-date. This made the effective royalty rate only eight-tenths of 1 percent.

In spite of this reduction, some ALAM members, notably W.C. Durant, then laying the foundation for his General Motors empire, halted their royalty payments entirely. The association countered with suits to force them to pay.

Students of the Selden patent suit have sometimes raised the question of how Ford could sustain the cost of defending against the suits when the Winton Company had found the burden crushing. One answer lies in the swift growth and phenomenal success of the Ford Motor Company. Another explanation is that Ford found it cheaper to fight the ALAM than to pay royalties.

Before 1908, the year the ALAM royalty rate was reduced, Ford would have paid an average royalty of $12.50 on each car sold--but the company was spending only about $6.80 per car to defend the suit. Thus, Ford was spending little more than half the demanded royalty to defend against the ALAM suits. In effect, the ALAM was underwriting the cost of Ford's defense against its litigation. By the autumn of 1908 the ALAM cases had passed their fifth birthday. Most of the testimony had been taken, but the formidable task of preparing briefs still lay ahead. By the middle of 1909, it was estimated that $2 million had been paid to the Selden interests.
Reporting on the progress of the trial, a trade magazine wrote, "The accumulated evidence and exhibits in the case would fill two standard freight cars."

Until new procedures were introduced in 1913, one of the paradoxes of patent litigation was that testimony was taken and the case was prepared long before a judge was appointed. Choice of a judge was also a matter of chance, often determined only by the time when the case came up on the court calendar.

Parker, the Ford attorney, feared the designation of Judge Charles M. Hough, whom he described as "not a patent judge." As it turned out, Hough was the judge assigned to the Selden case.

On May 28, 1909, attorneys for both sides gathered in a courtroom in the mansard-roofed granite Post Office building south of New York's City Hall for the final six-day hearing. When an attorney for the claimants began his argument before Judge Hough by describing the Selden patent, the judge interrupted. "Someone will have to explain to me what the liquid hydrocarbon gas engine is." Clearly Hough was no patent judge.

The strategy of the complainants was simple. They emphasized that Selden's was "the basic, fundamental pioneer patent" and that the difference between engine types was unimportant.

Defense attorney Parker's sprawling argument lost much of its impact by too much attention to the history and development of the prior art, burying his defense in a mass of distracting detail. It had two basic themes. First, that Selden substituted one motive power for another in a well-known combination without producing a new result and as such the new combination was not patentable. Second, that the scope of the patent should be restricted to the particular engine described by Selden, namely the Brayton engine.

An Opinion and an Appeal
Hough listened to the oral arguments and took the huge record away with him to study at his summer home in Rhode Island. Both sides retired to await his verdict. On September 15, 1909, nearly six years after the first suit had been entered, the judge filed his opinion. In it, Judge Hough found himself in complete agreement with the complainants' arguments. He affirmed the scope of Selden's patent and accorded him formal recognition as the inventor of the automobile.

At this, the unlicensed manufacturers' ranks fell apart; the judicial defeat quickly became a rout. Some manufacturers hurriedly approached the ALAM for licenses. W.C. Durant made peace with the association by paying a reported million dollars in back royalties.

Yet a stubborn Henry Ford refused to give in. He bombarded Ford dealers and newspaper editors with telegrams reading, "We will fight to a finish." In lieu of an injunction that would have prevented Ford from manufacturing automobiles, Judge Hough set Ford's bond at $350,000 to cover damages and profits while an appeal was readied. Ford's only hope was that perhaps the judges of the United States Circuit Court of Appeals for the Second Circuit would see the issues differently.

The case moved swiftly to a new conclusion. Fortunately, the tedious taking of testimony had already been accomplished. New briefs were filed, and a four-day hearing was announced for November 22, 1910. Justices were to be Emile H. Lacombe, Henry G. Ward and Walter C. Noyes.

The latter judge, who was to take an active role in the appeal, had heard several important patent cases. The venerable Parker, who had elected to stay in the background in the appeal in favor of younger attorneys, heard this news with satisfaction. This time the defense would finally have what it wanted--at least one "patent judge."

Panhard's attorney, Frederic R. Coudert, had stumbled upon Dugald Clerk's treatise entitled The Gas, Petrol and Oil Engine, published the year before by the reputable New York publishing house of John Wiley. The two-volume work was an updating, revision and consolidation of Clerk's previous books on engines. During his oral argument, Coudert scored a telling blow for the defendants. He asked ALAM attorneys Betts and Redding whether their case was based largely on Clerk's testimony. Their answer was "yes."

At this, Coudert produced a copy of the newly revised edition of Dugald Clerk's treatise on gas engines and asked whether they relied on Clerk as a paid witness or Clerk as an author of the standard treatise on gas engines.

Perceiving where the Panhard attorney was heading, Betts objected that the book was not in evidence. Judge Noyes broke in. "Never mind, Mr. Betts, let Mr. Coudert continue," he suggested. "I think we can judge well enough if what he has to say is applicable or not."

It was a moment a Hollywood director would love. Coudert held up a copy of the book in plain view. Referring to the engine in Selden's patent, he said, "Let us see what Mr. Clerk has to say about it. Not Clerk with a retainer in his pocket, but Clerk, the author." He paused for dramatic effect. "This man who for six years was their retained expert has not a word in his book, not a single syllable, about Selden."

In fact, Clerk's book named others as the true pioneers of the modern automobile. He credited Daimler with the development of the small, high-speed, four-cycle engine, ignoring Selden completely.

