Nice Work If You Can Keep It

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The usual image of invention is of the solitary genius struggling in his garret with an idea only he has faith in. One day he shouts, “Eureka!” and the world changes. Sometimes this is actually the case. Thomas Edison, after all, was entitled to shout, “Eureka!” more than a thousand times in his life, although I doubt that he did.

In the modern era, however, most great inventions are under development for long periods of time, sometimes generations, before someone solves the last piece of the puzzle and becomes “the inventor.” Dozens of individuals were struggling with heavier-than-air flight at the turn of the century, but it was the Wright brothers (so close to each other as nearly to be a solitary genius) who solved the last major problem, turning. Their insight was to realize that airplanes turn in three dimensions, not two, as does land- or seabound transportation, and they devised a means to allow the aircraft to do so while maintaining stability: wing warping. That was enough, however. They did indeed invent the airplane, for theirs was the first one that worked.

But many of the most important inventions had no inventors at all. It was known as early as the sixteenth century, for instance, that when a wagon is placed on rails, a draft animal (or, often, a human being) can haul much heavier loads. It is not known who first had the idea of using a steam engine instead of a horse or mule to pull the wagon, and it was only in 1797 that Richard Trevithick developed a steam engine powerful enough to do so. Trevithick’s locomotive, however, required a toothed rail to operate, such as that which cog railways still use on steep mountain slopes. Then William Hedley in 1813 built Puffing Billy, which relied on friction for traction. Finally, in 1829, George Stephenson built the Rocket—much more powerful than previous locomotives, thanks to its tubular boiler—and solved a myriad of practical engineering problems in designing the Liverpool & Manchester Railway, the first commercially successful railroad.

In our own time the computer had a thousand fathers, from Charles Babbage in the early nineteenth century to Steve Jobs and Steve Wozniak in the 1970s and 1980s, before it was ready to sit on half the desks in the country.

The automobile, too, had many contributors, from Roger Bacon in the thirteenth century, who first conceived the idea of a self-propelled vehicle, to Nikolaus Otto, who built the first practical four-cycle engine in 1862, Wilhelm Maybach, who invented the carburetor in 1893, and Henry Ford, who introduced the assembly line in 1914.

But unlike the other inventions, which evolved rather than sprang into being from the mind of a single genius, the automobile was patented in its entirety, and by someone who never even built one, George B. Selden. Had he been able to make the patent stick, he would have been F ORBES Four Hundred rich. As it was, given his actual, minuscule contribution to automobile development, he didn’t do badly at all. This was not American patent law’s finest hour.

Selden, who lived in Rochester, New York, was an inventor by avocation. He made his living as a patent attorney and was thoroughly versed in the intricacies of that law, one of the earliest legal specialties.

In 1872 George B. Brayton of Boston had patented a two-cycle internal-combustion engine that was exhibited at the Philadelphia Centennial Exposition, where Selden saw it and was inspired. He built his own three-cylinder model, and he designed, but never built, a vehicle around this engine. In 1879 he applied for a patent for an “improved road engine” that was powered by “a liquid-hydrocarbon engine of the compression type.”

Had that been all, Selden probably would have received his patent in 1881, and thus it would have expired in 1898. But he realized that the automobile was nowhere near a practical (and therefore potentially moneymaking) invention in 1879. Knowing the intricacies of patent law and the foibles of the Patent Office, Selden filed a series of amended applications that had the effect of delaying the issuance of the patent while maintaining his priority. Finally, in 1895, fully sixteen years after his first application and around the time the Patent Office was tightening up its much-abused procedures regarding amended applications, Selden received U.S. Patent No. 549,160. As far as the U.S. government was concerned, George B. Selden had invented the automobile. And receiving the patent at this point was fine by Selden, for the carburetor, developed two years earlier, had finally made the automobile practical. There was now money to be made in the aborning car industry.

