PPAC Nominees: Due by May 30. Three new PPAC members will be appointed by the Secretary of Commerce for a three year term. [LINK]- Design Patents on Automotive Parts: Perhaps the most controversial subject matter for design patents involve automotive parts. Many of the car companies are using design patents to help ensure that body shops use “authorized” parts when repairing a crash-damaged vehicle. Deputy Director Peterlin is looking for input from folks on the issue. [LINK]
- PTO web-site may be down until sometime May 15. www.uspto.gov. (UPDATE: Partially working again)
When one purchases a patented product, He also purchases the right to repair-maintain the purchased item. Where the purchased part per-se is covered by a design or utility patent, the Patent owner could have cause action against the after market parts manufacture ; however the vehicle owner has every right to repair and maintain his vehicle. There is a problem involved when the vehicle manufacture (patent owner) prevents the vehicle owner from a source of repair parts (He already paid the patent owner once).
In theory then the mechanic could make a replacement part as the vehicle owner’s Agent but he could not make a patented part, place it on his shelf (warehouse) awaiting a future purchaser. (But he’s gonna do it anyway no matter what)
‘Just wondering’ – the justification for the patent system in general is promoting the progress of science. If we could get people to develop and disclose stuff without giving them monopolies on it, the justification for a patent system would disappear. Again, laws must be subordinate to their goals – laws (and government) cannot, should not, exist for their own sake. Thankfully for those of us in the IP field, people aren’t quite altruistic enough to give away cash cows for free just yet.
OEM side mirror $299.00, installed.
After-market side mirror $149.95, installed.
What’s the issue here? You want a specific design, you pay for it. Can live with the function embodied in a less cool design, you can save some money. Motorists have a choice, everyone makes money, where’s the conflict?
You want an I-Pod? Go and buy one. Don’t whine on and on about how the other MP3 players don’t look exactly like an I-Pod.
Sheesh, I have never heard of a more boring, dud of an IP issue. It’s hands down the lamest and most sleep-inducing non-issue I’ve heard in my career in IP.
It reminds me of what a client once said about a competitor’s patent: “That’s not fair for them to have that claim. They would have a monopoly!”
Zzzzzzzzzzz.
“Also, as a car restorer, I am a bit concerned about the “chilling effect” (I love that term) that this could have the classic car hobby.”
BTW: I liked your post, I just didn’t like this part of it. Design patents have a term of 14 years from data of issue. Considering that design patents are the quickest patents to be examined, I doubt very much that design patents will have a chilling effect on the classic car hobby.
Although this next, related, point might be better placed in the thread about signals, I’ll keep it here. Too many times I’ve heard people complain about the chilling effects patents. Too many of these people forget that patents, unlike copyrights, don’t last a lifetime +++. Instead, 20 years from filing (plus whatever patent term extension you get) is all there is. For example in 5-10 years, many of NTP’s patents will expire and “RIM v. NTP” will be a footnote in history. From where I’m sitting, too many people lack the perspective of time.
JB, design patents have a term of 14 years, right? Can they have a “chilling effect” (or any effect at all) on classic car restoration?
I think your comment on the scope of a design patent (the entire body vs. the fender, for example) is interesting. I don’t know anything about design patent law, but it seems to me that a design patent for one object (the car) shouldn’t block manufacture of a component (the fender). But if this were so, then I wouldn’t think design patents would be very effective for blocking the replacement parts makers, and thus there wouldn’t be a lobby to abolish design patents for these things. Anyone have any insights?
As someone with experience in the auto industry – I worked at several auto supplier in Metro Detroit before escaping to law school and becoming a patent attorney – I have some experience with the auto parts world.
I know in Europe there is a much higher level of protection for spare parts, and the companies there are terrified of losing that protection, lest millions of Chinese parts (mostly) would flood into Europe in a heartbeat. Here, we already have that.
I know that car bodies as a whole have design patents, the sample illustration shown with this story is a Crossfire. But did DCX file a design patent on each fender? Hood? Cupholder? Radio knob? Fastener? So I have no problem with Chrysler preventing someone from making a full-size Crossfire clone, or even a 1/24 scale model, without permission. But a part of the car, even a hood or fender? Without its own design patent, I’m not sure the protection stretches to cover it.
