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DESIGN PATENTS AND 

AUTO REPLACEMENT PARTS 

HEARING 

BEFORE THE

COMMITTEE ON THE JUDICIARY 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED ELEVENTH CONGRESS 

SECOND SESSION 

MARCH 22, 2010 

Serial No. 111–112 

Printed for the use of the Committee on the Judiciary 

( 

Available via the World Wide Web: http://judiciary.house.gov 

(II) 

COMMITTEE ON THE JUDICIARY 

JOHN CONYERS, JR., Michigan, Chairman 

HOWARD L. BERMAN, California 

RICK BOUCHER, Virginia 

JERROLD NADLER, New York 

ROBERT C. ‘‘BOBBY’’ SCOTT, Virginia 

MELVIN L. WATT, North Carolina 

ZOE LOFGREN, California 

SHEILA JACKSON LEE, Texas 

MAXINE WATERS, California 

WILLIAM D. DELAHUNT, Massachusetts 

STEVE COHEN, Tennessee 

HENRY C. ‘‘HANK’’ JOHNSON, JR., 

Georgia 

PEDRO PIERLUISI, Puerto Rico 

MIKE QUIGLEY, Illinois 

JUDY CHU, California 

LUIS V. GUTIERREZ, Illinois 

TAMMY BALDWIN, Wisconsin 

CHARLES A. GONZALEZ, Texas 

ANTHONY D. WEINER, New York 

ADAM B. SCHIFF, California 

LINDA T. SA ́ NCHEZ, California 

DEBBIE WASSERMAN SCHULTZ, Florida 

DANIEL MAFFEI, New York 

[Vacant] 

LAMAR SMITH, Texas 

F. JAMES SENSENBRENNER, JR., 

Wisconsin 

HOWARD COBLE, North Carolina 

ELTON GALLEGLY, California 

BOB GOODLATTE, Virginia 

DANIEL E. LUNGREN, California 

DARRELL E. ISSA, California 

J. RANDY FORBES, Virginia 

STEVE KING, Iowa 

TRENT FRANKS, Arizona 

LOUIE GOHMERT, Texas 

JIM JORDAN, Ohio 

TED POE, Texas 

JASON CHAFFETZ, Utah 

TOM ROONEY, Florida 

GREGG HARPER, Mississippi 

PERRY APELBAUM, Majority Staff Director and Chief Counsel 

SEAN MCLAUGHLIN, Minority Chief of Staff and General Counsel 

(III) 

C O N T E N T S 

MARCH 22, 2010 

Page 

OPENING STATEMENTS 

The Honorable John Conyers, Jr., a Representative in Congress from the 

State of Michigan, and Chairman, Committee on the Judiciary ..................... 1 

The Honorable Lamar Smith, a Representative in Congress from the State 

of Texas, and Ranking Member, Committee on the Judiciary ......................... 3 

The Honorable Maxine Waters, a Representative in Congress from the State 

of California, and Member, Committee on the Judiciary ................................. 4 

The Honorable Darrell E. Issa, a Representative in Congress from the State 

of California, and Member, Committee on the Judiciary ................................. 4 

WITNESSES 

Mr. Jack Gillis, Director of Public Affairs, Consumer Federation of America 

Oral Testimony ..................................................................................................... 6 

Prepared Statement ............................................................................................. 8 

Mr. Robert C. Passmore, Senior Director of Personal Lines, Property Casualty 

Insurers Association of America 

Oral Testimony ..................................................................................................... 17 

Prepared Statement ............................................................................................. 19 

Mr. Damian Porcari, Licensing and Enforcement, Ford Global Technologies, 

LLC 

Oral Testimony ..................................................................................................... 27 

Prepared Statement ............................................................................................. 28 

Mr. Perry Saidman, Saidman Design Law Group 

Oral Testimony ..................................................................................................... 112 

Prepared Statement ............................................................................................. 114 

APPENDIX 

Material Submitted for the Hearing Record .......................................................... 135 

(1) 

DESIGN PATENTS AND 

AUTO REPLACEMENT PARTS 

MONDAY, MARCH 22, 2010 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON THE JUDICIARY, 

Washington, DC. 

The Committee met, pursuant to notice, at 3:38 p.m., in room 

2141, Rayburn House Office Building, the Honorable Zoe Lofgren, 

Chairwoman of the Subcommittee presiding. 

Present: Representatives Scott, Watt, Lofgren, Jackson Lee, Waters, Delahunt, Gonzalez, Smith, Coble, Issa, and Chaffetz. 

Staff Present: (Majority) Eric Garduno, Counsel; Diana Oo, 

Counsel; Christal Sheppard, Counsel; Reuben Goetzl, Staff Assistant; (Minority) Richard Hertling, Counsel; Blaine Merritt, Counsel; 

and Allison Halataei, Counsel. 

Ms. LOFGREN. The Committee will come to order. 

Welcome, everyone, to today’s hearing on ‘‘Design Patents and 

Auto Replacement Parts.’’ 

Chairman Conyers is over with the Speaker and asked for me to 

begin in his absence and expects to be back soon. I understand 

from Mr. Coble that Mr. Smith is also on his way. 

Mr. ISSA. He is here. 

Ms. LOFGREN. Oh, is he? Oh, good. Well, then I will not say that. 

He will offer his statement in due course. 

I would like to thank Chairman Conyers in absentia for scheduling this hearing. Intellectual property exists to create incentives 

for innovation. That is why it is in our Constitution. The Constitution grants monopolies for a limited time over the reproduction of 

creations in order to reward innovators for their risk-taking, creativity, and investment, and because we want to encourage others 

to do the same. These government-created exclusive rights are crucial to the legal framework that promotes innovation in our country. 

However, they come with a cost, and we should not be blind to 

those costs. Any time government creates a monopoly over a particular product, consumers will pay more for that product, and further innovation based upon that product may be restrained. 

Such costs are justified when the exclusive right promotes, in the 

words of the Constitution, ‘‘the progress of science and the useful 

arts.’’ In other words, government should grant intellectual property rights when necessary to spur innovations that would not exist 

without them. 

2 

Today, we are here to discuss one specific type of intellectual 

property: design patents, as applied to replacement exterior car 

parts. I think this, personally, is a textbook case of how the cost 

of government-created monopolies can, in some instances, perhaps 

outweigh the benefits to society. Automakers, understandably, 

make large investments to develop new exterior designs. They do 

so because the design and style of their cars will have a big effect 

on sales. But automakers don’t sell exterior parts through new car 

sales; they also sell replacement parts to repair a vehicle after an 

accident. These are crash parts. 

And in the market for crash parts the automakers face competition from other suppliers. This results in significantly lower prices 

for consumers, both in the direct cost of repairs and the indirect 

costs that affect car insurance premiums. 

Unfortunately, the creative enforcement of design patents may 

threaten this competition. Federal court decisions have cast doubt 

on the application of design patents in this market, but the International Trade Commission has gone the other way in a recent decision, enforcing these patents against some specific crash parts. 

And, as a result, automakers in this case was able to demand licensing agreements and royalties, and of course the costs go up. 

One study found that independently supplied auto parts are already 34 percent to 83 percent less expensive than those sold by 

automakers. If competition is eliminated, these prices could rise 

even further. Without third-party suppliers, effective competition in 

the crash parts market is not possible, and no consumer will ever 

look at the price of replacement exterior parts in deciding whether 

to buy a new car. So the situation invites price gouging of consumers after they have no other option. 

Now, I don’t think these price increases are justifiable because 

automakers, who we value and want to prosper, do not need a monopoly over crash parts as an incentive for design innovations. 

Carmakers have a powerful profit motive to develop new designs 

that attract new car buyers. And this incentive, I believe, is far 

more important than the after market for crash parts, which will 

exist and has always existed even without a monopoly over crash 

parts. 

It is for these reasons that I introduce the ‘‘Access to Repair 

Parts Act’’ to protect competition and consumers by clarifying that 

design patents may not be enforced against crash parts. 

Now, I know that some who oppose this—and, certainly, the 

right to oppose is fundamental—have used words like ‘‘theft’’ and 

‘‘piracy’’ to describe this actually rather modest legislation. But I 

think it is important to recall that not every conceivable application of intellectual property is a natural right. I have great respect 

for genuine innovation, but I think this disingenuous invocation of 

morality to justify what I think are far-fetched monopoly rights 

really does a disservice to legitimate intellectual property rights. 

Now, I look forward to hearing the testimony of the witnesses 

gathered here today. The purpose of a hearing, of course, is to shed 

light on the bills and the issues before us. And if there are witnesses who think I have misunderstood this, I look forward to 

hearing from them. I am someone who is always willing to learn. 

3 

At this point, I would turn to the Ranking Member, Mr. Smith, 

for his opening statement. 

Mr. SMITH. Thank you, Madam Chair. 

Today, we revisit design protection to determine whether the 

Committee should amend existing law to help the after-parts automotive industry. In a 2008 Subcommittee hearing on design law, 

proponents of greater protection argued that current law provides 

insufficient help for innovators who want to prevent the misuse of 

their designs. 

Chapter 16 of the Patent Act allows an inventor to earn a design 

patent for any new, original, and ornamental design for an article 

or manufacturer. However, the chief limitation on the patentability 

of designs is that they must be primarily ornamental in character. 

If a design is dictated by the performance of the article, then it is 

judged primarily functional and ineligible for protection. 

Combined with the high cost of patenting, this reality explains 

why many inventors, including automobile companies, file for relatively few design patents. But auto manufacturers assert that 

automotive supplier lose upwards of $12 billion annually to counterfeit products. And at least one prominent car company invests 

$100 million or more in the design of each new car line. So it is 

understandable why car manufacturers want a higher return on 

their investments. 

