PARTS Act Could Limit Automotive Design Patent Enforceability to 2.5 Years

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On April 23, 2013, H.R. 1663[1] “Promoting Automotive Repair, Trade, and Sales Act of 2013’’ or the ‘‘PARTS Act’’, was referred to the House Judiciary Committee. Similar bill H.R. 3889[2] died in committee last year. The proposed bill is intended to reduce the cost of replacement parts to collision shops by limiting the period of time in which a design patent covering an original equipment automotive part could be enforced. The proposed bill would amend 35 USC § 271(j)(1) to provide:

(j)(1) With respect to a design patent that claims a component part of a motor vehicle as originally manufactured–

(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.

(2)(A) For purposes of this subsection the term ‘component part’

(i) means a component part of the exterior of a motor vehicle only, such as a hood, fender, tail light, side mirror, or quarter panel; and

(ii) does not include an inflatable restraint system or other component part located in the interior of a motor vehicle;

The bill includes language that defines the term “make” to include testing and that defines the term “offer to sell” to include marketing and pre-sale distribution. Thus, a competitor may manufacture, test, offer to sell, and distribute a replacement automotive part at any time, and immediately sell the replacement part on the 2.5 year anniversary of the first sale of the part, so long as the part is only covered by a design patent and not a utility patent.

Section (2)(A) was added to the bill since last year, thereby limiting the scope of the bill to a “component part of the exterior of a motor vehicle only.” However, the scope of this section is unclear. For example, would rims and tires would be covered by the bill?

As an academic matter, this bill sets a poor international precedent as it would provide a blueprint for countries to circumvent international treaty requirements, such as the 15 year design patent term required in the recently signed Patent Law Treaties Implementation Act of 2012 (the Hague Agreement). From a practical perspective, this bill will likely die in committee, since we would expect that OEMs and suppliers with impacted IP rights to oppose the bill.

We will continue to monitor the progress of this bill and report any further developments.

Topics:  Automotive Industry, Design Patent, PARTS Act, Patents, Proposed Legislation

Published In: General Business Updates, Intellectual Property Updates, International Trade Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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