Maybe the PTO will latch onto this, and design patent filings will rise exponentially.
From a consumer standpoint, I think that allowing parts to be produced by anyone increases competition, which lowers prices. Of course, there are ominous warnings about quality and safety, but we have torts to correct that.
Last time I checked, the well-run car companies were doing just fine – see Toyota, BMW, Honda.
Besides, aside from body panels, can anyone tell one brake rotor from another? If people want “genuine GM parts” then they can request them, if not, they can take a substitute.
Also, as a car restorer, I am a bit concerned about the “chilling effect” (I love that term) that this could have the classic car hobby.
Thanks!
“Loss of protection on parts would simply mean that the business model would have to shift to taking profits on sale, rather than after sale. As I said above, the pertinent question then would be – what is the net economic impact? If the net effect is positive, protection should be dropped, and vice versa.”
I’ve addressed that somewhat above; however, I got another point to make. The US autombile industry isn’t the healthiest in the world these days. As such, changing the law, which will likely lead to more expensive new cars and less cars being built, may not be a good idea for the auto industry.
“design patents cover ornamentation, utility patents cover function; that’s all I was saying”
Exactly, when there is little to distinguish the front fender, the headlamp, the tail light in terms of functionality (i.e., with a utility patent), all that is left is ornamentation (i.e., its looks).
Particularly with car parts that are often repaired (e.g., the body pieces), there usually isn’t anything functionally special that can be protected (and if so, the patent probably expired decades ago). If car manufacturers are forced to make their profits upfront, then new cars will become very expensive. In turn, it will be cheaper to repair (and insure, because insurance is based upon the cost of repair) older cars. This will likely mean that people will hold onto their cars longer and buy less newer cars. In the end, the cost to the consumer probably won’t change much. However, there will be more repair shops and less automotive plants.
By banning design patents on automobile parts, you change part of the business model that many automobile and auto part manufacturers rely on. Just be cognizant that such a change will have an effect. If you think the end effect, as a whole, is positive then support the ban. I’m just here to explain the business model being used.
Mr./Ms. Right — are you saying that the test for whether products should be entitled to design patent protection is whether or not companies would stop “developing” them if they couldn’t get design patent protection on them?
In other words, if companies would continue to “develop” a class/type of products without being able to obtain design patent protection for them, then those products should not be entitled to design patent protection?
‘pds’ – you’re right, you say nothing about the effect on the industry. Apparently, I got wrapped up in the argument and couldn’t keep ‘who was arguing what’ straight in my head. I apologize.
However, that leaves me curious as to relevance, then. You’ve outlined a business model … therefore? That doesn’t actually rebut the section of my post that you originally quoted – which is that design incentives would still exist even if replacement parts weren’t covered. Loss of protection on parts would simply mean that the business model would have to shift to taking profits on sale, rather than after sale. As I said above, the pertinent question then would be – what is the net economic impact? If the net effect is positive, protection should be dropped, and vice versa.
“Leaving that aside, it isn’t really the function of lawyers to give business advice, any more than it is the function of government to support business models.”
This isn’t certainly word-for-word, but I recall reading a comment that clients don’t go to attorneys to find answers to legal issues, clients go to attorneys to get help with solving problems. Unlike certain other legal fields (e.g., crimal law, family law), intellectual property law is business dominated. As such, whatever legal advice you give should also reflect sound business advice.
For example, a client comes to you and says “I have a new invention, I’ve got $200K to spend on legal fees, and I want to patent this invention throughout the world.” A non-business savvy attorney will take the $200K, prepare a patent, file a PCT, and then go national phase everywhere (or at least until the money runs out). In this instance, you’ve done exactly what the client wants, but my guess is that you could have given your client better “counsel” if you took the time to understand the client’s business and had your legal advice reflect solid business advice. In such an example, I would explore the company’s business model with the client, including where the product was sold/manufactured and how many, as well as other places to use the $200K.