Not surprisingly, they have argued in the past that Congress 

should amend the Patent Act or the copyright design statute to 

provide them with greater protection. But the legislative process is 

like Newton’s third law of motion: For every action, there is an 

equal and opposite reaction. Amending either the Copyright or Patent Act invites opposition from others who work in the automobile 

after-parts industry. Their plea has less to do with the nuances of 

intellectual property law and more to do with competition and consumer choice. 

Independent garage owners fear that they will go out of business 

if copyright design laws extended to cover auto replacement parts 

or if the Patent Act is amended to provide more expansive protection to designs. In fact, the after-parts industry now argues that we 

can’t afford to maintain the legislative status quo on patent designs. The auto manufacturers are filing for more and more design 

patents under current law, meaning the independent garages could 

lose a war of attrition. It is just a matter of time and lawsuits. 

That is why Representative Lofgren has introduced H.R. 3059, 

the ‘‘Access to Parts Act.’’ The bill doesn’t prevent automakers from 

patenting designs on replacement parts, but it does prevent them 

from suing competitors who repair cars with cheaper parts. The 

Committee must therefore weigh these competing interests and the 

consequences of establishing the precedent of creating an exemption to design law that benefits the after-parts industry. 

All of us understand the constitutional mandate to protect intellectual property rights so that those who fairly deserve to reap the 

benefits of their creative contributions may do so. At the same 

time, we must also ensure that our legislative efforts do not have 

an adverse impact on economic growth and consumer choice and 

savings. When we allow goods to be taken out of the marketplace 

and assign ownership rights to one individual or company, we 

4 

should examine the fairness of doing so and the impact it will have 

on the market. 

Thank you, Madam Chair. And I will yield back. 

Ms. LOFGREN. Thank you, Mr. Smith. 

And other Members, without objection, will have their opening 

statements included in the record. 

Oh, I am sorry. Ms. Waters actually did request to make a statement, and Mr. Issa has asked for the same. 

So, Ms. Waters, you are recognized. 

Ms. WATERS. Thank you very much, Madam Chairlady. I thank 

Chairman Conyers for organizing this hearing, and I thank you for 

sitting in for him in his absence. 

This hearing today is being held to discuss design patents and 

auto replacement parts. Indeed, this issue is of great importance to 

many of our constituents, as it concerns the maintenance and repair of automobiles. 

I am very anxious to hear from our panel of witnesses regarding 

the impact this legislation would have on consumers in the auto industry. In the weeks leading up to this hearing, I have received 

many letters from leading consumer advocacy groups who believe 

H.R. 3059, the ‘‘Access to Repair Parts Act,’’ would promote competition and consumer choice. 

In these economic times when so many people are struggling to 

find employment, the last thing they should have to contend with 

is costly auto repair bills. The car companies contend that these 

parts are their original design and that this legislation would violate their patent rights. Consequently, over the years, many of 

them have lobbied Congress in an effort to amend Federal copyright law to enable auto manufacturers to obtain protection for 

their designs for individual crash parts through a design registration scheme. 

Moreover, the car companies are also concerned about the quality 

of replacement crash parts. They argue that permitting this intellectual property infringement also exposes consumers to significant 

safety performance or durability risk. 

However, the Consumer Federation of America advocates for 

auto and highway safety will testify today that consumers pay the 

same price for automobile parts that some pay for high-speed computers and flat-screen televisions. So when many across the country rely on their cars for employment, I am concerned that some 

of our car companies may be taking advantage of consumers in its 

strict control over the distribution of its repair parts. 

Therefore, Madam Chairwoman, I look forward to our witnesses’ 

testimony and hope that we can take a closer look at this issue 

that greatly impacts the American public. 

And I yield back the balance of my time. 

Ms. LOFGREN. Thank you, Congresswoman Waters. 

Congressman Issa? 

Mr. ISSA. Thank you, Madam Chair. 

It is always difficult in Congress to be lobbied by two sides and 

tell both sides that you see merit in their position and then chastise them for excess. Today, I believe that is an example. 

The auto companies have repeatedly asked for more than what 

they could be entitled to and come to this Committee asking for 

5 

protection that we are not permitted to grant. Often, the argument 

is that replacement parts are inferior, dangerous and, thus, will in 

some way be unreasonably produced in a way that would endanger 

the public. And, yet, the request is of this Committee, a Committee 

that has no such jurisdiction. We have jurisdiction over monopolies, 

and we certainly have jurisdiction over patent, copyright, and the 

like. 

Having said that, the parts industry, from which I came, would 

certainly pride itself on its design patents and its right to have an 

ornamental look added to the automobile be protected. Whether it 

is an aftermarket sunroof company, spoilers, air dams and the like, 

or even custom wheels, no company in the after market would give 

up its right to its trademark, its copyright, or its patents willingly. 

So that brings me to a conundrum as the owner of 37 patents, 

some of which are design patents. How do we protect the inherent 

right of the manufacturer to have no confusion as to the original 

maker, the quality, and the predictability, while at the same time 

recognizing that there is a huge difference between parts, for example, that would make a Ford Mustang into a Shelby Cobra when, 

in fact, it is not, and simply a repair part for an inner wheel well, 

maybe even a fender that has become rusted or damaged? 

I believe that this Committee lacks the jurisdiction to do it all 

by itself. I certainly believe that the Chairwoman, rightfully so, is 

trying to find the right answer, but I believe that we must carefully 

make sure that this Committee limits itself to the proper meaning 

of this intellectual property over which we have jurisdiction and 

then moves on to the competitive questions with the Committee of 

jurisdiction. 

For that reason, I have not signed on in the past, nor presently, 

on this bill. But I do look forward to trying to get it right now and 

in future legislation. I look forward to the testimony of all of the 

witnesses because I believe there is a valid middle ground. 

Since we are fortunate enough to have the right people here, I 

will again use the example that a Ford Mustang versus something 

that looks like a GT500 Shelby Cobra is not a small set of replacement parts but, in fact, a huge difference. I often go to the auctions 

and watch them also on TV in which the difference in the value 

of a 25-, 30-, 40-year-old automobile based on nuanced differences 

of whether it was a GTO or just another off-the-line car that had 

a few stickers put on it is significant. And those significant differences should be respected when they belong to the manufacturer. 

So, with that, Madam Chair, I look forward to working together 

on finding the right balance, and yield back the balance of my time. 

Ms. LOFGREN. Thank you, Congressman Issa. 

And, without objection, other Members, unless they wish to give 

their opening statement, will be invited to submit them for the 

record. And we will turn now to the witnesses. 

I am pleased to introduce, first, Mr. Jack Gillis. Mr. Gillis is the 

director of public affairs with the Consumer Federation of America. 

He is also the author of several books, including ‘‘The Car Book.’’ 

He received his MBA from the George Washington University. 

Second will be Mr. Damian Porcari, who is director of licensing 

and enforcement for Ford Global Technologies. He oversees enforceVerDate Aug 31 2005 13:03 Nov 01, 2010 Jkt 000000 PO 00000 Frm 00009 Fmt 6633 Sfmt 6601 H:\WORK\FULL\032210\55596.000 HJUD1 PsN: 55596
6 

ment of Ford patents through licensing and litigation. He received 

his law degree from the University of Detroit Law School. 

Third will be Mr. Robert Passmore, the senior director for the 

Property Casualty Insurers Association of America. He specializes 

in automobile claims but has worked on a wide variety of other 

claims issues. He is a member of the Society of Chartered Property 

Casualty Underwriters, having received this designation in 2002. 

And, finally, we will welcome Mr. Perry Saidman, an expert in 

design patent law and principal of a boutique law firm specializing 

in design patents. He has authored many articles on design law, 

and he received his law degree from the George Washington University Law School. 

Without objection, your written statements will be placed into 

the record, and we would ask that you limit your oral remarks to 

5 minutes. 

You will note we have a lighting system. The light will be green. 

When it turns yellow, it means that you have used up 4 minutes, 

and when it turns red, it means your 5 minutes have expired. We 

won’t cut you off mid-sentence, but we do ask that you try and live 

within the 5 minutes so that we will have time for Members to ask 

questions. 

And we will begin with you, Mr. Gillis. Will you please proceed? 

TESTIMONY OF JACK GILLIS, DIRECTOR OF PUBLIC AFFAIRS, 

CONSUMER FEDERATION OF AMERICA 

Mr. GILLIS. Congresswoman Lofgren, Ranking Member Smith, 

Members of the Committee, I am here not only on behalf of the 

Consumer Federation of America but the Advocates for Highway 

and Auto Safety, the Center for Auto Safety, and Public Citizen. 

And we appreciate your invitation to appear today. 

Consider any of the following experiences which happen every 

year to thousands of Americans: You back into a pole, someone in 

front of you stops suddenly, or you sideswipe your car in a cramped 

parking lot. Fortunately, few of these fender-benders result in injuries, but they often result in shocking repair bills. 

Why are these repair bills so high? As Congresswoman Waters 

said, one reason is the parts that are needed to repair our cars. For 

example, Ford charges the same price for a fender as Dell charges 

for a computer and a flat-screen monitor. An unpainted door from 

Ford will cost the same as a Sears refrigerator. And yet, these are 

just part prices; costs can double with installation. 

In fact, computers, refrigerators, and many other products are 

better today than ever before for one reason and one reason only: 

competition. In the early 1990’s, the car companies came to you, 

they came to Congress, and asked for special design copyright protection on these replacement parts, and you emphatically said no. 

But, as you can see from this chart, that hasn’t happened. There 

has been an enormous spike in the number of design patents which 

companies like Toyota and Ford have received on their crash parts. 

