July 24, 2014

Auto Insurer Trade Groups Applaud the Introduction of the "Parts Act" as a Step Towards Greater Competition in the Collision Parts Replacement Industry and Reduced Insurer Costs

In late April, Congressman Darrell Issa (R-CA) and Congresswoman Zoe Lofgren (D-CA) in the House of Representatives, and Senators Orrin Hatch (R-UT) and Sheldon Whitehouse (D-RI) in the Senate, announced that they were introducing the “Promoting Automotive Repair, Trade and Sales (PARTS) Act of 2013” (H.R. 1663). The legislation would amend patent law to reduce the length of a design patent issued on the external automotive parts used in collision repairs (bumpers, headlights, door panels, etc.), from 14 years to 30 months. As such, if enacted, parts manufacturers would be free to copy the design of such parts much sooner, without fear of a claim of patent infringement from the patent holder arising from the design of the part. For this reason, proponents of the legislation claim that it would increase competition in the repair parts market, potentially lowering insurer costs and insurance premiums for insureds.

Not surprisingly, several insurance trade groups voiced their strong support for the bill. The Property Casualty Insurers Association applauded the legislation as “good for consumers, businesses and the U.S. economy,” claiming that “it will encourage greater competition among parts suppliers.” Similarly, a spokesman for the National Association of Mutual Insurance Companies stated that the PARTS Act “provides for a reasonable amount of exclusivity for auto manufacturers while still ensuring reasonable pricing through competition over the long term,” and stated that the Act “would simply ensure consumers will have more choices in the marketplace.” NAMIC has also stated that aftermarket parts can cost up to 50% less than those made by original equipment manufacturers and that, consequently, the use of aftermarket parts (which currently only constitute a small portion of the parts market and would presumably increase if the bill was passed) already saves consumers over $1.5 billion per year. 

Despite the bipartisan introduction of the legislation, its prospects for passage are uncertain at this time. While Senator Hatch announced that he was “hopeful we can get this legislation passed by both the House and Senate and signed into law soon,” similar legislation was introduced in the 112th Congress (H.R. 3889) but failed to advance out of committee. Moreover, at a hearing on H.R. 3889 last year, several Representatives voiced concerns about whether the legislation would reduce manufacturer incentives to innovate and invest in research and development. Those opposing the legislation included Congresswoman Maxine Waters (D-CA), who stated that she just “did not like the idea of investing in a patent, and then all of sudden it is not yours after a short period of time.” 

The new bill, H.R. 1663, has been sent to the House Judiciary Committee for further action.

© Copyright 2014 Dickinson Wright PLLC

About the Author


Jim Burns is Co-Leader of the firm's Antitrust Practice Group.

Mr. Burns has focused his practice on antitrust law for over 25 years. During that time, he has litigated antitrust and related claims in trial and appellate courts all across the country, advised clients on antitrust compliance issues, and represented clients before the DOJ Antitrust Division and the Federal Trade Commission on a wide variety of antitrust matters, including mergers and governmental investigations. While his antitrust practice is broad-based, he has had a particular focus on the representation of...


Boost: AJAX core statistics

Legal Disclaimer

You are responsible for reading, understanding and agreeing to the National Law Review's (NLR’s) and the National Law Forum LLC's  Terms of Use and Privacy Policy before using the National Law Review website. The National Law Review is a free to use, no-log in database of legal and business articles. The content and links on are intended for general information purposes only. Any legal analysis, legislative updates or other content and links should not be construed as legal or professional advice or a substitute for such advice. No attorney-client or confidential relationship is formed by the transmission of information between you and the National Law Review website or any of the law firms, attorneys or other professionals or organizations who include content on the National Law Review website. If you require legal or professional advice, kindly contact an attorney or other suitable professional advisor.  

Some states have laws and ethical rules regarding solicitation and advertisement practices by attorneys and/or other professionals. The National Law Review is not a law firm nor is  intended to be  a referral service for attorneys and/or other professionals. The NLR does not wish, nor does it intend, to solicit the business of anyone or to refer anyone to an attorney or other professional.  NLR does not answer legal questions nor will we refer you to an attorney or other professional if you request such information from us. 

Under certain state laws the following statements may be required on this website and we have included them in order to be in full compliance with these rules. The choice of a lawyer or other professional is an important decision and should not be based solely upon advertisements. Attorney Advertising Notice: Prior results do not guarantee a similar outcome. Statement in compliance with Texas Rules of Professional Conduct. Unless otherwise noted, attorneys are not certified by the Texas Board of Legal Specialization, nor can NLR attest to the accuracy of any notation of Legal Specialization or other Professional Credentials.

The National Law Review - National Law Forum LLC 4700 Gilbert Ave. Suite 47 #230 Western Springs, IL 60558  Telephone  (708) 357-3317 If you would ike to contact us via email please click here.