Perhaps the product will only be sold in the US and will only require a couple of US patents (and no foreign patent applications) to cover everything patentable and the vast majority of the sales. In such a situation, the remaining money could possibly be better spent on marketing or further R&D. Tell a client that they don’t have to spent all their funds on legal fees, but on something possibly more productive, and you have a client for life. However, you cannot make that advice if you are willingly ignorant about your client’s business and business, in general.
BTW: Unless you are dealing with behemoth clients, most clients want you to be knowledgable about their business and about the business issues they face.
I’m sorry, perhaps my argument was poorly phrased. I’m fully aware of the practice of selling the original unit at or below cost and reaping the profits of additional components. What I’m questioning is whether design patents, specifically, are necessary for this to work and, furthermore, whether it is in the interest of public policy to support this kind of practice.
We will consider the inkjet case, since people keep bringing it up. Are ink cartridges at the point where they can’t be adequately protected by utility patents (consider the implication if the answer is “yes”: cartridge technology has stagnated as a result of the ability to retain monopoly power using only trivial specifics of shape)? What policy objective is served by granting limited monopolies on the shape of the inkjet cartridge? Would companies stop developing inkjet cartridges if they couldn’t get design protection on them? Would companies leave the inkjet business altogether? I highly doubt it. The result of excluding inkjet cartridges from design patent protection is, in my opinion, likely to be purely price-related: the cost of the printer goes up to compensate for the loss of profits in the ink.
As for car parts – again, would companies stop developing new car bodies if no design protection was afforded? As I argue above, the ornamental design of the car has great up-front benefit: getting people to buy the car in the first place. Therefore, I find it unlikely that the loss of design protection on replacement parts would really be as catastrophic as some claim. As in the inkjet case, I find it more likely that the cost of vehicles would go up – but by how much? The tolerable price ceiling on cars is likely inflated right now because the total cost of ownership generally doesn’t factor into the sticker price that people consider. Which brings me to my next point …
One benefit of removing protection on replacement parts is causing companies to compete on price of the original product. Many (most?) consumers do not consider the cost of replacement parts in making their initial purchase – people were shocked, for instance, when they found out the price tag on the regenerative braking assemblies of hybrid vehicles. Further, removing monopolies on replacement parts somewhat separates the market so that vehicle manufacturers and parts manufactuers compete amongst themselves, which allows free market forces to drives prices. Rather than having set prices on replacement parts, parts manufacturers would compete against each other to offer parts at the lowest cost, higher quality, etc. Specialization also generally improves manufacturing capability and lowers costs for the consumer once monopoly pricing is taken out of the picture.
It’s also worth pointing out that we do have a repair doctrine – one that is neatly circumvented by banning the production/importation of patented parts.
‘Just wondering’ – design patents cover ornamentation, utility patents cover function; that’s all I was saying.
Another good article:
link to forio.com
“In this case, however, I’m somewhat skeptical of pds’s claims. I’ll admit up-front that I am not familiar with either the auto industry or the printer industry except through the use of their products.”
Unlike others on this board, when I refer to something as a fact, I got the goods to back me up (the second article refers to car repairs):
link to en.wikipedia.org
link to howtowritebusinessplan.blogspot.com
“it seems to me that the exclusivity of the parts would come from functional features, and not design features.”
The headlight art is both old and crowded, so getting new utilities patents are going to be difficult. Think of it this way, it would be SO MUCH EASIER if car manufacturers had standard-sized plugs, oil filter, air filters, headlights, etc. However, by making different-sized parts (even within the same company), it makes it much more expensive for a knock-off company to tool up for the various sized parts. This provides exclusivity and allows one to raise the price being charged.
“I fail to see how loss of design patent protection would cripple the industry in the fashion that pds alleges.”
Talk about putting words in my mouth. Cripple??? You would be hard pressed to find that word (or anything comparable) in my post. My post was simply to explain the business model that is being employed by the car/part manufacturers.
Counsel is not interchangeable with lawyer. Maybe in a dictionary, but not in fact. In the US a patent agent is counsel, but is not a lawyer.
Leaving that aside, it isn’t really the function of lawyers to give business advice, any more than it is the function of government to support business models.