In 1899 Selden cashed in. He sold his patent to a syndicate of Wall Street investors headed by William C. Whitney and Thomas Fortune Ryan for ten thousand dollars (perhaps fifteen times that in today’s money) and 20 percent of any royalties they collected from car manufacturers. The following year the syndicate, operating as the Electric Vehicle Company, sued the Winton Motor Carriage Company, then the leading manufacturer of automobiles in the United States. Alexander Winton fought the suit at first but then came to realize that the courts were likely to uphold the patent and settled. (He was right. The court held the patent valid on March 20, 1903.)

The new cartel made a mistake: It said Henry Ford couldn’t join because he didn’t know how to manufacture cars.

Alexander Winton and other manufacturers, who had originally seen the Selden patent as a mortal threat to their livelihoods, began to view it instead as a means of limiting competition in the automobile business, which at that time was ferocious, with dozens of companies coming into the business every year (and a more or less equal number leaving it, usually through bankruptcy). Soon some thirty companies formed the Association of Licensed Automobile Manufacturers (ALAM) and agreed to pay a royalty of 1.25 percent of the retail price of every car they sold. One-fifth of that money was to go to Selden, two-fifths to the Electric Vehicle Company, and two-fifths to the ALAM to finance infringement suits against nonmembers, who would have to apply for membership in the ALAM before being allowed to go into the car business. In other words, the ALAM was a cartel.

Almost immediately the brand-new cartel made a serious mistake. An automobile company, formed just that year, wanted to join. But the ALAM, which, like all cartels, was out to limit the number of members of the club, turned down the Ford Motor Company’s application, saying it had not demonstrated competence in the manufacture of automobiles. Henry Ford’s response, needless to say, was to go right on manufacturing them and, like the majority of American car companies, ignore the Selden patent.

When the ALAM threatened to put him out of business, Ford answered, “Let them try it!” The association sued a few weeks later, but not until May 28, 1909, seven months after the Model T had been introduced, did the suit finally go to trial.

Henry Ford was perfectly candid under cross-examination. “I invented nothing new,” he admitted. “I simply assembled into a car the discoveries of other men behind whom were centuries of work. … Had I worked fifty or ten or even five years before, I would have failed. So it is with every new thing. Progress happens when all the factors that make for it are ready, and then it is inevitable. To teach that a comparatively few men are responsible for the greatest forward steps of mankind is the worst sort of nonsense.”

By pure coincidence, an automobile race from New York to Seattle was getting under way right outside the courthouse in lower Manhattan as the trial was going on. Five cars were in the race, and two of them were Ford Model T’s. One of Ford’s lawyers, Frederic Coudert, watched the spectacle from the window while William Howard Taft, in Washington, pressed a golden telegraph key, the mayor of New York fired a starting pistol in response, and the racecars were off. Coudert then turned to the judge. “Your Honor,” he said, “there is something that puzzles me. I don’t see a Selden car. I see a Ford car, two Ford cars, but I see no Selden car!”

Ford was so confident of the outcome of the lawsuit that he left in the middle of it to go to Seattle to watch the finish of the race. To his delight the winner was one of the Ford cars. But while Ford found triumph in the race, he did not in the court, which ruled that any gasoline-powered car that was manufactured without a license from the ALAM infringed the Selden patent.

Ford was distraught by the verdict and even thought of selling out to William Durant, the founder of General Motors. The deal fell through when Durant couldn’t raise the cash he needed. Meanwhile, Ford was appealing the decision.

On January 11, 1911, the appellate court handed down its ruling: The Selden patent was valid only for cars using the Brayton two-cycle engine that Selden had spotted so long ago. The gas-powered automohile, it said, overall was a “social invention.”

The following night the Ford Motor Company held a raucous victory party. Ford attended, a broad grin on his face, but his mind was obviously somewhere else, thinking beyond the moment of triumph.

A friend sat down next to him and congratulated him on his victory, but Ford obviously did not hear a word of what he said, for he suddenly turned to him. “Nobody can stop me now,” Ford said. “From here on in the sky’s the limit.”

Ford was right, of course, and the world changed.