Now, unless there is something special about a Ford fender for 

a 2009 Ford which wasn’t true in 2002, then I think you will agree 

with me that this effort is not about some newfound design patents 

but, instead, a newfound business strategy. The question you need 

to ask is, why all of a sudden are these fenders patentable? This 

7 

is a business strategy and not a legitimate use of our very important patent laws. 

What is particularly disturbing about these figures is that they 

are only selectively putting design patents on those parts where 

competition is available. The competition and parts that the car 

companies are trying to kill lowers prices, provides choice, and improves quality. In fact, many independent parts have lifetime warranties and are 34 to 83 percent less expensive than the car company parts. 

If the automobile makers succeed in using design patents to 

eliminate competition for crash parts, it will not only result in 

higher crash repair costs for you and me and everyone else, but it 

will increase our insurance premiums. On the safety side, as Congresswoman Waters indicated, delaying or ignoring the replacement of a headlight, a side mirror, or a brake light simply because 

they are too expensive will cause serious safety problems for the 

consumers. 

One of the most tragic ironies in the lack of competition is what 

I call the automakers’ double whammy. Not only can the car companies charge whatever they want for the parts we need to fix our 

cars, but when they charge so much that the car is totaled, our 

only recourse is to go back to them and buy another one of their 

products. 

I applaud you, Representative Lofgren, for introducing H.R. 

3059. It is not often that Congress is presented with such an elegant solution to a problem. By providing a repair clause in the design patent law, Congress will be providing consumer choice and 

protecting an open and competitive market. Such a very narrow, 

practical exemption to the design patent law would not, and rightly 

should not, interfere with an automaker’s right to prevent competing car companies from using their patented vehicle and part 

designs. 

Nine European countries and Australia have enacted laws that 

specify that making the use of a matching exterior patented part 

is not an act of infringement. American consumers deserve no less. 

So, the Consumer Federation of America, the Advocates for Highway and Auto Safety, the Center for Auto Safety, and Public Citizen believe the consumers need competitive crash parts. On behalf 

of these groups, I strongly urge Congress to adopt Congresswoman 

Lofgren’s bill in order to ensure a competitive market with fairly 

priced alternatives to expensive car company brand parts. 

I would like to thank you for the time before you, and be happy 

to answer questions later on. 

[The prepared statement of Mr. Gillis follows:] 

8 

PREPARED STATEMENT OF JACK GILLIS


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Ms. LOFGREN. Thank you very much, Mr. Gillis. 

We will turn to you, Mr. Passmore, for your testimony. 


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TESTIMONY OF ROBERT C. PASSMORE, SENIOR DIRECTOR OF 

PERSONAL LINES, PROPERTY CASUALTY INSURERS ASSOCIATION OF AMERICA 

Mr. PASSMORE. Congresswoman Lofgren, Ranking Member 

Smith, and other esteemed Members of the Committee, my name 

is Robert Passmore, and I am senior director of personal lines policy with the Property Casualty Insurers Association of America, 

otherwise known as PCI. PCI is comprised of more than 1,000 

member companies, who, together, write 44 percent of the personal 

automobile insurance in the United States. 

I would like to commend you for holding this important hearing 

and thank you for the opportunity to present our views on the impact of design patent enforcement on automotive collision repair 

parts and express our support of H.R. 3059, the ‘‘Access to Repair 

Parts Act.’’ 

At its core, this is a consumer issue. The cost of auto body repair 

are borne by consumers, either reflected in their insurance costs or 

directly when they pay for repairs themselves. Auto manufacturers 

justifiably use design patents to protect the overall design of their 

cars from the other car companies they compete with in the primary market. But some are also using them in unjustifiable ways: 

to keep competitors out of the market for replacement crash parts 

or parts commonly replaced following automobiles accidents, such 

as fenders and doors. 

For decades, the availability of aftermarket crash parts has had 

a moderating effect on the price of such parts sold by the car companies. H.R. 3059 will help ensure that design patents will not be 

used in anticompetitive ways and high-quality aftermarket parts 

will remain available, helping keep auto repair and insurance costs 

down. 

Since 2003, car companies have increasingly filed for design patents protecting not only the overall design of the vehicle but also 

individual component parts of the vehicles they manufacture. One 

company, Ford, has filed two cases at the International Trade Commission against companies in the aftermarket parts industry for allegedly infringing on design patents held by Ford for various exterior parts. Almost 5 years later, those cases were settled, but the 

desired result was achieved for Ford: There was no competition for 

those parts during that time. And, even though cases were settled, 

there is nothing that would prevent Ford or any other car company 

from doing the same thing today. 

We recognize that the overall design of the vehicle represents a 

substantial investment in its development by the manufacturer 

that can and should be protected. While we claim no special expertise in patent law, I would point out that there is no room for innovation by alternative suppliers of these collision repair parts so as 

not to be accused of infringing on the car companies’ design patents. Their only use is to restore the vehicles’ original appearance 

and function; they have no other use. 

In fact, many State laws require that alternatively supplied collision repair parts be of like kind and quality to car company parts. 

The aftermarket manufacturers must meet the requirements of 

those State laws, yet, by doing so, risk being found to have infringed on design patents. 

18 

Design patents, when applied to these parts in the after market, 

serve only to restrict or eliminate the competition and facilitate a 

monopoly on replacement parts. Indeed, nine European companies 

and Australia have addressed the situation by enacting laws similar to what is proposed here in H.R. 3059. Studies have shown that 

the mere existence of a competitive part in the marketplace reduces the price of a car company part by an average of 8 percent 

per part, and that is even before a single part is purchased. 

To put the benefits of availability of these parts in perspective, 

consider that even now car company parts dominate the market for 

auto body repair parts, used more than 70 percent of the time— 

clearly a dominant position. Alternatively, supplied collision parts 

are used about 12 percent of the time and can cost as much as 60 

percent less than a car company part. 

PCI estimates that eliminating the competitive influence of even 

that small market share for alternatively supplied parts would result in more than $3 billion in increased insurance costs on an annual basis. The effect of a monopoly on replacement crash parts 

would not be limited to consumers’ auto insurance costs. Consumers that pay for their own repairs out of pocket would bear 

those costs directly or might choose to forgo repairs, leading to 

more rapid deterioration and depreciation of their vehicle. 

High repair costs also means that there is an increased likelihood of a vehicle being declared a total loss, compelling consumers 

to replace the vehicle, pay off a loan that may exceed the value of 

the vehicle, and seek financing for the purchase of a replacement 

vehicle—all of which deplete savings. In tough economic times like 

we are currently experiencing, the impact of all these factors would 

be much greater on low-income or fixed-income consumers, who can 

least afford it. 

We are not here today to advocate for the use of one type of part 

over another, but we are here in support of a measure that we believe would clearly benefit consumers. That is why we are part of 

the Quality Parts Coalition with companies like LKQ Corporation, 

based in Chicago; AutoZone, based in Nashville; Safelite, based in 

North Carolina; and ABRA, based in Minnesota. Those companies 

believe, as we do, at its core this is a consumer issue. Costs of auto 

body repair are borne by consumers, either reflected in their insurance costs or directly when they pay for repairs themselves. 

We believe that the ‘‘Access to Repair Parts Act’’ will preserve 

competition in the market for replacement crash parts and benefit 

consumers. On behalf of our members, we applaud Representative 

Lofgren and all the bill’s cosponsors for introducing this legislation, 

and we thank the Committee for the opportunity to share our 

views on this issue. 

[The prepared statement of Mr. Passmore follows:] 

19 

PREPARED STATEMENT OF ROBERT C. PASSMORE


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Ms. LOFGREN. Thank you very much, Mr. Passmore. 

Now we will turn to you, Mr. Porcari, for your testimony. 


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TESTIMONY OF DAMIAN PORCARI, LICENSING AND 

ENFORCEMENT, FORD GLOBAL TECHNOLOGIES, LLC 

Mr. PORCARI. Thank you. 

Chairwoman Lofgren, Ranking Member Smith, and Members of 

the Committee, my name is Damian Porcari. I am an attorney with 

the Ford Global Technologies. I am responsible for obtaining Ford’s 

design patents. 

This legislation, if signed into law, would undo wins by Ford in 

the International Trade Commission against foreign manufacturers 

making copycat parts of our popular F-150 trucks. In these instances, the infringers purchased a single genuine Ford part and 

then they used low-cost laser scanners to make photocopy-like 

clones of our parts. And as a result of these infringements, Ford, 

our suppliers, our dealers are losing $400 million a year because 

of the loss in genuine part sales. 

Certainly, a company can save money by copying a design as opposed to creating, testing, marketing, and selling an original design. This is not a revelation. It has been and will always be cheaper to steal something than to pay for it. Our opponents’ argument 

is no more than a justification to deny all intellectual property 

rights across the board. 

Copycat parts hurt Ford, our employees, our suppliers, our dealers, and our customers. Ford customers rarely know that they are 

getting copycat parts because their installation is frequently concealed. Customers purchase a Ford vehicle for many reasons, including its features, its quality, its styling, and its value, but these 

factors are also important in a repair decision. But often, when customers take their cars to a body shop, they frequently receive nonFord, non-U.S., non-UAW parts. 

You know, they may be given an untested part, an experiment, 

that may or may not function as intended. Ford doesn’t test how 

copycat parts work or what interaction various copycat parts have 

with each other. We test Ford vehicles with genuine Ford parts. 

Copycat part makers talk of monopoly pricing by automakers if 

parts can’t be freely copied. Yet, for over 100 years, Ford has 

prided itself on selling vehicles with readily accessible and affordable replacement parts. If pricing of genuine Ford parts made insurance unaffordable, we wouldn’t sell any cars or trucks. 

So, as a November 18, 2009, letter from a broad coalition of IP 

right supporters makes clear, we strongly oppose the fundamentally dishonest practice of purchasing a single Ford part and making cheap copycat parts in low-wage, foreign factories that are sold 

to the American public. 

