Proposal for a Directive of the European Parliament and of the Council amending Directive 98/71/EC on the legal protection of designs  {SEC(2004) 1097}
Date: 2004-09-14
Institutions: European Commission
Subjects: European Union Intellectual Property Office, competition law, designs and models, industrial property, liberalisation of the market, motor vehicle industry, restriction on competition, spare part, vertical agreement

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 14.9.2004 
COM(2004) 582 final 

2004/0203 (COD) 

Proposal for a 

DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL  

amending Directive 98/71/EC on the legal protection of designs 

(presented by the Commission) 

{SEC(2004) 1097} 

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EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

This proposal concerns design protection of spare parts intended to restore the appearance of 
complex products such as motor vehicles. It aims to complete the Internal Market through the 
process of liberalisation begun and partially achieved in Directive 98/71/EC, so as to increase 
competition and offer consumers greater choice as to the source of spare parts used for repair 
purposes.  At  the  same  time  it  maintains  the  overall  incentive  for  investment  in  design  as  it 
does  not  affect  design  protection  for  new  parts  incorporated  at  the  manufacturing  stage  of  a 
complex product.  

The current situation of different, opposed regimes of design protection for spare parts where 9 
Member States have liberalised and 16 Member States extend design protection to spare parts 
is totally unsatisfactory from an internal market point of view. In the automotive sector, which 
is the sector most affected, there is a single market for new cars but no single market for their 
spare parts. Automotive spare parts currently cannot be freely produced and traded within the 
Community.  Due  to  this  fragmentation  and  the  uncertainty  about  the  evolution  of  the 
Community’s design regime citizens are insecure as to whether or not and in which Member 
State  the  purchase  of  certain  spare  parts  is  lawful,  and  they  are  deprived  in  parts  of  the 
Community of choosing between competing spare parts. For the same reason, parts producers, 
especially SMEs, cannot use the economies of scale offered by a single market and they are 
discouraged from generating investment and employment which they might otherwise do. 

The economic impact  of design  protection on the prices of spare  parts has been disputed by 
interest  groups  from  both  sides  (for  and  against  liberalisation).  However,  price  comparisons 
provided by industry associations and other stakeholders are based on anecdotal evidence or at 
best  on  simple  averages  over  some  parts  and  some  countries.  To  obtain  better  data  the 
Commission  carried  out  an  in  depth  and  systematic  analysis  to  assess  whether  there  is  a 
systematic  difference  in  the  prices  of  original  spare  parts  in  Member  States  with  design 
protection and Member States without. The findings of the study, which are described in the 
Extended Impact Assessment, support the conclusion that markets are systematically distorted.  

The analysis of a sample of prices for 11 spare parts for 20 car models in 9 Member States and 
Norway, of which 6 countries grant design protection for these parts and 4 do not, reveals that 
prices for 10  of these parts are significantly higher in Member States with design protection 
than in Member States without. The only part for which the price is not significantly higher is 
the radiator – but that part does not benefit from design protection as it is not part of the outer 
skin of a car. For the other parts, bumpers, doors, wings, lamps, lids and bonnets, prices were 
between  6.4%  and  10.3%  higher  in  Member  States  granting  design  protection.  These  results 
show  that  vehicle  manufacturers  as  the  right  holders  exercise  considerable  market  power  in 
these Member States to the detriment of consumers. 

In sum, the current situation with a mixed protection regime is creating trade distortions in the 
Internal  Market:  resources  and  production  are  not  allocated  on  the  basis  of  competitiveness 
and production is not determined by market mechanisms. This leads to distortion of prices and 
obstacles  to  trade.  It  can  be  expected  that  in  a  liberalised  Internal  Market  prices  would 
decrease. In addition, business opportunities and jobs would be created for independent SMEs, 
who  have  thus  far  only  been  able  to  obtain  a  modest  share  of  the  market,  also  in  Member 
States without design protection.  

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The current proposal should be placed in the context of a debate with a long history. Directive 
98/71/EC  on  the  legal  protection  of  designs1  was  adopted  on  13  October  1998.  It  aims  to 
ensure  coherence  between  national  provisions  of  design  law  which  most  directly  affect  the 
functioning of the internal market, ensuring a high level of protection for industrial property 
and encouraging investment in manufacturing. Under the directive the appearance of a product 
may be protected against use by third parties if it is new and original design. However, at the 
time, it was not possible to harmonise the design regime in relation to the after market in spare 
parts.  

