The Association of Licensed Automobile Manufacturers (ALAM), originally the Manufacturer's Mutual Association (MMA), was an organization originally formed to challenge the litigation of the fledgling automobile

Automobile

An automobile, autocar, motor car or car is a wheeled motor vehicle used for transporting passengers, which also carries its own engine or motor...

 industry by George B. Selden and the Electric Vehicle Company

Electric Vehicle Company

-History:The Electric Vehicle Company was founded as a holding company of battery-powered electric automobile manufacturers made up of several car companies assembled by Isaac L. Rice beginning in 1897. It was taken over in 1899 by William C. Whitney and P. A. B...

. 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.

Noble beginnings

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 Automobile Company

The Columbia Automobile Company was a leading early Hartford, Connecticut, United States manufacturer of automobiles.The Columbia Automobile Company was created as a joint venture of the Motor Vehicle Division of the Pope Manufacturing Company of Hartford, Connecticut, and the Electric Vehicle...

. 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, and his Winton Motor Carriage Company

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.-1896:...

. 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; 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

Henry Bourne Joy was President of the Packard Motor Car Company, and a major developer of automotive activities as well as being a social activist....

 and Frederic L. Smith

Frederic L. Smith

Frederic Latta Smith was an American football player and pioneer of the automobile business. He played college football team at the University of Michigan and was the quarterback of the 1888 Michigan Wolverines football team. He later became a pioneer in the automobile business in Michigan...

 of Packard

Packard

Packard was an American luxury-type automobile marque built by the Packard Motor Car Company of Detroit, Michigan, and later by the Studebaker-Packard Corporation of South Bend, Indiana...

 and Olds

Oldsmobile

Oldsmobile was a brand of American automobile produced for most of its existence by General Motors. It was founded by Ransom E. Olds in 1897. In its 107-year history, it produced 35.2 million cars, including at least 14 million built at its Lansing, Michigan factory...

, 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 5-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

Ford Motor Company is an American multinational automaker based in Dearborn, Michigan, a suburb of Detroit. The automaker was founded by Henry Ford and incorporated on June 16, 1903. In addition to the Ford and Lincoln brands, Ford also owns a small stake in Mazda in Japan and Aston Martin in the UK...

 was capitalized in 1903, and Henry Ford

Henry Ford

Henry Ford was an American industrialist, the founder of the Ford Motor Company, and sponsor of the development of the assembly line technique of mass production. His introduction of the Model T automobile revolutionized transportation and American industry...

 immediately attempted to secure a Selden license. He was denied, officially due to his past business failures (the Detroit Automobile Company

Detroit Automobile Company

The Detroit Automobile Company was an early American automobile manufacturer founded on August 5, 1899, in Detroit, Michigan. It was the first venture of its kind in Detroit. Automotive mechanic Henry Ford attracted the financial backing of three investors; Detroit Mayor William Maybury, William...

 and the Henry Ford Company

Henry Ford Company

The Henry Ford Company was the second company for Henry Ford, founded November 3, 1901. It resulted from the reorganization of the Detroit Automobile Company, his first unsuccessful attempt at automobile manufacture a year before. In March 1902, Ford left the company following a dispute with his...

, 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 market for affordable 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 Hough found legitimacy in the Selden patent. The court of appeals later overturned the ruling, finding in favor of Ford on January 9, 1911. The ALAM chose not to contest the ruling.

External Links

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