Wednesday, 24 April 2013 22:27

PARTS Act Reintroduced in U.S. House of Representatives

Reintroduced legislation in the U.S. House of Representatives on April 22 is designed to amend patent law regarding automotive parts. House Judiciary Committee members Rep. Darrell Issa (R-CA) and Rep. Zoe Lofgren (D-CA), and Senate Judiciary Committee members Sen. Sheldon Whitehouse (D-RI) and Sen. Orrin Hatch (R-UT) introduced H.R. 1663, Promoting Automotive Repair, Trade and Sales Act of 2013 (PARTS).

Search “PARTS Act” at autobodynews.com for previous analysis of this legislation.

The PARTS Act would amend U.S. design patent law to reduce the exclusivity period car companies hold on design patents for collision repair parts from 14 years to 30 months (or two-and-a-half years) during which time other suppliers could test, research and develop parts on a not-for-sale basis. The current 14-year design patent monopoly prevents aftermarket manufacturers from making or selling external collision repair parts on newer vehicles.

“The decision to purchase an automobile is one of the biggest investments a family makes,” Rep. Issa said. Issa personally holds about 12 automotive patents, many related to automotive alarms, and has amassed a personal fortune of many millions based on his family’s aftermarket parts business.

“With the average sticker price of a new car now exceeding $30,000 and repair costs continuing to rise, hardworking American families deserve access to as many repair part options as possible. The PARTS Act will not only increase consumer choice therefore reducing aftermarket costs but encourage innovation and competition among other aftermarket parts manufacturers.”

“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.  “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.”

“Having to replace a car part is frustrating enough; drivers shouldn’t have to pay artificially high prices set by car manufacturers,” Sen. Whitehouse said. “This bill will preserve competition in the car-parts market and ultimately allow consumers to get safe replacement parts at lower prices.”

“The PARTS Act keeps competition in the marketplace, ensuring that consumers have access to affordable parts they need for their vehicles,” Sen. Hatch said. “I’m hopeful we can get this legislation passed by the House and Senate and signed into law soon.”

Critics of the legislation argue that reducing patent protection to 30 months would make the design of a real car significantly less important than the image of a car as portrayed in cartoons, for example, where copyright patent protection applies for 120 years.

Further, opponents argue that designing and engineering the original part is far more costly than copying it and that automakers rely on the profits from sales of these parts to help offset this cost. If the automakers lose more sales of replacement parts to the aftermarket this loss of profit will only be passed onto the consumer with higher new car prices. Repairers in general are strong proponents of OEM parts except on saving costs for older vehicles.

At a March 16, 2010 hearing in front of the House Judiciary committee, Damian Porcari, attorney and director, Enforcement and Licensing, Ford Global Technologies, said, “The copyists want to eliminate design patent protection because that’s what they make. As soon as their business model includes engines, brakes and air bags, we will likely hear the call for the elimination of patent protection on all types of replacement parts. And it won’t stop with cars. The denial of intellectual property rights will always reduce copiers’ costs.”

Porcari also accused insurers of basing insurance premiums on OEM parts pricing but pushing repairers to install cheaper, non-OEM parts to save money.

The PARTS Act mirrors legislation introduced by Reps. Darrell Issa and Zoe Lofgren in the 112th Congress. It would take effect 90 days after enactment and apply to design patents issued prior to, on, and after the date of enactment.


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