The U.S. House Committee on the Judiciary's Subcommittee on Intellectual Property, Competition and the Internet convened a hearing earlier this month to debate the Promoting Automotive Repair, Trade, and Sales ("PARTS") Act (H.R. 3889), a bill that threatens to drastically limit U.S. design patent owners' exclusive rights in motor vehicle repair parts.  The PARTS Act is supported by insurance companies and after market parts companies who view the bill as a way to spur competition and lower automotive repair costs.  Opposing the bill are car companies and other original equipment manufacturers who claim the PARTS Act will weaken incentive for innovation, promote piracy, and result in low quality replacement crash parts, posing safety, performance and durability risks to consumers. 

In general, design patents protect the ornamental features of a product's form, i.e., the three-dimensional contours and shapes that define a product's configuration and overall appearance but that are not critical to its function.  Specifically, design patents protect a product's ornamental configuration, in other words the way a product looks.  By statute, design patents owners may exclude others from making, using, selling, offering to sell, or importing the patented design for a period of fourteen years.  The U.S. Patent & Trademark Office has awarded design patents in the automotive field for parts such as fenders, mirrors, body design, and grill shape, just to name a few. 

Introduced in February 2012 by U.S. Representatives Darrell Issa and Zoe Lofgren, the PARTS bill would legalize the manufacture and distribution of motor vehicle parts when used for repair purposes, removing many, if not most, of the design patent protections on such parts.  The bill states in relevant part:

(A) it shall not be an act of infringement of such design patent to make or offer to sell within the United States, or import into the United States, any article of manufacture that is similar or the same in appearance to the component part that is claimed in such design patent if the purpose of such article of manufacture is for the repair of a motor vehicle so as to restore such vehicle to its appearance as originally manufactured; and

(B) after the expiration of a period of 30 months beginning on the first day on which any such component part is first offered to the public for sale as part of a motor vehicle in any country, it shall not be an act of infringement of such design patent to use or sell within the United States any article of manufacture that is similar or the same in appearance to the component part that is claimed in such design patent if the purpose of such article of manufacture is for the repair of a motor vehicle so as to restore such vehicle to its appearance as originally manufactured.

In short, the PARTS bill exempts from design patent infringement any manufacturing, testing, or importation of parts used to restore motor vehicles (cars, trucks, motorcycles, etc.) to their appearance as originally manufactured.  It also reduces from fourteen years to thirty months the design patent owner's exclusive right to use and sell their patented vehicle components.  These limitations would apply retroactively to any patents applied for or issued on or before the bill's enactment.   

This bill raises serious concerns for U.S. patent owners in general and the automotive industry specifically. Opponents of the PARTS bill rightfully contend that if legislation is passed limiting design patent rights in vehicle repair parts, this will create a slippery slope whereby Congress may eventually restrict patent right in other industries, a concept fundamentally at odds with the U.S. patent system.  The PARTS bill, in canceling existing design patent rights, also can be seen as unfairly penalizing original equipment manufacturers, who have invested time and resources in design innovation.  By stripping car manufacturers and other OEMs of their patent rights, the PARTS bill arguably would enable copycat parts manufacturers to enter the market for replacement parts at virtually no cost, eliminating incentive for innovation. 

A similar bill was introduced in the 111th Congress as H.R. 3059, but never moved beyond the committee stage.

(Source: RatnerPrestia)