Technology transformed copying books in the 1970’s, music in the 

1990’s, and movies this century. It is now transforming the car part 

market. Virtual 3D photocopiers are making it faster and cheaper 

to copy parts. That is why you are seeing a significant increase in 

the number of design patents filed in the U.S. It is in response to 

this increased copying of parts. If this bill becomes law, copying 

will continue to increase, and more and more American manufacturing jobs will be lost. Auto companies, suppliers, and dealers will 

have no choice but to compete with cheap Taiwanese copycat parts 

by outsourcing manufacturing to other even lower-cost countries. 

28 

The timing for this bill couldn’t be worse. An International Trade 

Administration report, entitled ‘‘U.S. Automotive Parts Industry 

Annual Assessment 2009,’’ outlines the problems facing the domestic auto parts industry and shows increasing imports of 

aftermarket parts from foreign countries. The Bureau of Labor Statistics reported that the automotive part industry lost more than 

300,000 U.S. jobs since 2000. 

Foreign part copiers say that car companies are unwilling to license copies. This is not true. Car companies vigorously compete 

with each other. We also compete with the salvage and specialty 

equipment makers on component parts. Beyond that, we have existing restoration part licensing programs, where we license our designs, know-how, and brands to responsible companies that make 

high-quality parts. Ford has no objection to generic or specialty repair parts. 

Finally, Ford broke new ground and licensed LKQ to make and 

sell copy parts. We also required that LKQ clearly label copy parts 

as non-original equipment after market. We collect a fee for the use 

of our patents that we reinvest in new vehicle designs. 

This settlement gives Ford customers up to five options when repairing their vehicle. They can: one, buy a new genuine Ford part; 

two, a salvaged genuine Ford part; three, an approved restoration 

part made to Ford specifications; or, four, a generic or specialty 

equipment part that is not a copy, such as parts made by SEMA; 

and, five, an LKQ copycat part that is not made to Ford’s specifications. 

This bill won’t give consumers more choices; they already have 

five. This bill would merely eliminate compensation to the original 

American designer and spur more foreign copying. 

In conclusion, we believe retroactively targeting one group of intellectual property rights for unequal treatment would be a dangerous precedent. And it would be particularly so should it come 

from this Committee, with the role to ensure that these rights are 

protected. 

We thank Congress for taking on the difficult issue of design protection. Thank you, and I would be happy to answer any questions 

the Committee may have. 

[The prepared statement of Mr. Porcari follows:] 

PREPARED STATEMENT OF DAMIAN PORCARI

Chairman Conyers, Ranking Member Smith, and members of the Committee, my 

name is Damian Porcari. I am an attorney with Ford Global Technologies, LLC., a 

wholly owned subsidiary of Ford Motor Company. I am responsible for obtaining 

and enforcing Ford’s design patents, especially those directed to exterior components 

such as fenders, hoods, grilles, lights, and mirrors. 

This legislation, if signed into law, would undo wins by Ford with the International Trade Commission against foreign manufacturers making copycat F-150 

parts. The infringers purchased a single genuine Ford part and used low-cost laser 

scanners to make ‘photocopy-like’ copycat parts. Ford hosted representatives of the 

U.S. Patent and Trademark Office in our design studios and demonstrated how infringers are able to make tooling for a copycat fender in a matter of hours using 

this equipment. Ford, our suppliers and our dealers are losing $400 million per year 

in genuine part sales because of this flood of imported copycat parts. 

I freely admit that a company can save money by copying a design as opposed 

to creating, testing, marketing, and selling an original design. This is not a revelation. It has been and will always be cheaper to steal something than to pay for it. 

This applies to all markets and all products. Our opponent’s argument is no more 

than a justification to deny all intellectual property rights across the board. 

29 

Copycat parts hurt Ford, our employees, our suppliers, our dealers, and our customers. Ford customers rarely know that they are getting copycat parts because 

their use is frequently concealed. Customers purchase a Ford vehicle for many reasons, including its features, quality, styling, and value. They also buy a Ford because of its high domestic content (Monroney sticker) or because it was made by 

UAW workers. These factors are also important in repair decisions. But when this 

same customer takes his or her car to a body shop, they frequently receive non-Ford, 

non-U.S., non-UAW parts, all without any disclosure or warning. They take a Ford 

in for repair and given in return an untested experiment that may or may not function as intended. Ford doesn’t test how copycat parts work or what interaction various copycat parts have with each other. We test Ford vehicles with genuine Ford 

parts. 

Copycat parts makers talk of monopoly pricing by automakers if parts can’t be 

freely copied. Yet there is no evidence for this argument. For over one hundred 

years, Ford has prided itself for selling vehicles with readily accessible and affordable replacement parts. If the pricing of genuine Ford parts made insurance 

unaffordable, we wouldn’t sell any cars or trucks. Everyone purchases insurance before they drive their new car home. This argument is a smokescreen to divert attention away from the fundamentally dishonest practice of purchasing a single Ford 

part and making cheap copycat parts in low-wage foreign factories that are sold to 

an unknowing American public. Technology transformed the copying of books in the 

70’s, music in the 90’s, and movies this century. It is now transforming the car parts 

market. Virtual 3-d photocopiers are making it faster and cheaper to clone parts. 

Ford’s only recourse is to rely on an imperfect form of intellectual property 

protection- design patents- to stop the wholesale cloning of our vehicles. That’s why 

you are seeing a significant increase in the number of design patents filed in the 

U.S. Patent and Trademark Office. It is a response to the increased copying of parts. 

If this bill becomes law, part copying will continue to increase and negatively further erode U.S. manufacturing jobs. Auto companies, suppliers, and dealers will 

compete with cheap Taiwanese copycat parts by outsourcing manufacturing to other 

even lower-cost countries. 

This bill encompasses more then car parts. Any replaceable component would be 

free game for foreign copying including battery packs, printer cartridges, razor 

blades, tires, and golf clubs. All forms of intellectual property are aimed at preventing copies. There is no fundamental reason to treat a fender differently than 

a drug, a purse, or a movie. To do so otherwise is to devalue design. I explain this 

comparison by describing an accident. The vehicle’s fender, brakes, and tires are 

damaged. The driver also breaks her sunglasses, a CD that was playing is 

scratched, some prescription drugs fall on the ground, and a $100 bill blows away. 

Which of these articles should be freely available to foreign copyists and why? What 

fundamental principle supports treating a fender differently? The bill’s proponents 

present no basis for treating visible repair parts differently than other repair parts 

or other items protected by intellectual property. The copyists want to eliminate design patent protection on copycat parts because that’s what they make. As soon as 

their business model includes engines, brakes, and air bags, we will likely hear the 

call for the elimination of patent protection on all types of replacement parts. And 

it won’t stop with cars. The denial of intellectual property rights will always reduce 

copiers’ costs. 

Proponents argue that this bill is needed to restore ‘‘balance’’ between car companies and customers. The phrase: ‘‘It’s my car, I should be able to fix it’’ is used to 

suggest there should be a ‘‘fair use’’ right-to-repair. While the car indeed belongs 

to the owner, the patents protecting it do not. Patents have never needed a ‘‘fair 

use’’ concept because they involve commercial production of products. The patent 

teaches others how to make something. If a patent is unenforceable against foreign 

manufacturers, the American inventor is left with nothing. This entire repair argument is a smoke-screen. Car companies don’t sue customers for pulling a dent from 

their fender. Razor companies don’t sue customers for sharpening a dull blade. Customers have the right to repair their car or sharpen their razor, but they don’t have 

the right to make copy fenders or copy razor blades. Far more importantly, foreign 

companies don’t have the right to sell millions of copycat fenders or razor blades 

into this country. That’s not ‘‘fair use’’, that’s a large-scale foreign commercial enterprise stealing business from the American inventor through unethical copying. And 

that’s exactly what’s happening in the car business today. Dozens of foreign factories, employing thousands of workers are selling billions of dollars of copied car 

parts. Ford is working to stop this practice by enforcing its design patents. Rather 

than restore balance, this bill would upset long standing US intellectual property 

law and would tell the world it’s OK to copy American products - both here and 

abroad. This issue is not one of allowing customers to repair their cars, they already 

30 

have that right. The issue is, can foreign manufacturers freely copy America’s creations? 

The timing for this bill couldn’t be worse. An International Trade Administration 

report entitled ‘‘U.S. Automotive Parts Industry Annual Assessment 2009’’ outlines 

the problems facing the domestic auto parts industry and shows increasing imports 

of aftermarket parts from foreign countries (Attachment 1). The Bureau of Labor 

Statistics (BLS), U.S. Department of Labor, reported that the automotive parts industry lost more than 300,000 US jobs since 2000 (id at p35). 

Some background about the insurance industry will illuminate what’s really spurring foreign parts copiers and unscrupulous insurance companies. Ford provides insurance companies with its genuine Ford replacement part pricing for every new 

Ford vehicle. Insurance companies use genuine Ford part prices to set their insurance rates. After state regulators approve these rates, insurance companies then 

refuse to pay for genuine Ford parts and steer body shops to use cheap copycat 

parts. Most insurance companies don’t tell drivers that they aren’t getting genuine 

Ford parts unless they are required to do so by state law. Consumers rarely know 

they’re getting copycat parts. What consumer prefers a copycat part over a genuine 

Ford part? This entire discussion about consumer choice and right-to-repair is merely a distraction from the basic unethical business practice of pricing insurance premiums using genuine Ford parts and then giving consumers cheap foreign copies. 

