Design Patents and Repair Parts

On Monday, March 22, 2010, the House of Representatives is holding hearings on Design Patents and Automobile Replacement Parts. Even when they offer no technologic advantage, many automobile body parts are protected through design patent. This allows the original manufacturers control over the repair-parts market as well.

On the table is H.R. 3059 which would excuse design patent infringement if the accused article of manufacture "itself constitutes a component part of another article of manufacture" and "sole purpose of the [accused] component part is for the repair of the article of manufacture of which it is a part so as to restore its original appearance.’’

The insurance industry and consumer groups have lobbied in favor of the bill because it would be expected to reduce automobile repair costs — especially for newer model vehicles. Leading design patent attorney Perry Saidman will be testifying against the bill. Saidman writes:

And why are we even discussing a bill that proposes this remarkable result? We are here because the proponents of this bill lost a hard fought design patent infringement lawsuit covering auto repair parts, and can no longer make, use, sell or import their knock-offs in the United States.

So, having been adjudicated as an infringer of validly issued U.S. design patents, these companies are asking Congress to carve out an exception to the design patent laws for auto repair parts. . . .

Why is this such a bad idea? Because it will encourage every industry that loses a design patent lawsuit to petition the congress to do the very same thing: to carve out an exception to their industry so that their infringement will not be actionable, so that they can continue to make, use, sell and import their infringing products without fear of liability to the design patent owner. . . . There is almost no industry whose products or services will not cost less with increased competition. This argument, therefore, is much broader than an argument that design patents should not be permitted for auto repair parts. It's essentially an argument that patents should be abolished, because patents allow the owner to monopolize a product and therefore reduce competition.

Download Saidman's Written Statement R1.031910

39 thoughts on “Design Patents and Repair Parts

  1. how would you guarantee that third party manufactures will not compromise in quality while keeping the price low compared to its competitor.

    How would you guarantee the quality of the OEM parts?

    How would you guarantee the quality of non-infringing custom third-party parts?

    How would you guarantee the quality of the third-party parts after the patent expires?

    What do design patents have to do with quality anyway?

    If quality is important, regulate quality. Have OEMs advertise the superior quality of their parts. Let people decide whether they want to pay for that quality. A “patent” on how pretty something looks is not the tool for regulating quality.

  2. I say that the car spare parts designing should be patent because if it is not so how would you guarantee that third party manufactures will not compromise in quality while keeping the price low compared to its competitor.

  3. “MaxDrei mis-portrays the European split”

    Really? You mean there isn’t a universal patent law aspect in Europe itself? CESM, you sound a bit like Ron K (and look how many times he has to correct the same things Maxie says over and over again).

    You gotta love Maxies windmills though.

  4. MaxDrei mis-portrays the European split – the carmakers lost the battle at European level as the Community Design system contains the same exclusion, and several car-making countries (Italy and Spain for example) have the same kind of measure in place, see
    link to design-law.wikispaces.com

    As several above have said, the issue isn’t whether the car can be registered in a competitive market, but whether the spares can be registered per se – the big deal is that there is little or no freedom to choose in the aftermarket, your spares just have to look like the originals so you’re in a “must copy” situation.

  5. “IANAE, you are missing the point that OEMs depend on design patents to secure the income of those repair parts to recoup investment, the same way drug companies depend on patents to recoup R&D costs.”

    I’m not missing that at all. I get that OEMs make more money when they get a monopoly on replacement parts. I couldn’t say whether this additional money is necessary to recoup their investment in design costs, but I can say with some confidence that they don’t design the parts so they can market and sell attractive replacement parts. They design them as sections of an assembled vehicle, and it’s the assembled vehicle that you see in all the commercials.

    I guess I was hoping for a better argument on behalf of the OEMs than “we would make less money the other way”.

    “Allowing knockoffs by foreign competitors is not the way to help American car manufacturers survive. They are having a hard enough time as it is.”

    They sure are, but it’s not because of this. Look at the chart in the other post. American OEMs are not the ones leading the way in design coverage on their vehicles. They’ve lagged behind Japan in many respects for a long time, and if they can’t keep pace on a business footing we don’t owe them legislative salvation.

