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last updated on December 16, 2009

AFTERMARKET AUTO PARTS

THE ISSUE

The use of a competitive repair-parts market to provide aftermarket parts for American consumers.

IT IS IMPORTANT BECAUSE

Prior to the development of a competitive repair-parts market in the 1970s and 1980s, auto manufacturers had no competition for parts to repair a vehicle after a crash. Consumers who needed to repair their vehicles had to obtain replacement parts from original equipment manufacturers, eliminating the choice for lower-priced replacement parts, often referred to as aftermarket parts, crash parts, or generic parts. After the development of a more competitive market, results have increased customer choice, lowered costs, and lowered OEM prices for parts.

With the use of aftermarket parts, American consumers have benefited greatly from lower repair costs, and consequently, lower insurance costs, as a result of a competitive repair-parts market. Typically, these parts are 26 percent to 50 percent less expensive than those issued by manufacturers.

Automobile manufacturers have worked to keep aftermarket parts off the market by obtaining design patents, eliminating competition through the enforcement of these patents on specific replacement collision parts. Competition in the auto repair market saves consumers more than $1.5 billion each year, an amount that has grown since the development of a competitive repair-parts market in the United States. This could be reversed by the design patent laws and use of these parts would be considered an act of infringement.

A legal case impacting the importation of aftermarket parts, Ford v Keystone, was on appeal through the United States Courts of Appeals for the Federal Circuit. Ford v Keystone is a case in which Ford is suing the importers of aftermarket parts and was brought in front of the International Trade Commission. Ford appealed because the ITC ruled against them. Before a decision was handed down on the appeal, Ford agreed to a confidential settlement extending through September 30, 2011. Because this is a temporary agreement only between Ford and a select few companies, a legislative fix is still the preferred option.

In the 111th Congress, NAMIC has worked closely with the Quality Parts Coalition, recently named Chairman of the Board of Directors of the coalition, encouraging introduction and adoption of legislation. On June 25, 2009, Rep. Zoe Lofgren, D-Calif., introduced HR 3059, the Access to Repair Parts Act, in the U.S. House of Representatives and Senator Sheldon Whitehouse, D-RI, introduced identical legislation in the Senate, S 1368. This “repair clause” legislation would amend current patent law and preserve competition in the automotive replacement parts market, providing options for budget-conscious consumers and helping to keep businesses afloat in these tough economic times.

LEGISLATIVE HISTORY

In the 110th Congress, NAMIC joined a coalition of consumer advocates, insurance companies, and the repair industry to push for introduction of legislation to provide a design patent exemption for alternative repair parts used for the purpose of repairing a vehicle to its original appearance.

In March 2008, Rep. Zoe Lofgren, D-Calif., introduced HR 5638 to create a “repair clause” in the United States design patent law, so that the manufacture and sale of aftermarket parts is not considered an act of infringement. This legislation would have ensured freedom of consumer choice and the continued availability of affordable auto body parts simply by maintaining business as usual. HR 5638 was referred to the Judiciary Committee and did not receive committee consideration. No Senate companion bill was introduced in the 110th Congress.

NAMIC POSITION

NAMIC strongly supports consumer choice and competition in the marketplace for replacement auto parts.

CONTACT INFORMATION

For more information, please contact Kathy Mitchell, federal affairs director, at (202) 580-6744 or kmitchell@namic.org.

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