With printers the standard business model is to sell the printer at a loss and soak the customer on the cartridges, but Kodak announced they would break from that and sell cheap cartridges, so it isn’t written in stone.
As for the car industry, I very much doubt if they operate that way. More likely they are trying to leverage their IP to make up for poor sales, but the flaw in that is that the parts are bought by the same people who buy the cars, and if they can’t afford a new car that doesn’t mean they have more income to spend on parts.
Mr. Right:
A part which is eligible for utility patent protection is automatically not eligible for design patent protection as well?
right asserts “In this case, however, I’m somewhat skeptical of pds’s claims. I’ll admit up-front that I am not familiar with either the auto industry or the printer industry except through the use of their products. However, it seems to me that the exclusivity of the parts would come from functional features, and not design features.”
You need to brush up on your marketing knowledge. Based on my information, it is very common in the printer industry to do as pds asserts. Or, do you think that the joke “We sell each one at a loss, but we make it up in volume” is true? And, it is not just printers. How many cell phone plans include a free cell phone?
The next time you bend your fender, just pry the sheet metal away from your tire. That would be a good, functional fix. Unless you are like everyone else and want your car to look like it originally did, not just functional. Hmmm, maybe people want the ornamental part, not the functional part.
I do agree that “the government does not exist to protect business models.” But with autoparts, there are two businesses: the auto manufacturers and the parts industry. Maintaining the status quo avoids uncertainty as mentioned upthread. That is a good public interest. Making an exception favors a certain business model. Is there evidence of a very compelling public interest that would be served by the exception? I don’t see any. I just see another industry group trying to get the government to aid their business model so they can make more money.
The thing a lot of people seem to forget is the the government does not exist to protect business models; they are not some form of corporate enforcement arm (at least, not in principle; I’m sure many would argue that the US government has already been sold to big business interests, but that’s a political topic that is beyond the scope of this issue).
In short, laws are (supposed to be) designed around public interest in general. The only way the viability of a business model matters is if the destruction of that business model would have a net negative effect on the public interest. In this case, if what pds alleges is true (i.e., the bulk of profits are made in selling proprietary parts), then a change to patent protection would likely result in an increase in price of the original car – if you can’t take profits after the sale, then you obviously must take them at the time of sale. So the question here is whether the net effect to the consumer and the economy as a whole is a positive one or a negative one – and if positive, whether it is positive enough to be worth the potential expense/legal confusion resulting from writing exceptions to the laws.
In this case, however, I’m somewhat skeptical of pds’s claims. I’ll admit up-front that I am not familiar with either the auto industry or the printer industry except through the use of their products. However, it seems to me that the exclusivity of the parts would come from functional features, and not design features. Replacement parts that have (utility) patent protection on functional components don’t need (and can’t receive, in fact) design patent protection. Unless the majority of the revenue is coming from things like replacement hood ornaments, I fail to see how loss of design patent protection would cripple the industry in the fashion that pds alleges. A similar analysis can be applied to the inkjet printer business.
As for the ‘slippery slope’ argument (i.e., fallacy), even if it were valid here, pharma is not a persuasive example. First, they rely on utility, not design, patents for protection (unless they’re patenting the shape of the pills …). Second, this is a case where the cost/benefit of patents is pretty clear and likely uncontestable – given the time and expense of drug production, and the material ease with which known drugs can be copied and mass produced, I think it would be fair to say that pharma actually would not exist without the patent system. This would clearly be detrimental to the public interest – it doesn’t matter how cheap drugs are if there aren’t any new ones being made. This is something that many consumers fail to grasp when they complain about the high cost of prescription medicines.
As for the DMCA, there have been many instances of companies trying to push the Copyright Act and DMCA far beyond their originally intended purposes (see, for instance, MDY Industries, LLC v. Blizzard Entertainment, which is a lawsuit over the popular WoW bot, ‘Glider’). I don’t follow this field that closely, but it appears that the courts have been careful in reigning in the more egregious applications of these laws.
C’mon – where is the Rader dissent handed down yesterday? I h@te me some inequitable conduct!
“I believe Lexmark is an example of a company using the DMC Act to prevent other companies from making replacement ink/toner cartridges.”