Foreign parts copiers also argue the basic ‘‘unfairness’’ of giving car companies 14- 

year protection on replacement parts. Let’s look at some basic fairness issues: Proponents want to retroactively reduce the period of design protection for car parts 

from 14 years to zero. However, Congress recently retroactively extended copyright 

protection for Hollywood movies to 120 years. If this bill becomes law, a real car 

would have no protection against copies, but a cartoon car would be protected for 

120 years. Somehow all of these ‘‘fair use’’ and ‘‘consumer choice’’ arguments don’t 

apply to saving American families money when it comes to movies. 

Foreign parts copiers also suggest that Ford should be able to protect the entire 

vehicle, but not individual components. Ford protects what’s copied. No one is making copy cars. Even Chinese car companies that were accused of copying didn’t copy 

everything. They copied the front of one car and the rear of another. The current 

law allows car companies to protect individual parts and prevents this behavior. 

This bill doesn’t address patentable subject matter under 35 USC 171, but instead 

focuses on what is an infringement. It will add confusion to an already unclear area 

of law. If Ford sells a vehicle having Goodyear tires, are Goodyear’s patents now 

unenforceable? Can foreign companies freely make specialty equipment parts such 

as those on a Saleen Mustang###(tm)###? If a customer resells an automobile with 

specialty wheels, are those specialty wheel patents now unenforceable? If Ford sells 

a vehicle with specialty parts such as a Ford Expedition Funk Master Flex(tm), are 

those patents also unenforceable? 

Proponents for this bill will tell you ‘‘a hood is a hood is a hood’’ and that the 

aftermarket is required to copy Ford parts by state insurance law. First, a hood is 

not a hood. If they were, why would foreign manufacturers be making exact copies 

rather than generic parts that fit Ford cars? Different hoods create a different visual 

impression and result in different sales for that vehicle. We sell different models of 

the same cars with different hoods, grilles, and lights to create a different visual 

impression and to garner more sales. Second, state insurance laws don’t trump federal intellectual property laws. We don’t allow states to create unique forms of intellectual property. And we don’t allow states to invalidate federal intellectual property 

protection or mandate patent infringement. 

Foreign parts copiers say that car companies are unwilling to compete. Not only 

do car companies vigorously compete with each other for each and every sale, we 

also compete with salvage and specialty equipment makers on component parts. Beyond that, each of the Detroit 3 have existing restoration part licensing programs 

where we license our designs, know-how, and brands to responsible companies that 

make high-quality parts. Ford has no objection to generic or specialty repair parts. 

Consumers are familiar with this concept and know what they’re getting when they 

buy generic razors or cereal. Generic items don’t look like the genuine article. 

Ford broke new ground and licensed LKQ to make and sell copycat parts. We did 

this primarily to end a series of very expensive lawsuits and to gain recognition that 

automobile parts were patentable. We also required LKQ to clearly label copycat 

parts as ‘‘Non-Original Equipment Aftermarket’’. Attachment 2 is a sample label 

that is affixed to every copycat part to clearly distinguish them from genuine Ford 

parts. We also collect a fee for the use of our patents that we reinvest in new vehicle 

designs. This settlement gives Ford customers up to five options when repairing 

their vehicle. They can buy: 

31 

1. a new genuine Ford part 

2. a salvaged genuine Ford part 

3. an approved restoration part made to Ford specifications (for older vehicles) 

4. a generic or specialty equipment part that is not a copy (e.g., SEMA(tm)) 

5. an LKQ copycat part not made to Ford specifications 

This bill won’t give consumers more choices. They have five already. This bill 

would merely eliminate compensation to the original American designer and spur 

more foreign copying. 

In conclusion, we believe retroactively targeting one group of intellectual property 

rights for unequal protection would be a dangerous precedent. And it would be particularly so, should it come from the Committee with the role to ensure that these 

rights are protected. We thank the Congress for taking on the difficult issue of design protection. We encourage it to tackle this issue in-depth and see how intellectual property laws can be used to level the playing field with foreign companies 

making copycat parts. 

Thank you and I would be happy to answer any questions that the Committee 

might have. 

32 

Attachment 1 

ITA ANNUAL ASSESSMENT 2009 


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Attachment 2 

Ms. LOFGREN. Thank you, Mr. Porcari. 

And we will turn to our final witness, Mr. Saidman, for 5 minutes. 

TESTIMONY OF PERRY SAIDMAN, 

SAIDMAN DESIGN LAW GROUP 

Mr. SAIDMAN. Thank you very much. 

Chairwoman Lofgren, Ranking Member Smith, other Members of 

the Committee, thank you for inviting me to testify today. My 

name is Perry Saidman. I am an attorney in private practice, and 

I specialize in design patent law. My clients rely on me to get 

strong design protection for their original designs and enforce them 

against knockoffs. 

Now, as a professor at GW Law School, I teach a course in design 

law. I would like to emphasize that a design patent is a very 

unique animal because it protects the appearance of a product, how 

a product looks, not how it works. If you want to protect how it 

works, you have to go get yourself a utility patent, which is not the 

subject of this hearing. 

Now, cutting to the chase, I think it is a bad precedent to carve 

out an exception in the design patent law for a particular class of 

goods—in this case, auto repair parts. The companies who get design patents invest substantial sums in research and development 

of new designs. They file design patent applications in the U.S. 

Patent Office, which are carefully examined by specialist design 

patent examiners who search all previous patents and publications 

to make sure that the applicant’s design is novel, nonobvious, and 

nonfunctional. These are the statutory criteria for getting a design 

patent. And because of this rigorous examination, the issued design 


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patent has a statutory presumption of validity which can only be 

overcome in litigation by clear and convincing evidence. 

Now, the proponents of this carveout for auto repair parts do not 

say that design patents for these parts are invalid. They do not say 

that these design patents are not infringed. Well, they can’t very 

well say that, because their knockoffs look exactly like the patented 

designs. What they are saying is that these valid and infringed design patents should be rendered unenforceable. 

Now, why do they say this? Well, they lost a big design patent 

infringement suit and have been enjoined from selling certain auto 

repair parts. The problem is, if this bill passes, every industry that 

loses a design patent lawsuit will petition the Congress to exempt 

them from having valid and infringed design patents enforced 

against them. That is why it is a bad precedent. 

Now, the proponents also say, if a valid and infringed design patent cannot be enforced against them, we will have open and free 

competition in auto repair parts, which should bring down the cost 

to consumers. But the U.S. Supreme Court has said in the Bonito 

Boats case, and I will quote this, ‘‘The requirements of patentability embody a congressional understanding implicit in the patent 

clause itself that free exploitation of ideas will be the rule to which 

the protection of a Federal patent is the exception,’’ unquote. 

So, once the Patent Office decides that a design meets all of the 

statutory criteria, they issue a patent that gives the owner a timelimited monopoly in that design. This trumps open and free competition and is grounded in the strong public policy stated in the 

U.S. Constitution, article 1, section 8, clause 8, that the purpose of 

patents is to promote the progress of science and the useful arts, 

to encourage innovation, and reward inventors and designers for a 

limited time. 

Now, companies that are in the knockoff business flout this 

strong public policy. Their activities do not promote the progress of 

science and the useful arts. They lie back and wait for others to 

do this, to make a successful unique design. Then they copy the 

patented design, they are found guilty in a court of law, and they 

come here asking that they not be held accountable for their actions. The end game of this logic—that free and open competition 

is the Holy Grail—would result in doing away with patents altogether. 

Now, Mr. Gillis today said that an automaker would still have 

the right to stop competing car companies from using their patented part design. Well, this is a red herring. Companies get design 

patents to stop knockoffs. They are rarely asserted against legitimate competitors, who are busy designing their own original and 

distinctive designs. The last thing they want to put out is a copy 

of a competitor’s design. 

In conclusion, carving out a particular class of products that 

undisputedly infringe design patents just because this is advocated 

by the powerful insurance lobby undermines the rule of law, is tantamount to selective enforcement, and opens the door to yet new 

exemptions advocated by yet new lobbies in yet new product fields. 

Pretty soon, the law fades away, and all that is left are the exceptions, just like the Cheshire Cat in Alice’s Wonderland, which fades 

away, leaving only its devious smile. 

114 

Thank you, and I am happy to answer any questions. 

[The prepared statement of Mr. Saidman follows:] 

PREPARED STATEMENT OF PERRY SAIDMAN


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Ms. LOFGREN. Thank you very much. 

And thanks to all the witnesses for their testimony. 

Now is the time when Members can ask questions of the witnesses. And we will try and confine our questions to about 5 minutes. And I will begin. 

Mr. Gillis, Mr. Porcari gave a list of five choices that consumers 

have for crash parts, including salvage parts, approved restoration 

parts, generic or specialty equipment parts. 


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Why would these choices not be sufficient to provide competition 

in the market to keep prices down for consumers? 

Mr. GILLIS. It is a good question. 

First of all, there really aren’t five choices of parts. Two of the 

part choices that he listed are specious. They do not represent replications of the part, which is what most consumers want. We are 

not attempting to change the look, the feel, or the fenders or the 

hoods or the grills. 

So the only real choice that a consumer has today is an expensive car company brand part; a salvage part, which is of dubious 

quality; and, in some cases that Mr. Porcari talked about, a part 

in which he has licensed the manufacturer of. 

And what is very interesting about that alternative is that Ford 

has entered into a special agreement allowing a company to make 

its part, is getting paid by that company, yet Mr. Porcari just told 

you that these parts are not made to Ford’s specifications. In other 

words, they are licensing someone to make their parts, and even 

they don’t care if they meet their specifications. This is the absolute height of hypocrisy. 

Ms. LOFGREN. I wonder, Mr. Porcari, going to that licensing situation, you have licensed, according to your testimony, with this 

LKQ to make and sell crash parts. And you also testified that Ford 

got a royalty fee out of this arrangement. 

How much was this fee? And how is this structured? 

