The Association of Licensed Automobile Manufacturers (ALAM), began as the Manufacturer's Mutual Association (MMA), an organization originally formed to challenge the litigation of the fledgling
automobile industry The automotive industry comprises a wide range of companies and organizations involved in the design, development, manufacturing, marketing, and selling of motor vehicles. It is one of the world's largest industries by revenue (from 16 % such ...
George B. Selden George Baldwin Selden (September 14, 1846 – January 17, 1922) was a patent lawyer and inventor who was granted a U.S. patent for an automobile in 1895.Flink, p. 51 ''Probably the most absurd action in the history of patent law was the grantin ...
and the Electric Vehicle Company. Ultimately, the organization took advantage of its power and became Selden's greatest ally. In exchange for favorable royalty rates, the group gained the power to litigate and exclude other manufacturers from licensing, making them the most powerful group in the early automotive industry.

Early history

In 1899, the Electric Vehicle Company purchased the rights to Selden's automobile patent. The patent was deemed flimsy by most of the industry, but the company purchased the rights to guarantee the legality of their new venture, the
Columbia Automobile Company Columbia was an American brand of automobiles produced by a group of companies in the United States. They included the Pope Manufacturing Company of Hartford, Connecticut, the Electric Vehicle Company, and an entity of brief existence in 1899, ...
. A year later, however, the Columbia Automobile Company was in shambles thanks to internal corruption and low demand for electric vehicles, and the Electric Vehicle Company turned to the Selden patent as an alternative source of revenue. They set out to have manufacturers pay a 5% royalty on all cars produced. By 1900, The Electric Vehicle Company launched several lawsuits against automobile manufacturers. Their ultimate target among the fray was
Alexander Winton Alexander Winton (June 20, 1860 – June 21, 1932) was a Scottish-American bicycle, automobile, and diesel engine designer and inventor, as well as a businessman and racecar driver. Winton founded the Winton Motor Carriage Company in 1897 in Clev ...
, and his
Winton Motor Carriage Company The Winton Motor Carriage Company was a pioneer United States automobile manufacturer based in Cleveland, Ohio. Winton was one of the first American companies to sell a motor car. In 1912 Winton became one of the first American manufacturers ...
. Originally formed in 1896, the Winton Company was by 1900 the highest-volume automobile producer in the US. If the patent were to gain validity in the industry, Selden believed, they needed to tackle the largest manufacturer. The Winton Company's defense made the costly mistake of concentrating on challenging the patent’s validity through
demurrer A demurrer is a pleading in a lawsuit that objects to or challenges a pleading filed by an opposing party. The word ''demur'' means "to object"; a ''demurrer'' is the document that makes the objection. Lawyers informally define a demurrer as a de ...
; by 1902 the case was still tied up and Winton was considering a settlement. In response to his distress, other independent automobile makers formed a group called the Manufacturers Mutual Association to breathe new life into Winton's legal defense. Formed by
Henry Bourne Joy Henry Bourne Joy (November 23, 1864 – November 6, 1936) was an American businessman and President of the Packard Motor Car Company. He was a major developer of automotive activities as well as being a social activist. In 1913, Joy and C ...
Packard Packard or Packard Motor Car Company was an American luxury automobile company located in Detroit, Michigan. The first Packard automobiles were produced in 1899, and the last Packards were built in South Bend, Indiana in 1958. One of the "Th ...
Frederic L. Smith Frederic Latta Smith (February 6, 1870 – August 6, 1954) was a pioneer of the automobile business. He was one of the founders of the Olds Motor Works in 1899 and of General Motors Corporation in 1908. He was also the president of the Assoc ...
of Olds, the two entrepreneurs used their position to threaten the Electric Vehicle Company. The MMA called for much lower royalty payments and for the legal and license rights to be controlled by the MMA, or else they would bolster Winton's dying legal fund.

Control of the industry

By 1903, the organization had officially become the Association of Licensed Automobile Manufacturers, and had secured favorable rights from the Electric Vehicle Company. Only a few months after the formation of the organization, Winton became an ALAM member, and the suit against his company was dropped. The patent had gained legitimacy without ever having its validity determined. The ALAM gained from the agreement, giving them control over the entire automobile industry for a relatively low cost. The group negotiated a 1.25% royalty on all cars produced, one-half of one percent of which went directly into the ALAM legal and operations funds. Applications for ALAM membership and a Selden license were granted only by the unanimous decision of a five-member executive board. This system left ALAM members with royalties considerably lower than the costs of trying the Selden patent in the courts, and gave existing members the ability to exclude and even litigate unlicensed competitors. The ALAM's exclusionary policies were ultimately its undoing. The up-and-coming
Ford Motor Company Ford Motor Company (commonly known as Ford) is an American multinational automobile manufacturer headquartered in Dearborn, Michigan, United States. It was founded by Henry Ford and incorporated on June 16, 1903. The company sells automobi ...
was capitalized in 1903, and
Henry Ford Henry Ford (July 30, 1863 – April 7, 1947) was an American industrialist, business magnate, founder of the Ford Motor Company, and chief developer of the assembly line technique of mass production. By creating the first automobile that m ...
immediately attempted to secure a Selden license. He was denied, officially due to his past business failures (the Detroit Automobile Company and the Henry Ford Company, specifically), and also due to the protectionist climate of the ALAM. Frederic Smith of Olds was the executive board member most outspoken against Ford’s admission to the ALAM, and also had the most to lose from such an admission, as he held most of the
Detroit Detroit ( , ; , ) is the largest city in the U.S. state of Michigan. It is also the largest U.S. city on the United States–Canada border, and the seat of government of Wayne County. The City of Detroit had a population of 639,111 at ...
market for mass-produced automobiles. On October 22, 1903, the ALAM filed suit with the Ford Motor Company, and what followed was a messy public relations battle. The ALAM launched a campaign threatening to sue those who purchased Ford automobiles. Ford responded in-kind, summing up their position as, "We believe that the art would have been just as far advanced to-day if Mr. Selden had never been born." On September 15, 1909, presiding judge Charles Merrill Hough found legitimacy in the Selden patent. The court of appeals later overturned the ruling, finding in favor of Ford on January 9, 1911. ALAM chose not to contest the ruling.

See also

* The Wright brothers patent war, another vehicular technology patent lawsuit of the same time period *
Intellectual property Intellectual property (IP) is a category of property that includes intangible creations of the human intellect. There are many types of intellectual property, and some countries recognize more than others. The best-known types are patents, c ...
* Patent troll *
Cartel A cartel is a group of independent market participants who collude with each other in order to improve their profits and dominate the market. Cartels are usually associations in the same sphere of business, and thus an alliance of rivals. Mo ...
* SCO–Linux controversies


* ''The New York Times, (NYT)'' "Motor Vehicle Patent Case", November 12, 1900 *
Motor Car Patents Upheld by Court
, September 16, 1909 *

, January 10, 1911 **" ttps://pqasb.pqarchiver.com/nytimes/104854514.html?did=104854514&FMT=ABS&FMTS=AI&date=Jan+13%2C+1911&author=&desc=WON%27T+CONTEST+DECISION. Won't Contest Decision, January 13, 1911 * Greenleaf, William. ''Monopoly on Wheels: Henry Ford and the Selden Automobile Patent'', Wayne State University Press, 1961; * Lacey, Robert. ''Ford: the Men and the Machine'', Little Brown and Co;


External links

The Selden Motor Wagon
Photos of the vehicle, plus articles about the gestation of the patent and the lengthy lawsuit which followed

Seldon Patent {{SAE International Automobile associations in the United States Business organizations based in the United States