Automotive Body Parts Association Joins Call to Protect Consumers and Competition

Urges Members of Congress to Co-sponsor H.R. 5638

HOUSTON—April 17, 2008—Members of the Automotive Body Parts Association (ABPA) have joined with national consumer advocates in lauding the introduction of H.R. 5638, known as the repair parts design exemption.

The legislation, introduced and championed by Representative Zoe Lofgren (CA-16), would assure that the American motoring public would still have a choice when it comes to the selection of crash replacement parts in the free marketplace.

The bill, H.R. 5638, will continue 50 years of consumer choice and competition by providing an exception from design patent infringement for alternative repair parts used for the purpose of restoring a vehicle to its original appearance.

The European Union has recently placed its stamp of approval on such a design exemption measure and Australia and New Zealand have had this “spare parts” exemption in force since 2003.

If the bill or a similar one to it does not pass, then Congress is in essence delivering a monopoly on crash replacement parts to the carmakers, a development which would financially burden an already over-taxed driving public.

Carmaker replacement parts are generally 30-40 percent higher than the independently produced counterparts with which they compete.

Today, with the average price of regular passing $3.50 a gallon, Americans are already feeling the pinch at the pump driving up the cost of driving.

Consumers could also soon feel in escalating insurance premiums the sting of a monopoly on crash parts replacement. Even the most minor of fender-benders, without the permanent legislative solution that H.R. 5638 provides, would cost hundreds of dollars more to repair absent the competition in parts selection.

The carmakers are now using design protection to throttle competition. Research shows that the number of design patents awarded to the major automobile manufacturers has grown to about 20 to 25 percent of the total U.S. patents awarded to those manufacturers. In fact, in mid-May of 2007, a ruling by the International Trade Commission (ITC), which named several ABPA members, essentially eliminated consumer choice for seven separate alternative parts for the 2004-2007 Ford F-150 pickup truck.

Ford has already notified the industry that it has applied for design patents on hundreds of additional parts impacting their most popular model vehicles and covering the past four years.

If Congress does not intercede, insurers, the largest purchasers of aftermarket parts, estimate American motorists will shoulder an additional $1 billion in costs by way of increased insurance premiums.

H.R. 5638 brings the U.S. in line with many European countries, Australia and New Zealand which recognize that misuse of design patent laws in the automotive parts and service industry can be counter-productive for the economy.

“This purposeful manipulation by the major auto manufacturers is damning to consumerism and the free marketplace,” said Stanley A. Rodman, ABPA executive director. “The ITC’s decision will trigger more Section 337 cases, resulting in increased direct and indirect costs for consumers and mapping out a path for the eventual destruction of the alternative aftermarket parts industry.”

“We urge members of Congress to co-sponsor H.R. 5638,” continued Rodman. “Because if there is no repair parts exemption, it’s the American consumers who will ultimately bear the price of a marketplace devoid of high-quality, lower-cost replacement collision parts.”

# # #

About ABPA
With more than 150 members, the Automotive Body Parts Association (ABPA) occupies more than 400 separate collision parts distribution, bumper sales, recycling facilities and manufacturing plants. ABPA’s members are responsible for distributing more than 75 percent of independently produced aftermarket crash replacement parts sold to the collision repair trade. For more information about ABPA visit www.autobpa.com.