The U.S. House of Representatives is considering new legislation that would create an exemption in U.S. patent law covering the production of aftermarket automobile parts. If passed, the bill would allow aftermarket part manufacturers to operate without fear of infringing on OEM parts patents, as was the case in the recent dustup between Ford Motor Co. and Keystone Automotive. With the end of Congressional session looming, however, the bill may not make it out of committee this year. H.R. 5638, introduced by Rep. Zoe Lofgren (D-Calif.), states that, “It shall not be an act of infringement to make, use, offer to sell, or sell within the United States or import into the United States any article of manufacture that itself constitutes a component part of another article of manufacture, if the sole purpose of the component part is for the repair of the article of manufacture of which it is a part so as to restore its original appearance.” So far, the bill has six co-sponsors: Rep. Charlie Wilson (D-Ohio); Rep. Rick Boucher (D-Va.); Rep. Sheila Jackson-Lee (D-Texas); Rep. Eddie Bernice Johnson (D-Texas); Rep. Steve Cohen (D-Tenn.); and Rep William D. Delahunt (D-Mass.) The legislation is supported by the Quality Parts Coalition, which has been lobbying for this type of change for several years. “Competition in the auto repair marketplace saves American consumers over $1.2 billion per year,” said Eileen Sottile, executive director of the QPC in a letter to Lofgren. “But, as you well know, elimination of this competition through the enforcement of design patents on specific crash parts will increase the price of items your constituents need after even the most minor of fender benders.” The American Insurance Association also has voiced support for the bill. “Aftermarket parts are good because they foster competition in the automotive parts industry, and competition means lower prices and greater choice for consumers,” says David Snyder, AIA vice president and assistant general counsel. “This bill would help reverse an International Trade Commission ruling that sought to ban the importation of competitive parts. Because of aftermarket parts, average consumer savings can range from 34 percent to 83 percent.” Snyder was referring to the ITC’s decision in 2007 that found Keystone Automotive and other aftermarket parts distributors were infringing on Ford’s patents and copyrights on OE sheet metal parts. While that decision (which was appealed by Keystone) was limited to a few parts for the Ford 2004/2005 F-150 truck, it has significant implications for the aftermarket in future patent litigation cases. Requests for new design patents by automotive OEMs have substantially increased over the past few years, with crash parts accounting for the majority of these patents. “This is really their only option,” says Bob Redding, Washington, D.C. representative for the Automotive Service Association (ASA). “President Bush had a certain amount of days to overturn the ITC decision, and he didn’t. A legislative change is the only option.” Several other countries have instituted similar “repair clause” legislation, including Belgium, Ireland and the United Kingdom. “We foresee the ITC’s decision as triggering many more new [infringement] cases by automakers, meaning increased direct and indirect costs for consumers and threatening dire consequences for an alternative aftermarket parts industry,” says Stanley Rodman, executive director of the Auto Body Parts Association. “Many European countries as well as Australia and New Zealand recognize that misuse of design patent laws in the automotive parts and service industry can be counter-productive for consumers by ultimately robbing the consumer of choice and increasing the costs of replacement collision parts.” Redding, however, doesn’t think the current bill will move forward in the current session. “I’ll be surprised if it goes forward this year,” Redding says. A broader patent reform bill is currently bogged down in the Senate, and the looming party conventions in the summer may also limit the amount of legislation that gets passed by the end of the session in the fall. |
