Quality Parts Coalition: Fighting for the American Consumer
Challenges ITC decision on independent auto parts

Washington, D.C. – Keystone Automotive Industries, Inc. and six trade associations on behalf of the Quality Parts Coalition (QPC) sent letters and an economic analysis to the United States Trade Representative Office (USTR) urging USTR not to permit a proposed ban on alternative auto parts.

• Open Letter to USTR from Keystone Automotive
• Supporting Economic Data
• Trade Association Letter to USTR

Late last year, an Administrative Law Judge at the International Trade Commission decided a Section 337 case brought by Ford against Keystone Automotive Industries, claiming that Keystone was importing products that infringed upon 14 design patents it held on various component parts of its 2004 Ford F-150 pick-up truck. The ITC ruled in favor of Ford on seven of the 14 parts. Now the presidential review period is coming to a close.

The QPC questions whether design patents which are usually awarded for work by artists and inventors, should be applied to simplistic auto body parts. Additionally, a primary concern for Keystone Automotive Industries, the six trade associations, and the QPC is the effect this case will have on the American consumer. First, if a ban on these parts is allowed, the auto manufacturers will gain a monopoly in the auto body parts market. Competition is vital to the American economy; it fuels performance, innovation and growth. Without competition, auto manufacturers will be able to increase prices, and the consumer will have not alternative choice than to pay higher costs when repairing a damaged automobile.

Second, a monopoly by the auto manufacturers is detrimental to the broader public interest. Ford’s goal is clear, to maximize profits, which will lead to increased costs for the consumers.

Third, if the proposed ITC remedy is adopted, consumers could be denied market choices, hampering service, quality and new innovations in products.

Fourth, American consumers will be harmed by monopoly prices, should the ITC’s recommendation be adopted. Ford and other auto manufacturers will then be able to charge markedly higher prices for these parts by eliminating the competition in cosmetic parts.

Fifth, it would cost the insurance industry approximately $1 billion per year in additional costs for auto body parts. When parts cost the insurers more, the costs will be passed onto the policyholders through higher premiums. Therefore, not only will consumers be paying higher costs for parts, they will then be forced to pay higher premiums for insurance.

Finally, the independent auto parts producers, suppliers, importers and wholesalers will all be hurt. Competition in auto body parts has created numerous jobs. Without competition, jobs will be lost.

For the better public interest, competition in the auto body parts industry is essential. Without competition, big business creates a monopoly, raises prices for the insurers and consumers, and overall, the only winners are the profit hungry, “big three” auto manufactures at the expense of the American consumer.

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The Quality Parts Coalition consists of represents the interests of the independent parts industry, the insurance industry and consumers. 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 protect the consumer’s right to benefit from quality, lower cost alternative replacement parts.