Mr. PORCARI. The exact amount of the fee is confidential. But I 

am able to tell you that we make much less licensing car parts 

than we do these little toy cars. That is why I brought that here 

to show you. 

Ms. LOFGREN. Was this an exclusive agreement with LKQ? 

Mr. PORCARI. Yes, it was. Yes, it was. 

And, you know, it was not like there was no infringement going 

on. There were 28 companies making thousands and thousands of 

Ford parts. So we didn’t license into a vacuum. We licensed dozens 

of people, making thousands of parts. 

The reason it was exclusive was LKQ brought with them these 

dozens of Taiwanese companies and stopped all of the non-infringers themselves. They had control because they had the 

pursestrings; they were buying from the Taiwanese. 

Ms. LOFGREN. I see. 

You know, one of the things that I think is—I was talking to Mr. 

Smith before he left. It is a hard audience you have up here because I think all of us have cars that have been in crashes. And 

I will just speak—my daughter totaled my car, but the crash was 

such that it didn’t even set off the airbags. I mean, it was—and because the parts were so expensive, the insurance company had to 

total the whole thing. 

And I was thinking about your comment, Mr. Porcari, about, you 

know, low-cost foreign manufacturers. But this was a Prius. 

And so, I think—and I guess this is to Mr. Gillis, since you have 

taken a look at the whole market, not just Ford—aren’t foreign 

auto companies also engaging in these design patents? And 

wouldn’t that potentially have the impact of disadvantaging American parts manufacturers? 

Mr. GILLIS. Well, absolutely, Congresswoman. 

122 

In fact, I would like to submit for the record this picture from 

Auto News, in which 52 percent of the suppliers to the 2008 Ford 

Taurus are foreign companies. 

[The information referred to follows:] 

Mr. GILLIS. In addition, this year, Ford’s latest models, the 22 

models that they are offering the American public, nearly half of 

them are built in foreign countries. 

So, for Mr. Porcari to come here and keep using the word ‘‘foreign’’ as if it is a dirty word is, again, I think, an example of the 


A.eps
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extent that the car companies are trying to go to protect these monopolies. 

And he mentioned earlier that it cost him $400 million because 

of parts that were competitive in the marketplace. Well, guess who 

saved that $400 million? We did. And guess who will pay that $400 

million if he gets to patent all of these parts? And that is what we 

are talking about today. 

Ms. LOFGREN. Thank you very much. 

And I am not going to go on at too much length; I just thought 

it was important to note that, as far as—you know, I don’t want 

to hold myself out as an expert on design patents, but I think the 

most significant case in our courts was the Chrysler case, that the 

circuit court really helped out about the design patents, and it is 

only the international decision that has brought this into play. It 

wasn’t the U.S. court system that brought this into play. 

Isn’t that correct, Mr. Gillis? 

Mr. GILLIS. That is true. And, you know, that is what is particularly ironic about this particular situation. Consumers in Europe 

have a right to these parts. They are able to buy and make choices 

in the marketplace and are able to get the competition they need 

to keep the crash repair down. 

And what is particularly good about it is, when there is competition, not only do prices go down, but quality goes up. And Mr. 

Porcari was talking about quality. I mean, with all due respect to 

the Members of this Committee, to talk about car company quality 

in this environment, when last year 50 percent more cars were recalled than were even sold and this year we have already recalled 

almost twice as many cars as have been sold. So, the car companies 

aren’t—— 

Ms. LOFGREN. I am going to cut you off, because I don’t want to 

set a bad example of going over 5 minutes. 

And I am going to turn now to Mr. Coble for his questions. 

Mr. COBLE. Thank you, Madam Chairman. 

Good to have you all with us. 

Mr. Passmore—and I am going to give Mr. Porcari a chance to 

respond after you respond—as I read Mr. Porcari’s comments, he 

indicates that the auto insurance industry sets the insurance premium prices using Ford parts and then gives the consumers less 

expensive alternative parts and, furthermore, suggests that the insurance companies perhaps don’t inform the consumer when they 

are getting these alternative parts. 

Now, what say you to that? 

And then we will hear from Mr. Porcari. 

Mr. PASSMORE. Well, I would say neither one of those statements 

are true. 

First of all, regarding the question of rates, rates are set based 

on historical loss data. And that is based on whatever has been 

paid for repairs in the past. And I think you heard me say in my 

testimony, the market for replacement parts is currently 70 percent 

car company parts and 13 percent aftermarket parts and 12 percent salvage parts. So that is the kind of marketplace that is being 

reflected in the loss costs that had been paid by insurers up to this 

ponit. 

124 

And, going forward, if you change that market, you know, if that 

70 percent becomes 90 percent, then it is reasonable to assume the 

loss costs are going to increase. And that could impact rates in the 

long run. 

Mr. COBLE. Mr. Porcari, did I interpret you correctly? 

Mr. PORCARI. Yes, you did. 

When a new vehicle is released by Ford, before the vehicle is sold 

we are required to provide to various insurance companies across 

the country the price of the components that go into making that 

vehicle as well as the time it takes to repair the vehicle for certain 

repairs. 

That is the rate; those are the prices that insurance companies 

use to set the policy. 

Mr. PASSMORE. Well, I don’t know if that is—I don’t believe that 

is true. It is true that there wouldn’t be as much loss as for a 

brand-new model of a vehicle, and I guess you would have to have 

a reference point at some point, but it is also true that vehicles 

that have just been—you know, the first year of manufacture, probably don’t have aftermarket options available. 

Perhaps some others could respond to that. 

Mr. COBLE. Well, let me move along before the red light illuminates again. 

Is it not true, gentlemen, that all States permit the use of alternative collision repair parts and that most States have laws ensuring disclosure to the consumer when they are used, along with a 

good number of States that require those parts to be of like kind 

and quality in form, fit, and finish? Is that correct? 

Mr. PASSMORE. That is correct. That is correct. Thirty-nine 

States require that you have to identify the parts being used on the 

estimate. Another 37 States require specific disclosure that 

aftermarket parts have been used; that is after you have already 

listed them. And 31 States require that your disclosure includes 

that the warranty on the non-car-company parts is not provided by 

the car company, it is provided by the company that manufactured 

them. 

Mr. COBLE. Now, Mr. Saidman, I have ignored, not intentionally, 

you and Mr. Gillis. Do either of you want to get your oars into 

these waters? 

Mr. SAIDMAN. No, that is not my—— 

Mr. COBLE. Mr. Gillis? 

Mr. GILLIS. Yes, I think there are more than adequate consumer 

protections in every State. And those protections not only are important for consumers but they foster competition. 

Mr. COBLE. I have no further questions. Thank you, Madam 

Chair. 

Ms. LOFGREN. The gentleman yields back. We will turn to Mr. 

Gonzalez, who has been sitting here from the beginning, before Ms. 

Jackson Lee. 

Mr. GONZALEZ. Thank you very much, Madam Chair. 

Just real quick, Mr. Saidman, in your written testimony, you 

read it, ‘‘A design patent protects only the outward appearance of 

a product as shown in the figures of design and so on. Unlike a 

utility patent, a design patent does not protect the function or 

structure of the product, only how it looks.’’ 

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Mr. SAIDMAN. Correct. 

Mr. GONZALEZ. Okay. And the courts seem to be agreeing with 

you. And, yet, we know that Mr. Gillis in, not his testimony, but 

in his response said, the objective of having the alternatives is replication, is appearance. Right? 

Mr. SAIDMAN. Exactly. 

Mr. GONZALEZ. Okay. So now that is where Congress comes in. 

Because the courts are basically saying, if you want to do something about it, go to Congress. And we are here today. So, as Members of Congress, we can actually take a lot of things into consideration if we are going to modify a law that the courts now would 

be operating under. 

You said there is a public policy consideration as to this design 

patent. In this particular instance, identify the public policy consideration. I mean, why would we have the law? I mean, there has 

to be a public policy consideration in everything that we do. 

Mr. SAIDMAN. Well, the public policy is expressed in the Constitution, to promote progress of the science, to promote the useful 

arts, to reward innovators, to encourage research and development, 

and to produce new and original designs. And the deal that is made 

with the designers is that we will give you a monopoly for a limited 

period of time in exchange for your efforts and your investment and 

your original designs. And the public policy is simply to adhere to 

that. 

Mr. GONZALEZ. Congress would have to believe that we are not 

frustrating that public policy by making some sort of a carveout or 

exception in this case. Is that correct? 

Mr. SAIDMAN. Yes. 

Mr. GONZALEZ. Okay. But I think everyone really looks through 

that argument and doesn’t really see that it is quite valid. All they 

know is that it is probably cornering the market. It is about having 

a monopoly on replacement parts. 

I mean, is that what really is going on? Because I think many 

Members just look at it—I think Mr. Issa kind of alluded to it— 

and I am not speaking for him, because he could have meant something totally different. But, you know, you guys are competitors. 

And right now someone has a corner on the market. And what is 

the impact? What is the public policy impact? The impact is, the 

consumer pays a lot more money. I don’t think that is really in dispute. 

Now, Mr. Porcari, you may dispute that. I still remember we 

used to say, if you sell me a car for 40,000 bucks, you are selling 

me the whole package and you are putting it together for me. But 

if I ask that you sell it to me piece by piece, I would probably have 

a quarter-of-a-million-dollar car. 

I don’t know if you agree with that, but what I am trying to point 

out is just what is practical out there, what is really going on in 

American society. And the utility of law really should reflect what 

is going on out there in American society and how the best interests of that society are served. 

I happen to think that if something costs a consumer an inordinate amount of money, unnecessary. And I don’t think that—I 

know what you said, Mr. Porcari. I think you said, if it was so unreasonably priced, it would not be affordable. Maybe something 

126 

doesn’t have to be unaffordable before it is unnecessarily expensive. 

