New House Bill Would Permit After-Market Crash Parts Use

NU Online News Service, June 29, 10:48 a.m. EDT

WASHINGTON–Legislation that would clear the way for the use of auto parts from after-market suppliers for collision repairs was introduced Thursday in the House and Senate.

The measures would create an exception from design patent infringement laws for certain aftermarket component parts used to repair another article of manufacture.

The legislation has strong support in the property and casualty insurance industry, with officials of the Property Casualty Insurers Association of America (PCI) and the American Insurance Association voicing support.

The exception is "critical" for auto parts suppliers' ability to compete against auto companies in the repair parts market, according to PCI officials.

And Melissa Shelk, AIA vice president of federal affairs, said after-market parts competition affords consumers a savings of up to $1.5 billion per year.

"Increasing competition will reduce repair costs to the benefit of consumers' wallets," Ms Shelk said.

She added that research shows the prices of crash parts sold by car companies fall by more than 8 percent when a competitive alternative exists, with the alternative part then priced an additional 26 percent below this reduced car company price.

The Access to Repair Parts Act was introduced as H.R. 3059 in the House by Rep. Zoe Lofgren, and as S. 1368 in the Senate by Sen. Sheldon Whitehouse, D-R.I.

PCI officials said enactment of the bill would be an "important step in eliminating anti-competitive behavior in the auto parts replacement market and in controlling repair and insurance costs for consumers."

According to PCI officials, auto companies have sought for some time to limit or eliminate competition for replacement parts that are most frequently used in repairs after accidents, such as fenders and hoods.

"Despite controlling almost 70 percent of the market for such parts, they have attempted to use design patent laws to achieve a monopoly," according to Bob Passmore, PCI's director of personal lines.

"PCI has actively supported introduction of this legislation to prevent auto companies from bringing patent infringement claims on repair parts," he said.

"As they consider this legislation, we hope lawmakers will carefully weigh the role that competition plays in the auto replacement parts market in terms of controlling repair and insurance costs for consumers," he added.

"It's no secret that consumers are currently facing difficult economic times," Ms. Shelk said. "Let's do what we can to reduce repair costs for America's drivers."