    But, as you point out, they’ll probably get it anyway.

  6. Here’s hoping to boldly ungo where other split infinitives have ungone before.

    IANAE, you are missing the point that OEMs depend on design patents to secure the income of those repair parts to recoup investment, the same way drug companies depend on patents to recoup R&D costs. Allowing knockoffs by foreign competitors is not the way to help American car manufacturers survive. They are having a hard enough time as it is. And that is one reson I don’t see this legislation making it though. The US government just loaned US automakers a lot of money. I don’t see them putting out of business with this move.

  7. Oh good, more broken HTML.

    TiA: “I understand that you “don’t like” design patents.”

    You misunderstand. I like them fine, they just don’t fit in so well with a legal framework that is designed for utility patents. Many basic patent concepts are borderline nonsensical when you try to apply them to how pretty something looks.

    broje: “But I agree that if the appearance of the replacemnt part really is essential to or optimal for its function, then it is the optimal functional design or the only only functional design for that part, and the design patent is invalid.”

    Paul: “So how come reportedly only two reexaminations have ever been filed against design patents?”

    I don’t see it as an issue of design patents being invalid. As a part of a new car, the design may well be valid and valuable. Take the Corvette’s iconic tail lights as an example. A “claim” to the entire car is not always adequate protection for someone selling an entire car.

    Also, invalidating individual designs doesn’t address the underlying issue, which is whether people should be able to fix the cars they already bought without paying royalties to the OEM, when really only one particular appearance will do.

    broje: “Custom bumpers, headlamps, and etc. can be just as valid an option.”

    Sure, if you’re replacing all four wheels or both headlamps. Aftermarket wheels are pretty common, and more or less interchangeable between cars that take approximately the same size. Body panels are different. Not everyone wants to drive around in a car with all customized body work just because they got a dent in one fender. People just want to repair their car.

  8. Thanks for the dialogues. Here’s another thought. The auto replacement parts business is so large and lucrative that parts manufacturers ought to be able to afford to file reexaminations against parta design patents they want to avoid, based on prior art published photos of similar parts and a good KSR 103 argument? Design patents are supposed to have the same 103 standards, although you would never guess that. So how come reportedly only two reexaminations have ever been filed against design patents? Especially if reexams no longer go back to that grant-happy art unit? Is is because the original manufacturors have contracts that control all the dies and tooling used by the parts manufacturers? Or?

  9. <> Again, try to keep up.

    IANAE – try be IANAA. When was the last time you were in a court room?

    I understand that you “don’t like” design patents. But you really need to come up with a better analogy than fixing a car and aesthetics as a basis to overturn a well established principle of law.

    From what I read of you, I simply don’t care about your feelings and your snark and neither make a vey compelling position from either a policy or a “what’s wrong with the law” point of view.

    The difference between fixing what you already own and purchasing a replacement part, along with your “I know what the business is” has the opposite effect of that you might think. You are running in reverse and it’s not that people can’t keep up, it’s that you are going in the wrong direction.

    Try this. State a premise of where the law is wrong. One such example intelligently provided has to do with the level of examination. Another may have to do with the exclusion, or intermingling of functionality. Your snark lacks anything other than “I like to talk, but really don’t know what I’m talking about”.

    Let’s look at your “the aesthetic appearance merges with the function to some extent”. OK, now so what? You did buy the car and you do own a piece of equipment that has a certain aesthetic appearance. The actual piece that you own is yours and if you want to discuss the first sale doctrine in regards to your ability to hammer on what you own, then you should do so. Yes, if you have a ding in your fender you are within your rights to have the mechanic at the body shop attempt to restore it. This is quite different than buying something and replacing a part of what you had purchased. Do you not realize that when you purchase something, even a part that goes into something you already own, you are purchasing something different than the first thing that you own? Are you being obtuse in thinking that somehow you have rights extending from the first purchase to any subsequent purchase?

    the contour of the fender has to line up with the other fenderswhy? And what does this have to do with patent law?

    and the surface shape has to restore the symmetry of the carwhy? And what does this have to do with patent law?

    but ordinary people would consider that an objectively inadequate repair job – how does the level of adequacy of repair intersect with the patent right of a design patent?

