NAMIC is pleased to report that earlier today legislation was introduced in the House of Representatives that would amend current patent law and preserve competition in the automotive replacement parts market. The bill, the “Promoting Automotive Repair, Trade, and Sales” (PARTS) Act, was introduced by Reps. Darrell Issa, R-Calif., and Zoe Lofgren, D-Calif., and was the culmination of several months of effort laying the groundwork for a concerted effort in the second half of the 112th Congress.
The development of a robust aftermarket industry for collision repair parts has resulted in a more competitive market, increased consumer choice, and lower repair costs for drivers and insurers. However, for the past decade, automobile manufacturers have been actively working to limit competition in this market by obtaining design patents on specific, individual repair parts. Several expensive prosecutions at the International Trade Commission have made clear that the entire industry is in jeopardy of being litigated out of business in the United States.
Introduced by Rep. Darrell Issa (R-CA), who chairs the House Judiciary Subcommittee on Intellectual Property, Competition, and the Internet, and Subcommittee member Rep. Lofgren (D-CA), the legislation would limit the design patent on an auto repair part to two and a half years, barring sales of a competitive product while allowing for competitors to design, manufacture and advertise their own versions during that time period.
“The patent system established by Reps. Issa and Lofgren’s bill maintains the incentive for auto manufacturers to be innovative in their parts designs,” Grande said. “But it also recognizes the importance of market competition which reduces costs for consumers who rely on their cars to get to work or take their children to school.”
A 2010 study by NAMIC found that elimination of competition for repair parts could increase the average annual insurance premium for an automobile by as much as $109. Cosmetic aftermarket repair parts can cost as much as 50 percent less than those made by the original manufacturer, and have no bearing on safety. The Insurance Institute for Highway Safety has said that the use of such parts is “irrelevant” to the crash-worthiness of a vehicle.
“These parts exist solely to make a vehicle look the same after a crash as it did before,” Grande said. “Consumers should not be denied a choice for these parts or forced to pay higher prices.”
Contact: Matt Brady
Director of Media Relations