As I recall however, Lexmark’s attempt to use the DMCA was completely blown out of the water in court.
“You are doing your client a great disservice if you do not understand their business and how the many different forms of IP can be used to achieve your client’s ultimate business goals.”
Thanks for the lecture. Professor Yoo called and he wants his moral authority back.
“the primary worth of car design is in getting customers to buy the car in the first place. That, in and of itself, should be sufficient incentive to car companies to continue to invest in new car designs.”
Ding ding ding ding ding!!!!!!
****
You need to bone up on business and how many businesses make money. Many car manufacturers barely make a profit (if not a loss) on the sale of the vehicle so that they can get repeat business with the repairs, where they make their real money.
Look at printer makers and toner. The companies basically give their copiers away so that you can spend money on the toner and is why many printer companies go to great lengths to prevent the consumer from using other printer cartridges (I believe Lexmark is an example of a company using the DMC Act to prevent other companies from making replacement ink/toner cartridges).
Classic, classic business model is to sell the device/machine/etc. for cost and make your money on the consumables … you just need to prevent somebody else from selling the consumables. Like any intelligent company, the car manufacturers are using the law, as it is currently written, to protect their profitability in replacement parts as best they can.
Another word for attorney is “counsel” or “counselor,” because you, as a client, counsel your clients. Although this point is lost on some attorneys, clients come to you for business purposes and advice as to how to achieve those business goals, and not a philosophical discussion as to what should and should not be patentable. You are doing your client a great disservice if you do not understand their business and how the many different forms of IP can be used to achieve your client’s ultimate business goals.
FYI: I’m ambivalent about design patents in general.
it is a slippery slope when you start making patent law exceptions — next people will be demanding exceptions for pharmaceuticals, after all patent protection for pharmaceuticals often makes lifesaving medicines unaffordable to many
Genuine replacement parts for cars are over-priced, but anything that makes the part fit is functional and not ornamental, hence either not covered by a design patent or else the design patent improperly protects functional features and is invalid. So, in principle, proprietary parts makers should have no problem.
However, problems start to arise where the replacement parts are visible exterior parts. For those, the only way to design around and still have a market for the part is to come up with something that looks better than the OEM part, which isn’t easy, and if you can’t achieve that, then it must at least look racier or sportier. If not, then no-one will buy it, even though they would buy something that looks like the original part.
The problems don’t end there, though. Cars are symmetrical, i.e. there are an awful lot of things that they have two of, one on the right and one on the left, and if both aren’t the same (or mirror images) then the car looks a total joke. Anyone remember “One piece at a time” by Johnny Cash? “The headlights, they were another sight, it had two on the left and one on the right, but when I pulled out the switch all three of them came on”! If you can’t get pattern parts for those things, or not without having to buy two to get a match when you only need one, then you either pay through the nose at the dealer or you go to the junkyard to get a part from a wreck.
As an owner of a an older car, this is one area where I think the manufacturers rights should be limited. Anyone who thinks differently is probably driving something new(ish) that they are still making payments on (or they are a senior partner, LOL).
“the primary worth of car design is in getting customers to buy the car in the first place. That, in and of itself, should be sufficient incentive to car companies to continue to invest in new car designs.”
Ding ding ding ding ding!!!!!!
“This object d’art over here is a paperweight, designed by Ford motor company – it just so happens that when it reproduced at 250x its size it fits right where your left fender used to be.”
That’s a mighty small paperweight.
Not to reply to my own post, but the more thought I give to it the more it seems that such a rule will be difficult to effectively craft and apply. How would one define an automotive part? This bracket that mounts a CD player to a counter top surface, well it can be installed on a dash board, and therefore no patent should be issued to cover its design. This object d’art over here is a paperweight, designed by Ford motor company – it just so happens that when it reproduced at 250x its size it fits right where your left fender used to be.
I am, as I believe most others are, hesitant to embrace exceptions. Exceptions require that I learn and apply something different than the accepted rule (obviously). Exceptions also inevitably lead to unexpected consequences (is this an “automotive part” for purposes of application of the rule?). Exceptions further create potential pitfalls. Without exception, I would rather accept no exception to what is acceptable design patent subject matter.