    The only reason I bring it up is because these are designs we’re talking about, and not “real patents”. . Well, that explains it. With that legal perspective, what can anyone say? I will let you have the last word.

  10. FTR, I disagree with IANAE and Lionel.

    But I agree that if the appearance of the replacemnt part really is essential to or optimal for its function, then it is the optimal functional design or the only only functional design for that part, and the design patent is invalid.

    However, if a new wheel is needed to repair the vehicle, then the customer can choose to buy a replacement at $900, or a new set fo four custom wheels at $1200. I know someone who, faced with this choice, opted for the custom wheels. Custom bumpers, headlamps, and etc. can be just as valid an option.

    Bottom line, the system is not broken and does not need to be fixed.

  11. “My only point was that repair/reconstruction doctrine is not pertinent to replaced components that are patented.”

    I am aware of the limitations of the repair/reconstruction doctrine, and I completely agree with you on that point, but I consider this a good example of why designs shouldn’t be patents.

  12. IANAE,

    I agree with you with respect to the effect that the appearance is part of the functionality of many already purchased products.

    My only point was that repair/reconstruction doctrine is not pertinent to replaced components that are patented.

  13. “Design patents cover articles of manufacture that are generally functional and used for some purpose.”

    Granted, but it’s not like they need to test the structural properties of sheet metal every time they stamp a new shape out of it and paint it blue.

    The nub of the argument for exempting repair parts, which you are free to reject as unconvincing, is that once you own the car the aesthetic appearance merges with the function to some extent. The contour of the fender has to line up with the other fenders, and the surface shape has to restore the symmetry of the car. Granted, you could technically bolt a flat piece of sheet metal on the side of a car and call it repaired, but ordinary people would consider that an objectively inadequate repair job.

    Unless it’s a Volvo, I guess.

    “if the small oft-damaged component is protected by a patent itself, replacing it is a complete replacement of the entire patented article, which is prohibited.”

    The only reason I bring it up is because these are designs we’re talking about, and not “real patents”. If you have to replace a useful component that is itself the subject of a utility patent, by all means pay a premium to the OEM. His utility patent is limited to parts of the article that can be considered functionally useful as well as novel and inventive. Designs can cover almost arbitrary portions of a car. You could theoretically divide the fender up into an imaginary grid and individually patent squares of it, and then arguably go after even the shop guy who hammers out your dent.

    It may strike you as a weird or far-fetched argument, but it’s probably not completely implausible to you that an OEM would try it.

  14. Dennis,

    design patents are only meant to protect ornamental features. If the tested design performs in any way better than other designs, then that design patent is invalid by any standard.

  15. I think the repair/reconstruction discussion is a bit misguided, but if the small oft-damaged component is protected by a patent itself, replacing it is a complete replacement of the entire patented article, which is prohibited.

  16. Lionel – Design patents cover articles of manufacture that are generally functional and used for some purpose. If they were not functional then copyright law would suffice. The fact that a design is tested before use does not render the design patent invalid.

  17. IANAE has it right. If a design patent prevents a person from buying a part that has a mirror-image double, then that design needs to be freely available. There is no realistic alternative design in that case even if there are 100 actual alternative designs.

  18. Dennis,

    “The knock-off market wants to free-ride off of the manufacturers work in designing and testing these parts.”

    If there are utility patents protecting those parts great. However, if any testing was done in developing those parts (other than the marketing kind), then design patents can’t really protect them, now can they?

  19. Much of the problem arises from the lack of examination of design patent applications. I enjoy drafting invalidity opinions for design patents issued for vehicle parts; the references cited by the Examiner typically are not remotely relevant, and the best references are usually (and inexplicably) uncited during prosecution. If parts that receive a design patent were thoroughly examined to ensure that they are novel and non-obvious, much of this issue would be remedied.

    As a side note, I do not completely blame the Patent Office for this problem; currently, the law of design patents is somewhat murky (for example, how does KSR affect design patents?). The test for obviousness in the context of design patents has not received enough attention despite CAFC weighing in with Egyptian Goddess.