And that is not good for our economy. 

So if you would like to respond to what I think. The public is 

having this conversation as we speak, if, in fact, they are watching 

or if they are interested in the subject matter. 

Mr. PORCARI. Well, one, we are very proud of our cars and our 

affordable replacement costs. 

I will give you the example that Mr. Gillis used, and that is a 

Dell laptop or a Dell computer. I have a Dell laptop, a Dell Latitude D630, and I looked up the replacement part cost of that 

screen. If I were to break my LCD screen, it would cost $245 to get 

a replacement screen. 

I also have a 2010 Ford SHO Taurus—a great car, made in Chicago, the newer version of the one Mr. Gillis showed you. If I were 

to dent my fender, that fender has a replacement part cost, manufacturer’s retail price, of $303. But I found it on sale on the Internet—two clicks on Google, anyone could find it—for $216.47, less 

than the replacement cost of that Dell laptop screen. 

I don’t think our parts are overpriced. I think they are affordable, and that is why people buy Ford cars. 

Mr. GONZALEZ. Mr. Gillis, I probably have 30 seconds left. 

Mr. GILLIS. Okay. Yeah, first of all, it is ridiculous that Mr. Porcari would have to pay $230 for a flat screen for his Dell, but 

the reason why he has to is because he can only get that from Dell. 

And that is our point. 

Mr. Saidman admitted that these designs were not to protect the 

car companies from each other, but, in his words, to stop competition. And that is what we are talking about. I am not a patent attorney, but I just heard him say, ‘‘We are not worried about car 

companies copying each other; we are worried about stopping the 

competition.’’ 

And, from the consumer perspective, we are worried about keeping competition opening. Seventy-three percent of the car parts out 

there have no competition right now. 

Mr. GONZALEZ. Thank you very much. 

Ms. LOFGREN. Thank you. 

We will turn now to Congressman Issa. 

Mr. ISSA. Thank you, Madam Chair. 

Mr. Gillis, you made a statement that I just want to make sure 

we correct for the record. You cited the amount of recalls. If you 

are not aware—hopefully after the Toyota hearings, you would be 

aware—that if you copy perfectly cars subject to recall, you will get 

recallable parts. 

So, unless you are implying that these companies have vast engineering that somehow would make them better than the original 

parts and less likely for a recall, maybe that wasn’t the best citing. 

Mr. GILLIS. Well, actually, Congressman, it is not a bad idea, because these parts also can be recalled by the U.S. Department of 

Transportation, the same way car company—— 

Mr. ISSA. Well, I appreciate that. But if they copied the foot 

pedal that was a little too long on a Toyota, they would end up hitting the carpet just the same. 

You know, I spent 20 years designing and producing for the auto 

aftermarket. Nobody could be more interested in not allowing a moVerDate Aug 31 2005 13:03 Nov 01, 2010 Jkt 000000 PO 00000 Frm 00130 Fmt 6633 Sfmt 6601 H:\WORK\FULL\032210\55596.000 HJUD1 PsN: 55596
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nopoly of the car companies. I was a participant and a contributor 

to the unsuccessful Chrysler case in which we tried to define and 

thought we were accurate that, inside a car dealership, the car 

company is a monopoly. And so, when you want to sell an 

aftermarket radio or an aftermarket car alarm, in the case of my 

company, that the prohibition by the manufacturer and the insistence on only their parts was, in fact, an antitrust violation. No 

question at all, I would be there for you relative to the aftermarket. 

In this case, I have a different concern. And maybe I can use Mr. 

Porcari as my stalking horse for this. If your interest is related to 

your creation of an art form or a design—as, by definition, when 

you go to the Patent Office, you say it is—then isn’t it fair to say 

that the question of the quality of a replacement part, the durability, all of that, is actually not within the purview of this Committee? So would you mind if we only address the portion that is 

related to the rights in a design patent? 

Mr. PORCARI. Congressman Smith, you are correct that—— 

Mr. ISSA. Thank you, but I am a little less than Congressman 

Smith. I am Issa. But that is all right. 

Mr. PORCARI. Oh, I am sorry. Congressman Issa, I am sorry. I 

apologize. 

You are correct when it comes to enforceability of design patent. 

But by losing our ability to enforce the patent, we are also losing 

our ability to control who is making copy of our—— 

Mr. ISSA. And I want to go to that immediately, because I want 

to try to address both, if I can, quickly. 

Currently, you get design patents for 14 years, 10 years minimum under TRIPS, in the U.S., right? Ten years is a very long 

time in the cycle of an automobile, isn’t it? Basically, at the end 

of 10 years, you are not interested in making the parts anymore. 

Wouldn’t that be true? 

Mr. PORCARI. We are required by law to make the parts for 10 

years, but yes. 

Mr. ISSA. Yeah, it gets a little tough. You end up in the salvage 

yard. I have a lot of historical automobiles, and, trust me, I know 

I can get certain parts for the Model T, but they are pretty limited. 

So, let’s go through this. If we were to protect your original design, not based on the historic design patent, but to create a category much more similar to the way the French protect dress designs based on fashion, and we were to give you a lesser time, but, 

in fact, that lesser time was shorter than the cycle of the automobile but long enough for the original first use of what some people might call trade dress, even that goes on in perpetuity, but to 

that part. So we give you a patent on the whole car for, let’s say, 

3 years from the origination. 

If you absolutely had that, would you be more satisfied that you 

had that? And, if not, why not? 

Mr. PORCARI. Enforcing a design patent is very expensive—millions of dollars. And we have a very good track record—we have 

sued three times, not two—but even we are at about a 50 percent 

track record. But—— 

Mr. ISSA. Okay. But then let me make a follow-up if the ‘‘if not, 

why not’’ appears to be you are not interested. If, on the other 

hand, we said to Ford, GM, Chrysler, Toyota, and the rest, look, 

128 

in this country we are perfectly willing to allow you to get your royalties, but those royalties cannot be unreasonably withheld, let’s 

say, by everyone who has ISO 9,000, meets the basic criteria for, 

quote, ‘‘quality,’’ a compulsory license that you could not have a 

monopoly, but you could, like the copyright holders in most cases, 

you could be guaranteed income but not guaranteed a monopoly, 

would you be interested in that? 

Mr. PORCARI. We would study it, specifically if it included the 

elimination of these enforcement issues. 

Mr. ISSA. Thank you, Madam Chair. I just regret that there is 

but so little time to ask. 

Ms. LOFGREN. Thank you, Mr. Issa. 

Ms. Jackson Lee is not present at the moment, so we will go to 

Mr. Chaffetz and then to Ms. Jackson Lee. 

Mr. CHAFFETZ. Thank you, Madam Chair. 

I would like to, just so he can finish this, yield my time to Mr. 

Issa. 

Ms. LOFGREN. Of course. 

Mr. ISSA. So you were saying, though, that the idea of a compulsory license with provisions that would give you the reasonable 

control over your license, would that be of interest to you? You said 

there were other factors. Briefly, can you tell Mr. Chaffetz those? 

Mr. PORCARI. Yes, certainly. 

Our parts frequently include contribution by suppliers. I cannot 

give away what I do not own. So, for example, in a headlight, there 

are dozens, if not hundreds, of patents owned by the supplier on 

that headlight. I merely create the original appearance, the ornamental appearance of the headlight. How it is made, how it works 

are not mine to give. 

Mr. ISSA. Certainly. So we recognize that utility patents underlying would not be included, and therefore they would have to get 

those utility rights or they couldn’t do the, if you will, design. 

Mr. Gillis, are you intrigued by that at all? 

And I want to yield back to the gentleman. 

Mr. GILLIS. Yes, I am intrigued by that. And the question becomes, will the car companies offer these in the open market at fair 

and reasonable prices? 

Mr. ISSA. Certainly, a licensee would offer them in the open market. 

Mr. GILLIS. If I understand, what you are saying is that the car 

companies would be given the patent rights; however, they would 

have to share licenses to manufacture those—— 

Mr. ISSA. Right. Everyone up here on the dais recognizes that, 

let’s say in the music business, that there is a compulsory license. 

If I want to perform ‘‘I’ve Got You, Babe,’’ for which I would be paid 

very little and booed, I have—— 

Mr. GILLIS. I would pay to see you sing. 

Mr. ISSA. Thank you. Many might. But I have to pay. And yet, 

I have a right—there is a compulsory license in which I have a 

right to get that. That situation exists in other law. It also exists 

in some transition in the patent rights in health care. So it is not 

without precedent in U.S. law. It would not be totally new. 

But I think, for all of us on the dais who have seen both requests 

by the manufacturers to have totally exclusive rights, which you 

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obviously object to, and then the idea that they have no rights or 

that immediately the product be available, and without control over 

quality, although we have a limited role in that control over quality 

and so on, the fact is that confusion as to source and quality and 

the harm to the Ford emblem as to quality is, in fact, within the 

purview of this Committee. 

And that is why I asked if we could begin, notwithstanding the 

gentlelady’s starting point, talking in terms of a solution, rather 

than simply two problems that come back to this Committee perennially. 

Mr. GILLIS. Well, first of all, again, I have to disclose that I am 

not a patent attorney. However, there is some question as to 

whether or not design patents should even have been issued to 

these particular parts, because they are, in many cases, functional 

parts of the car. A fender performs a number of functions. So that 

is one issue that would have to be addressed. 

If, in fact, there was consensus that these are legitimately earned 

and important design patents, then your solution, as long as it 

opened the market to consumers so that we would have many 

choices at fair prices, sounds reasonable. But I think first you 

would have to address the issue of whether or not the patents are, 

in effect, appropriate in the beginning. 

Mr. ISSA. Certainly. 

