A bill that would reduce the length of time design patents would apply to exterior collision parts is being considered again in both the U.S. House and Senate Judiciary Committees.
In late April, the Promoting Automotive Repair, Trade and Sales Act of 2013 (PARTS)
was reintroduced in both chambers of Congress by Senate Judiciary Committee Members Sheldon Whitehouse (D-R.I) and Orrin Hatch (R-Utah), and House Judiciary Committee Members Darrell Issa (R-Calif.) and Zoe Lofgren (D-Calif.).
"This bipartisan bill is aimed at helping Americans who depend on their cars to be safe, reliable and on the road so they can get their kids to school and drive to work every day,” Rep. Lofgren said in a prepared statement. "By increasing fair competition in the auto parts market, consumers will ultimately benefit by getting the best value for their dollar when they need to shop for safe, high quality replacement car parts to keep their cars running."
The bills would amend U.S. patent law by lowering the time period car companies can enforce design patents on collision repair parts against alternative and aftermarket suppliers from 14 years to 2.5 years. Before the enforcement period ended, aftermarket suppliers could manufacture, test, market and distribute those parts pre-sale without violating the patents.
Lofgren first introduced a version of the bill back in 2008 after the International Trade Commission ruled in favor of Ford Motor Co.'s complaint that Keystone Automotive Industries, U.S. Auto Parts, and a number of Taiwanese manufacturers had violated portions of the Tariff Act of 1930 by importing aftermarket parts for the F-150.
Although the bill has attracted a variety of sponsors over the years, one key difference this time around is the co-sponsorship of senator Orrin Hatch, a powerful ranking member the Judiciary Committee in the Senate.
“The PARTS Act keeps competition in the marketplace, ensuring that consumers have access to affordable parts they need for their vehicles,” Sen. Hatch said in a press release. “I’m hopeful we can get this legislation passed by the House and Senate and signed into law soon.”
In the past, the bill has set aftermarket parts suppliers and insurance companies against OEMs and some repairers. Insurers and suppliers claim that OEMs want a "monopoly" on replacement crash parts, and that without competition from the aftermarket prices would be higher. OEMs say they are simply protecting the patents on their vehicle designs from sub-standard knock-offs. The Automotive Service Association (ASA) has also opposed the bill based on quality and safety concerns around sub-standard aftermarket parts.
"Our problem is still really with the quality piece," says Bob Redding, the ASA's Washington, D.C., representative. "We want competition, and we want there to be aftermarket parts available, but quality is the key piece, and this bill doesn’t mention quality. We want to see good quality parts so our members to have choices, and that's critically important."
During the last Congressional session, the bill was opposed by the ASA, the National Association of Manufacturers, the National Automobile Dealers Association (NADA), the Dealers Automotive Service Association, the United Auto Workers, and other industry groups. Those groups argued that the PARTS Act undermined patent protections and investments that OEMs had made in their designs. They further argued that it was possible to create generic replacement parts that did not copy the visual design of the OEM collision repair parts.
Stan Rodman, executive director of the Automotive Body Parts Association (ABPA) disagrees that generic parts could be created that did not physically resemble their OEM counterparts. "With cosmetic sheet metal, unlike functional parts, it has to look the same," he says. "There's no question about that."
As for the quality issue, Rodman believes the market will take care of those issues naturally. "Quality is proven in the field," Rodman says. "If there 's a generic part out there, it has to be like kind and quality. The marketplace demands it." He cited both the CAPA and NSF International certification programs as having a positive impact on aftermarket parts quality.
One change to the bill since the previous Congressional session is that the definition of collision repair parts has been further refined to specifically address exterior parts of the vehicle. Under the current language, those parts include component parts of the exterior of a motor vehicle, "such as a hood, fender, tail light, side mirror, or quarter panel; and does not include an inflatable restraint system or other component part located in the interior of the motor vehicle."
OEMs have been forcefully pursuing design patents and enforcing their claims against aftermarket manufactures in recent years. Aftermarket suppliers have cried fowl, since the current 14-year enforcement period effectively eliminates the potential for using aftermarket parts on damaged vehicles. Even with the average length of vehicle ownership extending beyond 11 years, most vehicles would be off the road once the enforcement period ended, and those that remained would likely not be repaired if they were damaged because the cost of parts would exceed the value of the vehicle.
"If you permit a total monopoly on the design of the part on the car for 14 years, then you basically don't have an aftermarket," Rodman says. "It's gone. Not only that, but there could be implications for the hard parts industry. It gets into a lot of gray areas."
Rodman also points out that even the OEMs would face challenges ensuring enough replacement crash parts were available over the life of the average vehicle. "How is a car company going to possibly stock the type of parts needed for an eight- or nine-year-old car?" Rodman says. "I wouldn't even think the OEMs would want to go there. I think this legislation would actually help them, because they wouldn't be on the hook to provide parts for every ten year old car on the road."
The Quality Parts Coalition endorsed the bill, and has set up a "Write Congress" function on its website (www.KeepAutoPartsAffordable.org) to encourage consumers and industry members to write their representatives in support of the bill.
“The Quality Parts Coalition applauds the bill sponsors for their leadership on this important consumer issue,” said Daniel Morrissey, interim executive director of the Quality Parts Coalition, in a press release. “We urge Congress to move forward with these bills to preserve a 60-year tradition of free markets and fair prices in the collision parts industry.”
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