  20. “Pounding out a dent in something you already own is so far removed from purchasing a new piece of knock off hardware,”

    Why? The “new piece of knock off hardware” is but a small, oft-damaged component of the much larger whole article I already bought from the patentee for tens of thousands of dollars. It’s a minor and regular repair, and no less so if you happen to have a design patent on exactly the tiny part I need repaired.

    “I would love to see an actual basis in law for anything short of this.”

    “Make an actual legal argument if you want me to keep up.”

    We’re not debating the current state of the law, we’re discussing what’s wrong with the current state of the law and the policy reasons for changing it.

    Again, try to keep up.

  21. Dontcha know? IANAE has ALL the answers. It don’t matter if you have real world experience in that particular market or not. IANAE knows best.

    Listen to him.

  22. So go ahead and talk about having a beer – but do not have one. Likewise, talk about a car part, but if you want to hold one in your hand (or better yet put an actual component in your car), then obey the law.

    We are talking about hardware – if you want a protected part, you need to go to the source. Pounding out a dent in something you already own is so far removed from purchasing a new piece of knock off hardware, I half expected to see 6’s name at the end of the post. If you want a merely functional replacement (assuming a purely design patent protection scheme), you are “free” right now to have one designed that does not infringe a valid right. You are only tied when you want what is rightfully protected. I would love to see an actual basis in law for anything short of this.

    If you want to change the law, then make an argument for changing the law, rather than just cloaking another opinion in a horrible analogy.

    Try to keep up” Try leaving the snark on the shelf and talk something real. Or are you only capable of that when you are talking math?

    Make an actual legal argument if you want me to keep up. I am not interested in your snark.

  23. Oh good, someone other than Malcolm broke the HTML.

    “wrong as I came from that industry. ”

    No, it’s right. Obviously they enjoy getting more money from the sale of replacement parts, but they are in the business of selling cars, and their customers go to them to buy cars. Their customers later go to get their cars repaired, not to have particular car parts replaced with identical-looking parts for the fun of it.

    Riddle me this. If you have a design registration for the outer contour of a fender plus a small circle of surface somewhere on the inside, and I get my fender damaged at exactly that spot, and my mechanic smooths it out, is he recreating the “invention”? Or is he repairing my car?

    “People are not able to freely repair anything wiht or without patents.”

    No, they pay a guy to do it. But that’s not exactly what we’re talking about.

    “Your opinion is just that – an opinion, and has no basis in law.”

    If enough people are of that opinion, it will become law. It’s inching in that direction now, which is precisely why we’re discussing it. Try to keep up.

  24. OEMs don’t design car parts to sell car parts.

    Wrong.

      Flat out

    wrong as I came from that industry.

    People should be able to freely repair any damaged car body panel… with a new part that looks substantially like the original”

    People are not able to freely repair anything wiht or without patents. Your opinion is just that – an opinion, and has no basis in law.

  25. OEMs don’t design car parts to sell car parts. They design car parts to sell whole cars.

    The appearance of a car is an important factor in the buying decision. The importance of a car part is also an important factor in the repair decision, but for a different reason. Your average person who replaces his right fender would probably never buy one that wasn’t a mirror image of his undamaged left fender, and he’s kind of stuck with that decision because he already bought the car and gave the OEM its profit on all that design work.

    I don’t think there’s a reasonable argument that this will lead to a flood of letters-to-Congressmen and the death of design patents (though that surely won’t stop the argument being made). People should be able to freely repair any damaged car body panel (or analogous part of an analogous article) with a new part that looks substantially like the original, rather than being tied to the same parts supplier for the useful life of their car.

    If you get your fender dented and the guy in the shop smooths it out so it looks like the original again, that’s okay, right? What if the OEM has a design patent on only the small dented portion of that fender? Impermissible reconstruction?

    The owner of the car isn’t replacing a fender, he’s repairing a car. That doesn’t change just because the OEM has a patent (and not even the good kind) on a small part of that car.

  26. Paul,

      It is a free ride proposal. 

