News: Consolidator Report
The Quality Parts Coalition (QPC), a consortium of
independent parts and insurance companies "committed to preserving and
protecting the benefits of a competitive marketplace when repairing damaged
vehicles," is currently working with Congress to introduce two new bills
that would address car manufacturer design patents.
"We believe this is the right time for the
legislation to move given the current economic conditions and the fact that
consumers need to be able to afford to fix their cars so they can get to
work," said Eileen Sottile, executive director of the QPC. "We think
it makes a lot of sense for Congress to take this issue up and find a permanent
solution to the patent challenge."
In 2005, Ford attempted to enforce 14-year design patents
on seven collision replacement parts for the 2004 Ford F-150 by filing a
complaint with the International Trade Commission (ITC). In 2006, a judge ruled
that seven of the 10 design patents were enforceable, but agreed with Keystone Automotive Industries and other
companies that had vigorously contested the case that three patents were
invalid due to Ford’s prior public use of the designs. The ITC then issued a
cease and desist order to stop the importation of these parts into the U.S.
In 2008, Ford filed another design patent enforcement
complaint with the ITC, this time for replacement parts on the 2005 Ford
In 2009, the Access to Repair Parts Act (H.R. 3059/S.
1368) was introduced that would favor the aftermarket and create an exception
from infringement of design patents for certain component parts used to repair
another article of manufacture. The clause, which was tagged to an intellectual
property bill in the Senate, did not pass.
A settlement was reached on April 1, 2009 where LKQ, as
the only distributor of non-OEM aftermarket copies of Ford collision parts
protected by design patents, would pay Ford a royalty for each such part sold
during the agreement’s term, which extends through Sept. 30, 2011.
"We have noticed that the car companies are
continuing to patent more and more parts," said Sottile. "This issue
isn’t going away and it’s something Congress needs to take note of. Consumers
who have the unfortunate circumstance of being in an accident need competition
available and parts readily accessible. If this issue is not addressed, then
this Congress will continue to see more total loss vehicles and escalation of repair
costs. What we are seeing is consumers opting not to fix their cars, which
Sottile said the QPC is cautiously optimistic that the
bills will be introduced.
"We feel there is a great deal of interest on the
Hill and that staffers and members of Congress understand that consumers need
to be protected against a monopoly and the car companies obtaining patents on
all these cosmetic replacement parts," she said.
The QPC has also been working on doing a better job of
communicating its message directly to consumers.
"We’ve been putting great emphasis on social media
by enhancing our Facebook and Twitter presences," said Sottile. "We
want consumers to know that having one source for parts will force them to go
back to the dealer over and over and pay up to 50 percent more for a part just
to fix a car."
Sottile also says the QPC is trying to reinforce to collision repair facilities the positive aspects of aftermarket crash parts.
"I think one of the greatest benefits of aftermarket
parts is the flexible return policies and the limited lifetime warranties that
are better than the car company warranties," she said. "Also, that LKQ pays to not only
replace a part but, on a case-by-case basis, will reimburse for any labor if
there happens to be a problem with the part. But we’re still only talking about
a 2 percent defective rate, meaning that the part didn’t fit exactly the way it