“Right is right”, while perhaps logically pure, isn’t helpful in a policy context. There are potentially many things that would be “right”, but aren’t adopted due to practical considerations such as cost, enforcement mechanisms, etc. (protecting the American border is, I think, a good example here).
Again, policy must always be subordinate to its goal. The goal of the patent system is to promote progress of the useful arts. It is not necessarily true that patents accomplish this goal in all cases. To say that “strong patent system = good” oversimplifies the issue. Cost/benefit ratio of the patent system likely varies wildly depending on the industry and circumstance.
In this particular instance, I don’t see the benefit of allowing design patent protection to extend to spare parts. Do you mean to tell me that lack of patent protection on spare parts will significantly deter the design of new car bodies? I would frankly find that hard to believe, as the primary worth of car design is in getting customers to buy the car in the first place. That, in and of itself, should be sufficient incentive to car companies to continue to invest in new car designs.
Remember, patents are government-created monopolies; in no way are they inherent rights of any sort. Thus, public interest considerations absolutely matter – if patents are not serving the public interest, then there is no reason for them to exist.
“what’s right is right”
Well, it’s certainly hard to argue with that. But it seems that you’re suggesting that the “right” to design protection is something more than just a legal right, which could obviously be swept away by legislative action.
What is the source of this right? Natural law? Divine law?
“Deputy Director Peterlin is looking for input from folks on the issue.”
Hey Malcolm, since you’ve said that design patents are worthless, perhaps you can explain to Ms. Peterlin why she’s getting pressure to prohibit a subset of them?
Agree fully with JustAnEx…even though it (would) mean(s) higher parts and insurance prices to me, what’s right is right.
I’ll pay the higher prices.
This business of trying to carve out targeted exemptions to our patent laws is just plain wrong.
No individual or company is any less entitled to their innovations than any others; regardless of the effects on prices.
You don’t like paying? Then don’t use it/them; and come up with your own.
On the automobile design patent protection “issue”, I don’t get it.
The link says: “The automotive industry invests millions of dollars creating unique and distinctive designs for motor vehicles, which can easily be copied. Intellectual property protection is considered an extremely important tool to ensure automakers see a return on their investment”, and it also says “While the automotive industry is interested in strong intellectual property protection for their creative efforts, other industry and consumer groups argue that intellectual property protection of automotive designs in so far as it applies to spare parts is contrary to the public interest. Insurance companies, consumer groups and independent spare parts producers argue that the public interest is best served by eliminating design patent protection of spare parts so as to limit costs associated with the repair of damaged vehicles.”
I frankly don’t understand why the interests of those parties who wish to avoid paying for the use of ingenuity they didn’t create, and in all other circumstances is protected by our intellectual property laws, matters. Isn’t the public interest best served with a strong, rather than weak, IP protection scheme?
I hope nobody waited until the last minute Weds night to file an application on the bar date. I guess the folks at the PTO are too busy working on their CAFC appeal.
After midnight now and everything, from the examiner’s perspective, is still down, as it’s been since late afternoon (5/14)…OACS, eDAN, EAST, webta, even Outlook can’t connect.
Of course this means corps-wide claiming of oh-so-sweet Other Time…can you say catastrophic systems failure OT?
Smells like…victory.
The USPTO website is one of the worst on the internet – poorly organized, ugly, and frequently broken (PAIR, anyway). And the search feature is horrible. It still looks like a website from circa 1996.
Not really. EFS is still down as of 11:07 p.m.
I lost several hours of time to do work. Nobody had any idea what to do nor when the systems would be back up. I eventually made a call to the helpdesk (37 calls ahead of me) and the guy on the end had no idea about anything. He said since the network was down, he couldn’t check his email. God forbid there’s a real emergency and the network goes down.
Yes the whole daggon kit kat and kaboodle was offline intermitently around here.
I wonder if the PTO’s website going to be down (I guess Professor Crouch has an inside track) has anything to do with the FBI raiding the PTO office for evidence to indict Director Dudas and his henchmen/women.
I’m a bit confused. It’s up right now, with no indication of any scheduled outage.
Comments are closed.