Automakers have invested time and money in creating parts that work together and say they should be compensated for their efforts. Legislation in the House and Senate would cut the period during which original equipment manufacturers have exclusive rights to manufacture, market and sell their parts.
Two weeks ago, automaker Chrysler Group LLC sued parts manufacturer LKQ Corp., seeking damages for what it alleges was infringement on 10 patents for the design of car repair parts.
The lawsuit was part of a recent trend by original equipment manufacturers — commonly known as OEMs — to defend their patents. Some lawmakers are concerned that the aggressive litigation against makers of aftermarket parts will reduce competition, driving up the cost of repairs and insurance for consumers.
At issue is how long OEMs should be able to legally enforce design patents on the parts used to repair vehicles damaged in a collision. Currently, OEMs can defend their design patents for 14 years.
House Oversight and Government Reform Chairman Darrell Issa — who made his fortune in the auto alarm business —introduced a bill (HR 1663) that would cut to just two and a half years the period during which OEMs can enjoy exclusive rights to manufacture, market and sell their parts.
Joining the Republican as an original co-sponsor of the bill was fellow Californian Zoe Lofgren, a Democrat. Rhode Island Democrat Sheldon Whitehouse and Utah’s Orrin G. Hatch, the ranking Republican on the Senate Judiciary Committee, joined forces to introduce a companion Senate bill (S 780).
Issa said the effort to limit exclusivity by the OEMs “crosses the ideological spectrum and it has gained strength as members and the public better understand the issue.”
A 2012 incarnation of Issa’s bill never advanced beyond a Judiciary subcommittee hearing, but aides and lobbyists working on the issue say concern is growing as the OEMs become more litigious. Companies have been making aftermarket parts for years, but only in the past decade have automakers been so aggressive about flexing their legal muscle.
A milestone in the controversy was a 2008 court decision affirming that seven design patents on parts for the F-150 pickup truck had been infringed by aftermarket parts makers.
The automakers say they have invested lots of time and money in creating parts that work together and should be compensated for their efforts.
“Removing design protection promotes unfair copying to the detriment of U.S.-based designers, manufacturers, workers, and dealers,” a coalition of groups led by the Alliance of Automobile Manufacturers wrote in opposition to an earlier version of the bill. “It is a license for ‘free riders’ to deprive innovators of any reward for the commercial risk that has been taken and potential employment of workers needed.”