"In no work upon gas engines or upon automobiles is the name of Selden mentioned, Coudert pointed out.”If Selden made the invention which he requests the court to find, it seems incredible that not a single scientific writer has ever alluded to it. It is hardly possible that the whole scientific world, including Clerk, is wrong, when it ascribes the perfection of the automobile engine to Daimler and the development of the automobile to Daimler, Benz, and Panhard and Levassor."

Reading aloud from Clerk's appraisal of the Brayton engine that Selden claimed to have modified, the 39-year-old lawyer quoted Clerk: "No one, however, has yet succeeded in carrying Brayton's engine further than he [Brayton] did." In effect, Clerk was contradicting his earlier trial testimony in his latest book, which admitted that Selden had made no improvement to the Brayton engine."

He asked pointedly, "Will the Court prefer the theories of Clerk, the retained witness, to those of Clerk, the distinguished scientist, composing the 'classic' on gas engines? If no one succeeded in carrying the Brayton type of engine further than Brayton himself, wherein did Selden make any improvement?"

Coudert denounced the Selden patent as a gross abuse of the American patent system. "The Selden legend,” he concluded, "has some important elements of viability--money, publicity, talent. It only lacks a foundation in fact, without which most legend must ultimately fall when the fire of historic criticism is directed at them."

Resolution at Last
After only six weeks of studying the record, the appeals judges took a different view from that of Judge Hough. On January 9, 1911, more than seven years after the first suit had been filed, Judge W.C. Noyes read the unanimous opinion of the Court. It represented an acceptance of the defendants' basic arguments. The judges ruled that Selden's patent was legally valid, but restricted to the particular structure detailed by the inventor, a combination of elements not used by any automobile manufacturer. The problem was that it simply did not cover the modern automobile.

Judge Noyes pointed out the substantial differences between Selden's engine and the Otto engine that proved crucial to his decision. Selden's was a two-cycle external compression non-explosive engine had no distinctive external vaporizing device and operated with constant flame ignition. The Otto four-cycle engine mixed fuel and air in the carburetor and used timed electric ignition to explode the resulting mixture in its cylinders.

"He made the wrong choice," the court opined about Selden's designation of the Brayton engine. "The defendants," the judges added, "neither legally nor morally owe him anything." Had Selden adopted the Otto four-cycle engine for his combination, his patent would indeed have covered existing automobiles, which almost exclusively used modifications of the Otto engine. The vindication of Ford and Panhard was complete. Even the court costs had to be borne by the complainants.

Reversal of the decrees of the lower court landed like a bombshell on the licensed auto manufacturers gathered in Madison Square Garden for their annual automobile show. The ALAM talked bravely of an appeal to the Supreme Court, but eventually abandoned the idea. Instead, they invited Henry Ford, the man who had led the fight against them, to the ALAM banquet, where he was greeted with a loud burst of applause and excited cheers. The newspapers described it as "a love feast."

George B. Selden accepted the opinion of the court. "I have succeeded much better than I expected," he told a reporter, "and as my patent has but a year or two to run, the decision has no severe significance."

This was certainly a pragmatic view, for the patent then had exactly one year and ten months of useful life. Privately, though, Selden was disappointed, according to those who knew him. He returned to the comparative obscurity from which he had emerged for a brief turn in the limelight.

It is difficult today, even after the passage of almost a century, to separate truth from legend or propaganda. Nevertheless, some conclusions are possible. Had Ford abandoned the automobile industry in 1903 after the ALAM denied him a license, the motor car would have remained a luxury article for a long period. The advent of the mass-produced, low-priced car would have been delayed.

The sequential production methods of Ford, which influenced other automobile plants and other industries, would have developed at a slower rate. The increased use of the motor car would have been postponed for years.

In the way of reform, the Selden controversy resulted in the adoption in 1913 of a new set of rules of procedure in suits in equity. Long depositions are restricted; testimony is taken in open court, and delays and delaying tactics are no longer possible.

One legend is that the growth of the Ford Motor Company was hindered by uncertainty about the outcome. There is no evidence that plant expansion was affected. It has also been alleged incorrectly that the Selden patent shackled investment, production and innovation in the industry.

The Selden suit had a tremendous effect on the fortunes of Ford. By 1923, half of the ten million cars in the United States were Fords. "Probably nothing so well advertised the Ford car and the Ford Motor Company as did this suit," Henry Ford said in his 1923 autobiography My Life and Work, written with Samuel Crowther.

He might have added that the suit did much to enhance his personal reputation, too. Ford saw to it that the public pictured him as the underdog in the contest, and the public in turn gave him its sympathy. His copywriters portrayed him as a knight on a white charger, single-handedly taking on that evil dragon, "the Trust."

Despite the vehemence expressed by both sides in their advertising, Ford and Selden retained each other's respect. About Ford, Selden said during the trial, "Personally, I am on good terms with Mr. Ford, and I rather admire the business skill with which he has managed his enterprise."
For his part, Ford had no personal animosity toward Selden, "He was a decent old fellow," Ford later remarked to a biographer. "But when others began to make automobiles, he got into the hands of those who wanted to exploit the industry by claiming tribute from every motorcar manufacturer."

Selden clung to the conviction that he was the original creator of the gasoline automobile. Calling himself "the father of the automobile," he spent his declining years in a futile and single-minded attempt to develop a rotary engine.

George Baldwin Selden died in Rochester on January 17, 1922, at the age of 75. On his deathbed he was heard to say, "Morally the victory is mine." His cherished dream that future generations would honor him for his invention died with him. His name survived briefly in the name of the Selden Motor Truck Company of Rochester, in which he had a large financial interest. But it, too, would disappear when the company failed during the Depression that followed Wall Street's massive debacle in 1929.

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