Design  protection  grants  exclusivity  to  a  new  and  original  design  for  the  appearance  of  an 
individual product (eg a vase), a complex product (e.g. a car) or a component part (e.g. a door 
panel).  

The  primary  market  for  component  parts  concerns  their  incorporation  at  the  initial 
manufacturing and production stage of a complex product. Once that complex product is sold 
to a consumer and used, it can suffer accidents, breakdowns or damages and parts may have to 
be replaced or repaired. This constitutes the secondary market or aftermarket for spare parts. 
The same part might enter the market as an initial component (new part) in the primary market 
or  as  a  spare  part  in  the  secondary  market.  However  it  is  only  the  secondary  market 
(aftermarket) which is affected by the current proposal. 

Not  all  the  spare  parts  on  the  market  will  be  affected  by  this  proposal.  The  spare  parts 
concerned are defined as “a component part used for the purpose of the repair of a complex 
product so as to restore its original appearance”. A complex product is a product composed of 
different components or parts that can be replaced or repaired in case of damage with a spare 
part. There are spare parts for which it is not imperative that the original design feature is used 
to restore the original appearance of the product, for example because it has a standard shape 
or function. There are other spare parts for which the design is necessary to restore the original 
function or appearance of the product, in other words, the part or component of the complex 
product  can  only  be  replaced  by  a  spare  part  identical  to  the  original  part.  These  are  often 
called “must match” spare parts and only they are the subject matter of this proposal. 

At present, the Directive does not exclude the protection of spare parts by a design right, in 
other words, the protection conferred on the design of the new part in the primary market can 
equally well apply to the spare part in the secondary market or aftermarket. However, in spite 
of  the  fact  that  Member  States  were  not  able  to  agree  on  harmonisation  in  the  aftermarket, 
article 14 of the Directive did stipulate that Member States shall maintain their existing laws in 
this  regard  and  may  change  those  provisions  only  in  a  way  that  liberalises  the  spare  parts 
market (the “freeze plus” solution). What is more, Article 18 of the Directive provides for the 
Commission  to  analyse  the  consequences  of  the  Directive  and  to  come  forward  with  any 
changes to the Directive to complete the market in spare parts. As the Directive did not change 
the  status  quo  for  existing  spare  parts  regimes  in  MS,  except  to  allow  for  liberalisation,  an 
analysis of the consequences of the Directive itself at this stage would not assist in deciding 
what further changes are necessary. Instead, the Commission focussed its study on the specific 
issue of design protection in the aftermarket.  

1 

OJ 289, 28.10.98, p. 28. 

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Now that all Member States have transposed Directive 98/71/EC into their national legislation 
the situation is as follows:  

•  Austria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Lithuania, 
Malta,  Poland,  Portugal,  Slovakia,  Slovenia  and  Sweden  have  still  effectively  design 
protection for spare parts.  

•  In  Belgium,  Hungary,  Ireland,  Italy,  Latvia,  Luxembourg,  The  Netherlands,  Spain  and 
United Kingdom a repairs clause is foreseen, allowing design protection on new products 
but leaving the possibility for alternative parts in repair or replacement in the aftermarket. 

•  Greece provides for a repairs clause combined with a term of protection of 5 years and a 
fair  and  reasonable  remuneration.  This  system  of  remuneration  has  not  yet  been  put  into 
practice. 

An  important  parallel  development  is  that  legislation  on  the  unitary  Community  design 
administered by the Office for Harmonisation in the Internal Market (Alicante) went a stage 
further  towards  liberalisation  of  the  secondary  market  with  Article  110(1)  of  Council 
Regulation  (EC)  No  6/2002  on  Community  designs.  This  provides  that  “protection  as  a 
Community  design  shall  not  exist  for  a  design  which  constitutes  a  component  part  of  a 
complex product used ... for the purpose of repair of that complex product so as to restore its 
original  appearance”.  In  other  words  there  is  no  protection  available  under  the  Community 
design  regime  (as  opposed  to  national  design  rights)  for  “must-match”  spare  parts  in  the 
aftermarket.  That  text  has  been  taken  as  a  basis  for  the  current  proposal  addressing  national 
regimes. 

