DEARBORN, Mich. and CHICAGO – Ford Motor Co. and LKQ Corp. reached a settlement on collision parts design patent litigation filed by Ford. The settlement will make LKQ the sole distributor of non-original equipment aftermarket copies of Ford collision parts protected by design patents.
LKQ will pay Ford a royalty for each such part sold during the agreement's term (extending to September 30, 2011, and subject to renewal upon mutual agreement of the two companies). In return, during the term of the agreement, LKQ will not challenge the validity and enforceability of Ford's design patents.
Two legal actions are effectively ended with the agreement. The first involved replacement collision parts for Ford's F-150 pickup truck. That case had progressed to the Federal Circuit Court of Appeals. The second action involved replacement collision parts for the Ford Mustang, which was before the U.S. International Trade Commission (ITC). Further details on the agreement are confidential and will not be disclosed, the companies said.
Darryl Hazel, president, Ford Customer Service Division (FCSD) says, "The settlement protects U.S. jobs and provides consumers with choices when repairing their vehicle.”
Hazel also said the settlement will benefit both companies and their customers in the following ways:
* Ford's intellectual property investment is protected.
* Ford will continue its U.S. investment, especially in Southeast Michigan, to design, engineer and produce genuine Ford collision parts for sale through its U.S. dealer network.
* Competition in the market will continue by ensuring consumers have the right to choose between original equipment and non-OE aftermarket parts.
* Ford and LKQ will work together to stop infringement of Ford's design patents.
Hazel noted the settlement does not endorse the use or quality of non-OE aftermarket replacement parts sold by LKQ. He said FCSD and LKQ will continue to compete vigorously.
Joseph Holsten, president and CEO of LKQ, says, "The agreement we reached is beneficial to both Ford and LKQ. As the sole distributor of new non-original equipment aftermarket parts protected by Ford design patents, we will have the sole right to sell these parts in the United States for all of Ford's models."
