Going back to the source

At Hershey, Pennsylvania in October, RM Auctions offered for sale a 1911 Selden Model 40R Varsity roadster. Expected to bring somewhere above $75,000, the Selden ultimately was sold for $220,000. I can't help but think that at least part of this startling price premium was due to George Selden's status as Inventor of the Automobile.

Yes, really. Or at least, so says US Patent No. 549,160 [link to PDF file], which was issued to Selden in 1895. He had in fact built a prototype as early as 1877, but hadn't gone into actual production. In 1899 his plans became clearer: he teamed up with William C. Whitney, who was going to be building electric cars, with the intention of licensing automakers under that patent and collecting a five-percent royalty. In 1902 a group called the Manufacturers Mutual Association was formed to fight Selden, who had already filed several lawsuits against rivals; they negotiated with Selden, and eventually, as the Association of Licensed Automobile Manufacturers, the group became his enforcement arm. As part of the deal, Selden cut the royalty to 1.25 percent, effectively making it cheaper to pay up rather than to fight it in court.

The one major holdout was Henry Ford, and he wasn't intending to be a holdout: he duly applied to ALAM for a license, and was turned down, ostensibly because of his previous business failures. (Wikipedia says that the opposition came mostly from ALAM board member Frederic Smith of Olds Motor Works, who didn't want Ford's products competing with Lansing-built Oldsmobiles in the Detroit market.) Ford went into production anyway, and was promptly sued by ALAM; the suit dragged on for six years before a court upheld the Selden patent. Ford promptly appealed. The New York Times reported on 13 February 1910:

The case never got to the Supremes; Ford was able to persuade an appellate court in 1911 that the patent as granted covered only vehicles with engines using the Brayton cycle, while Ford and other manufacturers were using the Otto cycle. ALAM chose to let the matter drop, perhaps because the Selden patent was due to expire in 1912 anyway.

Selden himself never produced any cars until he acquired a manufacturer in Buffalo in 1906. The first Selden cars, advertised as "Made by the Father of Them All," appeared in 1907; about eight thousand were built before the company shifted its focus to trucks in 1914. The Varsity roadster had a 40-hp engine — some lesser Seldens had 30 hp — and sold for around $2000. (Ford's Model T ran $850, dropping to $440 by 1915.) Only six of Selden's cars still exist today; questionable patents, however, are all over the place.

Incidentally, in that same auction in Hershey, a 1911 Oldsmobile Limited 7-Passenger Touring Car, utterly unrestored — the original tires were literally crumbling — brought $1.65 million. The price included a set of new(er) tires.