Since  the  adoption  of  the  Directive  on  the  legal  protection  of  designs,  the  Commission  has 
adopted a new Regulation (EC) no. 1400/2002 on the application of Article 81(3) of the Treaty 
to  categories  of  vertical  agreements  and  concerted  practices  in  the  motor  vehicle  industry2. 
This  new  regulatory  regime  has  resolved  some  practical  issues  regarding  the  distribution  of 
spare parts, in particular the objective to protect effective competition on the market for repair 
and  maintenance  services,  inter  alia  by  allowing  users  to  choose  between  competing  spare 
parts. However, it does not deal directly with the crucial question of the protection or not of 
spare parts by an industrial property right. Thus, Regulation 1400/2002 does not preclude the 
need for greater approximation and liberalisation of national laws in relation to spare parts. On 
the  contrary,  the  liberalisation  on  the  secondary  market  is  indispensable  to  release  the  full 
benefits of this Regulation. 

2. 

RESULTS  OF  CONSULTATIONS  WITH  THE  INTERESTED  PARTIES  AND  IMPACT 
ASSESSMENTS 

2.1. 

Description of the market 

The discussion on design protection in the aftermarket for complex products is a longstanding 
one (around 15 years) and was triggered by, precisely, the automotive sector which constitutes 
a  special  case.  The  main  reasons  for  this  is  are  that:  design  plays  an  important  part  in  the 
consumer’s  original  choice  of  vehicle;  cars  are  subject  to  accidental  damage;  and  they  are 
expensive and durable items which their owners repair by replacing a part rather than buying a 

2 

OJ 203, 1.8.2002, p. 30. 

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new car. Other market sectors are much more fragmented, volumes are too small, and models 
and  design  change  too  rapidly  for  independent  producers  to  have  an  economic  incentive  to 
enter the market.  

It  is  important  to  bear  in  mind  that  the  debate  about  spare  parts  concerns  only  a  small 
proportion of the overall market for automotive vehicles and their component parts. New parts 
are not affected, and many spare parts either do not fulfil the criteria for design protection or 
are  not  used  as  replacement  parts  to  restore  the  overall  appearance  of  the  original  vehicle. 
Estimates  from  different  interested  parties  vary  considerably.  As  explained  in  the  Extended 
Impact Assessment, the overall automotive replacement market is € 42 to 45 billion in EU15. 
According  to  ECAR,  who  favour  liberalisation,  the  market  size  concerned  by  this  proposal 
could  potentially  account  for  approximately  25%  or  9-11  billion  €.  However  the  car 
manufacturers estimate that the affected market comprises only 5% of the whole market. 

The  main  types  of  parts  concerned  are  replacement  body  panels,  auto  glazing  and  lighting 
units.  These  may  be  supplied  by  vehicle  manufacturers  (VMs),  original  equipment  suppliers 
(OES) and independent suppliers (IS). These distinctions are not rigid as original equipment 
suppliers sometimes act both under contract to VMs and separately as independent suppliers - 
even for the same part. This applies particularly to automotive glazing and lighting. 

Independent  suppliers  find  it  difficult  to  enter  this  market.  The  defining  characteristic  of  all 
products in this market is their “must-match” design, which means that replacing parts must be 
identical  to  the  originals.  Given  the  precision  engineering  of  modern  cars  the  tolerance  for 
error is often very small. Independent suppliers are obliged to reverse engineer the parts based 
on original samples. By contrast, original equipment suppliers benefit from the moulds that are 
used in the production of parts for the primary market. The ability of independent suppliers to 
keep the aftermarket supplied with high quality non-original parts is also reduced by regular 
small  revisions  to  body  shape  and  design  introduced  as  the  vehicle  manufacturers  ‘refresh’ 
their models. The inferior fit of non-original body panels might be the reason why OES parts 
continue  to  hold  considerable  market  share  even  in  countries  where  liberalisation  of  design 
regulations  makes  competition  possible.  Where  product  characteristics, 
protection 
manufacturers’  sophistication  and  the  pattern  of  supply  have  made  the  fit  issue  less  of  a 
problem (e.g. glazing, lighting), the IS market share appears to be much larger. This illustrates 
the fact that design right is only one factor in the vehicle manufacturers’ ability to control the 
aftermarket in spare parts, even though that does not make it any less important to address. 

