Lawmakers consider reducing car part patents to boost third-party manufacturers

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But he added that "[I]ndependent garage owners fear they will go out of business if the Patent Act is used by auto manufacturers to obtain design patent protection for more and more individual parts rather than for the design of the car a whole."

For good measure, Goodlatte also said that "[I]nsurers worry that the costs of insuring vehicles will increase for consumers if manufacturers aggressively assert these rights because there will be less competition for replacement parts."

Lawmakers on the House Judiciary Committee's subcommittee on intellectual property heard from all three groups during a hearing about the Promoting Automotive Repair Trade and Sales (PARTS Act) on Wednesday. The measure, H.R. 3889, was introduced by Reps. Darrell Issa (R-Calif.) and Zoe Lofgren (D-Calif.) after previous efforts to carve a patent exemption for third-party auto part manufacturers were unsuccessful.

Testifying on behalf of the Alliance of Automobile Manufacturers on Wednesday, patent attorney Kelly Burris said she hoped proponents of the PARTS measure would continue to have bad luck in the legislative process.

"Patents provide an incentive to be creative," she said. "Why would we expect that creativity to continue when we remove the incentive?"

Burris said that "[I]nstead of a quid pro quo, this legislation amounts to a quid pro nihil, or something for nothing for design patent applicants.

"Auto manufacturers consistently lead the world in [research and development] spending, to the tune of $18-20 billion a year," she told the panel. "Design protection encourages innovation and creates jobs in the United States."

Consumer Federation of America Public Affairs Director Jack Gillis offered a much different take, telling lawmakers that "the lack of competition for repair parts will seriously harm consumers.

"In the early 1990s, the car companies came to Congress and asked for special design copyright protection on these replacement parts and Congress said no," Gills said. "Our concern today is that the car companies are now using design patents, not for the important and legitimate protection of the overall design of their vehicles, but to prevent competition when it comes to getting the parts we need to repair our vehicles."

Gillis added that he and other supporters PARTS Act wanted to ensure that third-party auto parts that would be allowed to be sold under the new legislation did not affect the mechanical operation of cars.

But Burris said it was not always a simple to make a distinction between a part that affects the operation of a car and one that alters its looks.

"Although the law dictates that a design must be 'primarily ornamental,' there are functional features of the design patents at issue," she said.

"Take for example a hood with changing contour and lateral steps," Burris continued. "The hood includes these features for structural stiffness, aerodynamics, and to accommodate engine components under the hood. The aerodynamic contour and lateral steps are functional, but the overall design is aesthetic or ornamental."

Insurance company Rockingham Group President Neal Menefee said car insurers have no choice but to use quality collision repair parts, even if they could buy legally buy them from third-party manufacturers.

"The purpose of such parts is only to restore the vehicle’s original, pre- accident appearance," Menefee said. "Naturally, that is what consumers demand and what insurance policies provide; therefore, these are “must match” parts. There is no room for innovation by alternative suppliers so as to avoid allegations of infringement."

Menefee was testifying on behalf of the National Association of Mutual Insurance Companies, Property Casualty Insurers Association of America and Quality Parts Coalition, who are all in favor of Congress passing the PARTS bill.

Goodlatte said it was important for lawmakers to "weigh these competing interests and the consequences of establishing the precedent of creating an exemption to design patent law."

But one of the only areas agreement between the auto industry and the consumer representatives on Wednesday came when Rep. Sheila Jackson-Lee (D-Texas) asked if the auto industry would support the PARTS bill "in any form."

"There's clearly way, way too much money at stake for the car industry for them to ever support the consumer orientated bill that's before them today," Gillis said.

"I'll give you a real succinct answer, and that would be a negative, ghostwriter," Burris answered. "The design patent law calls for 14 years, and that's what we should have."