Other comments, particularly—I mean, I think from the dais, we 

are not prepared to strike down design patents without recognizing 

that it goes far beyond the auto company right now, with similar— 

that the Dell notebook has a design patent on it, too. 

Please, anyone else that would comment on this direction? 

Mr. PORCARI. Sure. A couple of comments. Perry can tell you all 

about the history of design patent law, but, for example, on 

functionality versus ornamentality, we make, I believe, 12 different 

grills that fit an F-150, each looking completely different than the 

other to distinguish our series. It, by definition, says that these are 

not functional grills. There are many, many ways to make a grill. 

And that is not enough. The public can probably buy 40 to 50 

aftermarket grills for that F-150. 

So I think, from a functionality argument, we clearly proved in 

court that these patents are not functional, that they are ornamental. 

Mr. SAIDMAN. That is, in fact, the test for ornamentality. If the 

design can be embodied in any of a number of different ways and 

perform the same function, then it is not dictated by function and 

is, therefore, ornamental and meets the statutory requirement. 

Mr. CHAFFETZ. Thank you, Madam Chair. I see our time is within seconds, so we will come in under, and yield back. 

Ms. LOFGREN. All right. The gentleman yields back. 

We turn now to the gentlelady from Texas, Congresswoman 

Jackson Lee. 

Ms. JACKSON LEE. Thank you very much, Madam Chair. 

And I thank the witnesses for their presence here today. 

I am just going to start with Mr. Porcari. 

What is the body of law that you are basing your argument on, 

as you represent the auto manufacturers? Expanding beyond patent, but do you have case law that discerns between the automobile 

130 

design, which means if you come out with a flying Thunderbird 

that really flies and you want no one to know about that—and I 

would get that real quick. 

Mr. PORCARI. You haven’t seen our new Ford SHO Taurus. It 

flies. 

Ms. JACKSON LEE. Does it really? 

Mr. PORCARI. But—— 

Ms. JACKSON LEE. Excuse us for a little engagement. I want you 

to know that your Ford Taurus station wagon took my children 

around. We had a good time in it. 

Mr. PORCARI. Good. 

Ms. JACKSON LEE. But let me—what is the body of law beyond 

patent law for the grills and extra? 

Mr. PORCARI. There is, in trademark law—I am not a trademark 

expert, trade dress—but, within patents, there are three types of 

patents. There are utility patents that cover the functional aspects 

of an article. There are design patents that address its ornamental 

appearance. And then there are plant patents, which are quite 

similar to design patents; they are directed to the appearance of an 

asexually reproducing plant. 

So we, Ford, did not utilize trade dress or trademark arguments. 

We focused exclusively on design patents. We actually didn’t even 

bring in utility patents, because we really wanted to clarify the 

issue and bring it into sharp focus that car parts are protectable 

by design patents. 

Ms. JACKSON LEE. Give me the last one. You had utility, ornamental, and what is the third one? 

Mr. PORCARI. Plants. 

Ms. JACKSON LEE. So you focus mostly on the actual design and 

consider the grill and other parts part of that design. 

Mr. PORCARI. Right. 

Ms. JACKSON LEE. Is there a case law that has recently gone 

through the courts that has reinforced your position? 

Mr. PORCARI. There are—and Perry is much better at giving you 

case law citations. 

Ms. JACKSON LEE. Well, I am going to yield to him in a moment 

before I go to Mr. Gillis there. 

Mr. PORCARI. Our cases—we had three cases in the ITC; one 

went to decision. In that case, the ITC judge found that the designs 

were valid and infringed. 

I have heard reference to the Chrysler Auto Body case, a Sixth 

Circuit case I believe, years back, on a summary judgment, found 

that the Chrysler Dakota fender was functional. That never went 

to trial; it was done on a summary judgment. And we think the 

court got it wrong. 

Ms. JACKSON LEE. Could I ask your team to provide this Committee with an update on case law, whether it is administrative decisions and/or case law, that you have relied upon? 

Mr. PORCARI. Yes. 

Ms. JACKSON LEE. I would appreciate that. 

Mr. Saidman, would you answer the same question but, in addition to that, act as a—as this is a tutorial, very briefly, and tell me 

whether or not competitive issues are taken into consideration on 

the design cases under patent law. Are they basically strictly on 

131 

the idea that someone proves that it is unique to them and then 

a decision is then made? 

Mr. SAIDMAN. Well, design patents are part of the 35 United 

States Code. It is a distinctly different kind of patent than a utility 

patent. Design patent protects only the look of a product, how it 

looks, not how it works. And the statutory criteria are that it must 

be novel, it must be non-obvious to a designer of ordinary skill in 

that field, and it must be nonfunctional or ornamental, same thing. 

It is nonfunctional when there are other designs that can embody 

the same function. 

So when those statutory criteria are met, the design patent is 

issued. And the owner has a 14-year period of exclusivity in that 

particular design. 

Ms. JACKSON LEE. So how would you solve a problem that consumers raise, that the cost is higher, that when they go to their 

local car fix-it shop or their distributor shop—I guess there is a lot 

of do-it-yourself going on right now—and the distributors can’t get 

it and the consumer can’t get it? How do you respond to that? 

Mr. SAIDMAN. Well, I think—— 

Ms. JACKSON LEE. Couldn’t a distributor buy it from the manufacturer? 

Mr. SAIDMAN. The distributor gets it from the manufacturer and 

resells it, I understand, to the end seller. 

Ms. JACKSON LEE. Right. 

Mr. SAIDMAN. But I am not sure exactly how the chain of distribution works. 

Ms. JACKSON LEE. Then let’s—and I know that. But I am trying 

to get to how the distributor can, in fact, be made whole by getting 

this in a manner that allows them to lower the cost for the consumer. 

Mr. SAIDMAN. Well, you know, part of—the fact of the matter is 

that the patent system creates the ability of the patent owner to 

control the price within a certain range. They can’t flout what the 

market says, they can’t price their goods outrageously, but the way 

the patent system works is that the patent owners have the ability 

to exclude others from making, using, or selling the patented item. 

That is the way it works across all industries. That is the way 

it works in pharmaceuticals. You don’t have the generic-drug makers coming to Congress and saying, ‘‘We want to make generic 

drugs before the patents on these drugs expire.’’ They sit, they 

wait, the patents expire, and then they jump into the market, and 

you have the increased competition. 

Mr. ISSA. If the gentlelady could yield? 

Ms. JACKSON LEE. I will yield if the Chairwoman would indulge 

us in additional time. 

Mr. ISSA. I have to ask unanimous consent for an additional 

minute. 

Ms. LOFGREN. Without objection. 

Ms. JACKSON LEE. And I have a question for Mr. Gillis, so I will 

yield to you for a moment. 

Mr. ISSA. I would only point out that, yes, the generics are in 

here asking for early rights all the time. 

Ms. JACKSON LEE. I was going to say that, as well. 

Ms. LOFGREN. And the gentleman yields back. 

132 

Ms. JACKSON LEE. That is not his fault for not being keen on 

what generics are doing in pharmaceuticals. 

But let me just quickly ask—Mr. Gillis, I went to the gentleman 

first so that you could have an opportunity to respond, if you will. 

One of the questions, as you respond—because you know my line 

of reasoning was the impact on consumers—respond to the concern 

about safety. Maybe it is someone putting on a grill incorrectly, impacting on Ford or someone else negatively when that grill falls off. 

So why don’t you respond to safety and the competition issue? 

Mr. GILLIS. Thank you very much, Congresswoman. 

There are two safety issues. First and foremost is the fact that 

many consumers who can’t afford these overpriced parts may not 

replace a mirror, they may not replace certain parts of the car that 

are important for the safe operation of that vehicle simply because 

they can’t afford to. So that is the number-one problem. 

The number-two problem, and it sort of alludes to the Congresswoman’s question, these parts, if there are safety issues associated 

with them, can be recalled by the U.S. Department of Transportation National Highway Traffic Safety Administration. NHTSA 

does have the ability to take responsibility for these parts. So that 

really shouldn’t be an issue. 

It really goes back to your first question of competition. And I 

have to go back to this drawing right here. When you think about 

the fact that 73 percent of the parts are only available from one 

source, that number has been pretty consistent for all of these 

years, and it is only recently that we have seen this exponential 

increase in these patents. So that is why we suggest that this is 

a business strategy and not a strategy to protect those fenders, 

which they have been making since the beginning of this chart. 

Ms. LOFGREN. The gentlelady yields back. 

And we have no additional Members—— 

Ms. JACKSON LEE. I yield back. 

Ms. LOFGREN [continuing]. Seeking time, so I would like to thank 

all of the witnesses for the testimony today. 

Without objection, Members will have 5 legislative days to submit additional written questions, which we will forward to the witnesses. And, if that should occur, we would ask that you answer 

as promptly as you can so that your answers could be made part 

of the record. And the record will remain open for 5 legislative days 

with the submission of other material. 

I would just like to note, in closing, that the bill which I have 

introduced—we have had a wide-ranging discussion, but the bill 

only applies to the enforcement of design patents against repair 

parts. And, in that case, the repair parts must have the sole purpose of restoring something to their original purpose. So this is 

really, actually a very narrow bill oriented to a very large problem 

for consumers. And I just thought it was worth reiterating that 

point, since we have had a wide-ranging discussion. 

And, clearly, Congress has a role to play in the patent law. I was 

interested to hear the three kinds of patents, but there is still another until Bilski is decided: business methods. So sometimes the 

courts answer the question before the Congress gets around to it, 

but that doesn’t preclude Congress from weighing in when necessary. 

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So we appreciate your testimony. 

And, with that, this hearing is adjourned. 

[Whereupon, at 4:53 p.m., the Committee was adjourned.] 

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