Within the automotive market the following sub-sectors will be most-affected by the proposal: 

•  Production of body panels was traditionally a core activity of vehicle manufacturers. Metal 
body  panels  are  still  mostly  produced  by  the  vehicle  manufacturers  themselves.  This 
position is eroding, with greater outsourcing of panel production, but all evidence suggests 
that the vehicle manufacturers retain a strong hold on the aftermarket. Plastic body panels 
such  as  bumpers  are  often  provided  by  specialist  companies  on  the  basis  of  industrial 
contracts  based  on  exclusivity,  including  on  spare  parts.  The  total  turnover  of  the 
independent  body  panel  producers  inside  the  EU  can  be  estimated  at  375  M€  (5%  of  the 
total market in body panels of € 7.5 billion in the EU-15). 

•  In  the  auto  glazing  market,  glass  producers  estimate  the  average  windscreen  replacement 
rate at 5%, giving an annual market of around 10 million screens replaced each year. The 
aftermarket  for  glazing  products  in  EU-15  is  estimated  at  €1  billion.  There  is  de  facto 
liberalisation  in  the  auto  glazing  sector  as  vehicle  manufacturers  buy  in  parts  from 

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producers. The patterns of parts supply and fitting are very different from both body panels 
and  lighting.  The  European  auto  glazing  market  is  dominated  by  three  manufacturers: 
Pilkington, Saint Gobain and Glaverbel. Each of these has a substantial global presence in 
addition to a major share of the EU market. It is estimated that between them they have a 
75% share of the EU aftermarket.  

•  As  concerns  lighting,  the  integral  lighting  aftermarket  is  estimated  as  being  worth  €1.22 
billion  per  annum.  Figures  suggest  around  half  are  OES  parts.  The  bulk  of  European 
lighting unit production in Europe is today accounted for by a few firms: Valeo, Hella and 
Automotive  Lighting.  Historically  these  firms  have  also  supplied  the  same  lights  to  the 
aftermarket with very little competition from outside the EU. The machine mould used for 
OE production of a lighting unit would be used to make lights that would be sold into the 
aftermarket through independent distribution channels, without the vehicle manufacturers’ 
logo. 

Finally, it is useful to note that, given the type of market, the bulk (80% by some estimates) of 
spare parts repairs are “crash parts” fitted in jobs paid for by insurers. Fitters are reimbursed 
for the work that they undertake on the basis of an agreed schedule of rates for replacement 
parts and a standard labour cost. 

For those jobs, the insurer’s power to specify what kind of part is used to replace the damaged 
article (i.e. OE or IS) and the price it is willing to pay for the replacement give it significant 
market power. 

2.2. 

Consultation, study and impact assessments 

After the adoption of the Directive, an attempt was made to create a level playing field in the 
aftermarket  through  a  voluntary  agreement  among  the  parties  concerned.  To  that  end,  the 
Commission  undertook,  in  a  statement  concerning  the  after-market  in  spare  parts  published 
with the Directive, to launch and co-ordinate a consultation exercise on design protection for 
component parts of complex products in the motor vehicle sector and to inform the European 
Parliament  and  the  Council  of  the  progress  thereof.  A  series  of  bilateral  meetings  with 
interested  parties  took  place  from  October  to  November  2000.  The  conclusion  of  the 
consultations was that the positions of the parties will remain completely opposed and too far 
apart to reach a voluntary agreement. 

Given the impossibility of a voluntary agreement, and in addition to consultation of numerous 
other  sources,  the  Commission  commissioned  an  study  of  the  possible  options  to  harmonise 
the  aftermarket  in  spare  parts.  The  study  focused  on  the  automotive  sector,  reflecting  the 
importance of the economic impact in this sector. 

The aim of the study was to examine how four alternative regimes for design protection would 
translate  into  future  impact  on  competition,  Community  industrial  sectors  and  consumers, 
against a baseline corresponding to the present situation, namely: 

•  The resent situation or “status quo”. 

•  “Liberalisation”, i.e. no design protection of spare parts. This option assumes the revision 
of Directive 98/71/EC for must-match parts that would remove design protection for must-
match parts across the European Union. 