      They bought the car, and the parts that were original to the car.  The repair/reconstruction doctrine says that they can “repair” the patented car they bought, but not reconstruct it. 

      Same goes for a patented part.  If there is a design patent covering the grille (for example), then the purchaser can repair the grille they purchased.  However, they can not reconstruct it, or buy an unauthorized grille without infringing the patent.  Common sense.

      If a purchaser (or insurer) wants to buy a less expensive alternative, then they should buy a part that does not look like the patented part, or suffer the consequences. If there is a functionality issue (I’m thinking of the CAFC decision in Best Lock), the courts already have the power to invalidate a primarily functional design patent.  

  27. Dennis, this is not an entirely “free ride” proposal. The customer has already paid once for the entire car, including all its ornamental parts, for which those ornamental features do often play a factor in the purchase decision. [But not in replacing a damaged tail light or fender so that it fits and matches the other side of the car.]

  28. I assume the reason the “repair vs reconstruction” doctrine does not apply here is that each such replacement part is independently design patented per se?
    ——————
    I appreciate the argument against opening the floodgates to special exceptions, but I doubt if there is any other business area that comes even close, in design patent economic impact, to the billions of dollars in replacing bumped bumpers and fenders of automobiles, especially if only available from a “sole source” that can charge whatever it wants to.
    [Not even including normally unseen internal parts, which I gather can also be design protected in Europe?]

  29. There are many potential designs for any particular car part. Lots of fender designs, lots of grille designs, lots of rim designs, and lots of headlamp arrangement. As the custom car market has shown, these can all be modified without harming the function of the part or the function of the car as a whole.

    The knock-off market wants to free-ride off of the manufacturers work in designing and testing these parts.

  30. “My guess is however that the replacement part must look exactly like what is patented in order to work, and that this is an inappropriate use of design patents”

    I basically agree with palin (there’s a sentence I never thought i would say).

    However, even where it’s possible to design a part that fits and accomplishes the same functionality, but would be ugly or awkward in the vehicle I would say it should be deemed functional.

    Aesthetic Functionality! There, I said it.

    If the ornamental design is essentially required for anyone to actually purchase the part, then it should be considered functional.

  31. Design patents only protect the ornamentation of an article; they cannot protect the functional aspects of it. Therefore, design patents are inappropriate for replacement parts because they seek to protect the function of those parts, assuming that the replacement part must have the same shape/size in order to be functional. If the infringer could build a replacement part that looks different, but that can fit and function in the automobile, then they could design around the patent. My guess is however that the replacement part must look exactly like what is patented in order to work, and that this is an inappropriate use of design patents. Therefore, no new legislation is needed.

  32. 7, I was being facetious. I well appreciate the importance of pharm patents to the drug industry and to drug development under our current economic model. Nevertheless, if saving the consumers money is of paramount importance to our Congress, then doing away with patents — design patents on replacement parts, utility patents on drugs — will do that. Also, am I the only one who thinks Apple’s products are overpriced? I’m certain the price of Apple’s products would fall if its competitors were free to manufacture competing products having the identical outward appearance if not quite the same performance characteristics. Maybe we should carve out another exemption to benefit the Zune.

    Dennis, have you any idea where the bulk of the replacement parts that the insurance industry would like to remove from design patent protection are/would be manufactured? I suspect not Detroit, although perhaps I am misinformed.

  33. As you might imagine, Europe is divided on this issue. Those countries where the cars are made (Germany, France) want protection for the design of the spare parts for their beautifully sculpted svelte bodies, other European countries, jealous perhaps, do not. The argument in Europe has been running for decades, is finely balanced and is nowhere near resolution. It’s a difficult one. We watch with interest.

  34. TheTwoBobs,

    Without pharm patents, companies wouldn’t spend the hundreds of millions on drug research that they do. Why spend $200mil to bring a new drug to market, so that a chinese company can rip it off the same day?

    There’s a reason that most new drugs come from US companies — the strength of US patents.

  35. If our big-hearted Congress really wants to save consumers some serious money, they should expand this exemption to excuse the infringement of drug patents. However, I suspect that such a change isn’t ever going to be on the table.

Comments are closed.