Henry Ford's Own Story: How a Farmer Boy Rose to the Power that goes with Many Millions, Yet Never Lost Touch with Humanity
John Stuart Mill · en
Seldon held a basic patent covering the use of the gasoline engine as
motive power in self-propelled vehicles. When automobiles began to be
put on the market, he claimed his right under that patent to a royalty
on all such vehicles. Other automobile manufacturers almost without
exception acceded to his claim and operated under a lease from him,
adding the royalty to the selling price.
Henry Ford balked. He had been running a self-propelled gasoline engine
long before Seldon had applied for his patent; furthermore, the
royalties interfered with the long-cherished dream of cheapening his
cars. He flatly refused to make the payments.
The lessees of the Seldon rights, perceiving in Ford a dangerous
adversary in the automobile field, who would become still more dangerous
if he succeeded in eliminating the royalty payments from his
manufacturing costs, immediately began to fight him with all the
millions at their command.
CHAPTER XXIII
FIGHTING THE SELDON PATENT
By sheer force of an idea, backed only by hard work, Henry Ford had
established a new principle in mechanics; he had created new methods in
the manufacturing world--methods substantially those which prevail in
manufacturing to-day; now he entered the legal field. His fight on the
Seldon patent--a fight that lasted nearly ten years--was a sensation not
only in the automobile world, but among lawyers everywhere.
The intricacies of the case baffled the jurists before whom it was
tried. Time and again decisions adverse to Ford were handed down. Each
time Ford came back again, more determined than before, carried the
contest to a higher court and fought the battle over again.
On one side the Association of Licensed Automobile Manufacturers was
struggling to save patent rights for which they had paid vast sums of
money, to maintain high prices for automobiles, and to protect their
combination of manufacturing interests. On the other, Ford was fighting
to release the industry from paying tribute to a patent which he
believed unsound, to smash the combination of manufacturers, and to keep
down his own factory costs so that he could make a still cheaper car.
With the first adverse decision, the A. L. A. M. carried the fight into
the newspapers. Most of us can recall the days when from coast to coast
the newspapers of America blossomed with page advertisements warning
people against buying Ford cars, asserting that every owner of a Ford
car was liable to prosecution for damages under the Seldon patent
rights.
Those were chaotic years in the industry. The hysteria which followed
the huge profit-making of the first companies, checked only temporarily
by the panic of 1907-8, mounted again in a rising wave of excitement.
Dozens of companies sprang up, sold stock, assembled a few cars, and
went down in ruin. Buyers of their cars were left stranded with
automobiles for which they could not get new parts.