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•  A  system  seeking  a  short  term  of  design  protection.  Under  this  alternative,  design 
protection  for  spare  parts  would  be  effective  for  only  a  limited  period  in  time.  After  this 
period, the spare parts can no longer be covered by design protection and any producer will 
be free to produce them. 

•  A remuneration system for the use of protected designs, including the appropriate level for 
remuneration.  In  the  context  of  this  option,  independent  producers  could  produce  spare 
parts in exchange for a reasonable remuneration to be paid to the holder of the design right. 

•  A combination of both the systems previously mentioned, that is to say, a short term of full 

design protection and a remuneration system for a subsequent period. 

For  each  option  the  assessment  of  the  Commission  is  set  out  in  the  Commission’s  own 
Extended  Impact  Assessment  which  has  been  based  on  the  study  as  well  as  additional 
contributions from the car manufacturers, independent suppliers and insurers. 

On the basis of this assessment the Commission has come to the conclusion that the option to 
exclude design protection in the aftermarket for spare parts is the only effective one to achieve 
an  internal  market.  Liberalisation  promises  benefits  in  many  respects  without  serious 
drawbacks.  It  would  improve  the  functioning  of  the  Internal  Market,  allow  for  more 
competition in the aftermarket, bring down prices for consumers and create opportunities and 
jobs  for  SMEs.  As  the  Extended  Impact  Assessment  demonstrates,  the  other  options  imply 
little or no change to the current unsatisfactory situation. Given the limited life-span of cars, a 
system granting legal protection to original producers for a limited period would eliminate the 
economic  incentive  for  independent  suppliers  to  enter  the  market.  A  remuneration  system  is 
administratively burdensome and offers little legal certainty.  

2.3. 

Expected benefits from the proposal 

The beneficial effects of this proposal can be summarised as follows: 

•  For the consumer 

Consumers  will  benefit  directly  from  the  increased  competition  and  the  completion  of  the 
Internal  Market.  The  independent  distribution  sector  will  be  in  a  position  to  put  a  larger 
spectrum  of  parts  on  offer,  including  parts  from  original  equipment  suppliers  as  well  as  the 
normally  cheaper  parts  from  independent  producers.  This  will  lead  to  a  greater  variety  of 
makes  of  parts,  giving  the  repairer  and/or  the  insurer,  hence  the  final  consumer,  a  greater 
choice and a lower price for must-match parts. The Commission’s figures suggest consumers 
are paying a 6 to 10% premium for the spare parts covered by the proposal in Member States 
which allow design protection. Currently, in some Member States the consumer pays twice for 
the same design: once when he buys a new car and the second time when it needs repairs. A 
harmonised repairs clause would end this state of affairs. 

•  Competitiveness of business and competition 

Without a repairs clause the consumer will have a choice of repairer for body-integrated parts 
but no choice of the parts themselves. This proposal intends to remedy this uneven situation 
and  increase  competition  in  all  parts  of  and  for  all  players  in  the  value  chain.  While  car 
manufacturers will lose part of their market share as well as their monopoly rents, it will also 

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open business opportunities to independent spare parts producers, mostly SMEs, and create a 
European market of sufficient scale allowing new entrants to emerge. 

Competitiveness  of  EU  car  manufacturers  vis-à-vis  producers  in  third  countries  will  not  be 
adversely affected. In the USA design protection is not extended to spare parts. It is true that in 
Japan  design  protection  is  extended  to  spare  parts  for  a  maximum  period  of  15  years. 
However,  this  proposal  will  also  significantly  increase  the  market  for  EU  suppliers  by 
allowing them to produce parts for Japanese and other foreign-produced cars in the EU. 15% 
of all cars on the road in the EU are produced in third countries. This significant share of the 
market  would  open  to  EU  producers,  which  is  why  Japanese  and  American  vehicle 
manufacturers oppose EU-wide liberalisation. 

What is more, in terms of reward for the investment for design right holders, the actual costs 
of development of a new design and the protection of ex-ante incentives to innovate amounts 
to only € 50 to 60 per car. This amount can be adequately addressed by the grant of exclusive 
rights covering only the exploitation of the design for the production and sale of the complex 
product on the primary market. Vehicle manufacturers will certainly continue to be able to use 
design as a marketing instrument for their core business irrespective of whether or not there is 
protection in the aftermarket. 

