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“What substandard non-OEM parts translates to for the brand owners, such as Ford, Chrysler and GM, is a tarnishment of their image…” says one witness at hearing.
The U.S. House of Representatives Committee on the Judiciary’s Subcommittee on Intellectual Property, Competition and the Internet recently held a hearing on the Promoting Automotive Repair, Trade and Sales (PARTS) Act, H.R. 3889.
The bill’s sponsor is Rep. Darrell Issa (R-Calif.). The legislation also has five co-sponsors, including Reps. Bill Cassidy (R-La.), Walter Jones Jr. (R-N.C.), Zoe Lofgren (D-Calif.), Ron Paul (R-Texas) and Dennis Ross (R-Fla.). Lofgren has offered similar legislation in a previous congress. Witnesses at the hearing included W. Neal Menefee, president and CEO for Rockingham Group; Kelly Burris, shareholder and chair of Green Technology Practice Group, Brinks Hofer Gison & Lione; and Jack Gillis, director of public affairs at the Consumer Federation of America (CFA).
The bill makes it not an act of infringement with respect to a design patent to: (1) make, test or offer to sell within the U.S., or import into the U.S., any article of manufacture that is similar or the same in appearance to the component part claimed in such design patent if the purpose of such article is for the repair of a motor vehicle to restore its appearance to as originally manufactured; and (2) use or sell within the U.S. any such same or similar articles for such restorations more than 30 months after the claimed component part is first offered for public sale as part of a motor vehicle in any country.
Burris, in opposition to this bill, made the following comments:
“What substandard non-OEM parts translates to for the brand owners, such as Ford, Chrysler and GM, is a tarnishment of their image because the replacement part is presumed to be made by the OEM once the vehicle is back on the road. When the plastic is crazing or the chrome is rusting, consumers will likely think that the OEM does not make quality vehicles. And when the airbag does not deploy because a cheap imitation bumper beam was used in a repair, consumers will also conclude that the OEM does not make safe vehicles. Although the Lanham Act can protect some parts as I mentioned above, under the Lanham Act, this erosion of their famous brands may be difficult to prove, especially if evaluated on the replacement part level. All the more need to maintain design patent protection for the parts that will keep us safe in our vehicles and maintain the quality that we as consumers have paid for and come to expect.”
Gillis also commented on potential effects of the PARTS Act:
“The lack of competition for repair parts will seriously harm consumers. Already-high accident repair costs will skyrocket. Right now, in low-speed crash tests conducted by the highly respected Insurance Institute for Highway Safety, the cost of a simple 5-mph bump into a pole can cost thousands of dollars to fix. Why does it cost so much to repair these vehicles? Because the car companies are able to charge monopolistic prices because of lack of competition.”
ASA, along with 10 other automotive groups, recently sent a letter of opposition to this bill to the chairman of the Subcommittee on Intellectual Property, Competition and the Internet. The letter highlighted concerns about parts quality:
“Manufacturers of unlicensed automobile parts have to meet only one basic threshold: to produce a copy that passes off as an original part. Those who produce such parts incur no costs attributable to original design, research and development, and most importantly, product safety testing. Accordingly, the manufacturer of the original product for whom such unlicensed replacement parts are made does not know how these parts will perform with the rest of the vehicle and how their use will impact the quality and integrity of the original product. Automotive collision repairers are very concerned about the quality of replacement crash parts. Permitting this intellectual property infringement also exposes consumers to significant safety, performance or durability risks without their knowledge.”
To view H.R. 3889, the PARTS Act, visit ASA’s legislative website at www.TakingTheHill.com.