Auto makers had to pay a royalty to the Association of Licensed Automobile Manufacturers (the parent company of the Selden Patent).
Not to my surprise, Henry Ford
The way Ford challenged Selden's (photo left) rights to the patent was to guarantee to protect any auto maker who ignored the patent and just made gasoline-powered vehicles without paying royalties.
Even though a court decided to uphold Selden's Patent rights in 1909, Ford took it to the Court of Appeals and got the decision overturned.