WASHINGTON — Nationwide Mutual Insurance Company today joined the Quality Parts Coalition (QPC) to give voice to an expanding effort that would protect American consumers by preventing a car company monopoly on much-needed replacement collision parts.

Dedicated to securing a permanent legislative change to U.S. design patent law, the QPC represents a diverse roster of allies, including the independent parts industry, repairers, insurers, consumers and seniors. Many Americans might be unaware that design patent law plays a critical role in their access to quality, alternative parts (e.g. bumpers, fenders and hoods) for their vehicles. However, with so many consumers tightening their spending to account for economic uncertainty, the spike in the number of design patents held by car companies has major implications for their pocketbooks.

For more than 60 years, the automotive aftermarket has saved consumers an estimated $1.5 billion a year, with quality alternative parts costing at times 26 percent to 50 percent less than those manufactured by the car companies. But since Ford Global Technologies (“Ford”) successfully eliminated competition on seven quality replacement parts for its F-150 at the International Trade Commission (ITC) in 2005, the number of design patents held by the car companies has more than doubled, creating the looming threat of a monopoly. Design patents now account for roughly 20 to 25 percent of the total U.S. patents awarded to those manufacturers.

Following Ford’s case at the ITC, the nation’s more than 2 million Ford F-150 owners were left without alternative options for several replacement collision parts for their 2004-2007 pickups. In this case, where Ford has successfully eliminated alternatives, it has increased some parts’ prices by nearly 60 percent. Where competition still exists on its parts, however, Ford has lowered its prices. In May 2008, Ford filed another complaint at the ITC, this time on collision replacement parts for America’s favorite sports car, the Mustang.

“Now more than ever, consumers are demanding cost-effective, safe, and high quality parts to repair their automobiles after a collision,” said Terry Fortner, Nationwide vice president of material damage claims. “Nationwide is proud to join QPC to advocate for customer choice. Together, we will work to educate lawmakers about the drawbacks of limiting customer choice on collision repair parts and we are committed to advancing this pro-consumer legislation in the 111th Congress.”

In the 110th Congress, Rep. Zoe Lofgren (CA-16) introduced H.R. 5638, a “repair clause” that struck a balance between protecting intellectual property and ensuring free competition by creating a limited design patent exception for collision repair parts. Seven co-sponsors joined Rep. Lofgren in calling on Congress to bring the U.S. in line with a number of nations that ascribe to free competition in the collision repair parts market. QPC members and supporters are dedicated to advancing similar
legislation in the 111th Congress. Without it, the Property Casualty Insurers Association of America (PCI) estimates consumers may shoulder an additional $3 billion in higher insurance premiums.

“All indications are that Ford and others are strategizing to enforce restrictive 14-year design patents on collision repair parts of many other new car makes and models to further monopolize the automotive collision repair parts market,” said Eileen A. Sottile, executive director of the Quality Parts Coalition. “We are thrilled to welcome Nationwide as the newest member in our growing effort to combat these predatory strategies of the car companies and guarantee consumer choice and competition in the automotive collision repair parts market.”

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The Quality Parts Coalition represents the interests of the independent parts industry, repairers, insurers, consumers and seniors. It is the goal of the Quality Parts Coalition to develop and secure a permanent legislative change to U.S. design patent law to preserve competition and to protect the consumer’s right to benefit from quality, lower-cost alternative replacement parts. For more information, visit www.qualitypartscoalition.com.

Nationwide, based in Columbus, Ohio, is one of the largest diversified insurance and financial services organizations in the world. Nationwide ranks 108th on the Fortune 500 list. The company provides a full range of insurance and financial services, including auto, homeowners, life, health, commercial insurance, administrative services, annuities, mutual funds, pensions and long-term savings plans. For more information, visit www.nationwide.com.

Nationwide, the Nationwide frame mark, and On Your Side are federally registered service marks of Nationwide Mutual Insurance Company.