Overall, liberalisation would have a positive impact on competition in the EU aftermarket. It 
would foster a more dynamic market in the long run. The improved competitive environment 
will  especially  benefit  SMEs  active  in  this  sector.  It  is  worth  pointing  out  that  even  in 
liberalised markets, such as the UK, manufacturers have thus far retained up to 95% of the key 
market in body panels. It can be concluded therefore that it is extremely difficult for SMEs to 
loosen the grip of the manufacturers on the aftermarket, making it all the more necessary as 
well as urgent to complete the internal market in this area. 

•  Employment 

Shifts  in  the  market  shares  of  spare  parts  producers  will  necessarily  be  reflected  in  shifts  in 
employment.  Against  the  potential  small  detrimental  impact  on  employment  by  EU  car 
manufacturers,  SMEs  stand  to  increase  their  market  share  and  create  employment 
opportunities. The following beneficial effects on employment in the EU spare parts industry 
can already be reasonably expected: 

–  First,  new  EU  jobs  will  be  created  by  the  growth  of  the  market  for  spare  parts.  In  a 
liberalised regime, EU parts manufacturers will be allowed to produce in the EU parts for 
supplying  important  export  markets  (USA,  South  America,  Eastern  Europe).  Design 
protection in the aftermarket currently denies this opportunity.  

–  Second, about 15 % of the cars on Community roads are cars imported from abroad. These 
imports include inter alia Japanese, Korean and U.S. makes, but also cars produced by EU 
vehicle  makers  in  the  U.S.  and  elsewhere.  Parts  for  these  cars  are  almost  exclusively 
produced  in  Japan,  Korea,  Taiwan  and  the  U.S.  All  the  vehicle  makers  at  issue  have 
registered car component designs in the EU and have complete control over this segment of 
the aftermarket. 

–  Third,  there  is  likely  to  be  a  positive  net  employment  impact  in  distribution  due  to  the 
increased  sales  of  spare  parts.  While  some  jobs  might  be  lost  in  the  authorised  dealer 
networks, new jobs will emerge in the free market. 

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–  Fourth and finally, it needs to be noted that the car industry themselves import many parts 
from  third  countries:  Volkswagen  imports  wings  from  South  Africa;  Renault  imports 
bonnets from Taiwan; and Audi imports rear lamps from Brazil. If EU-based SMEs could 
obtain  a  greater  share  of  the  market,  these  jobs  will  return  to  the  EU.  All  in  all, 
liberalisation should not have a negative impact on employment in the EU. 

•  Safety and health 

The issue of the safety, quality and structural integrity of spare parts has been raised regularly. 
They  are  clearly  crucial  for  consumers.  However  design  protection  is  meant  to  reward  the 
intellectual effort of the creator of a design and to protect the appearance of the product, but 
not  its  technical  functions  or  quality  (which  could  be  subject  respectively  to  patent  or 
trademark protection). If the design of a bumper is not protected because it does not fulfil the 
requirement of novelty, it does not necessarily mean that it is less safe than another protected 
bumper.  

Safety and quality of products, including spare parts are safeguarded by other EC legislation 
and national laws, where the necessary standards are set in terms of product safety and access 
to technical information. More specifically in the automobile sector, over 90 Directives are in 
place,  which  regulate  the  construction  and  functioning  of  motor  vehicles.  A  "framework 
directive" provides for the general rules applicable to the type-approval of motor vehicles. The 
information  to  be  given  by  any  manufacturer  going  through  a  type-approval  procedure  for  a 
product is extremely detailed. All this information is required irrespective of the product being 
covered by an industrial design right or not. (See the Extended Impact Assessment for details.) 
Design rights, which protect the appearance and aesthetics of a product, have a neutral impact 
with  regard  to  safety  or  pedestrian  protection  and  would  not  be  capable  of  providing  safety 
guarantees which are available through other specific mechanisms. Consumers would benefit 
directly  and/or  indirectly  from  the  increased  competition  and  the  completion  of  the  Internal 
Market resulting from liberalisation. 

2.4. 

Conclusion 

The  main  purpose  of  design  protection  is  to  grant  exclusive  rights  to  the  appearance  of  a 
product,  but  not  a  monopoly  over  the  product  as  such.  However,  protecting  designs  in  the 
aftermarket for spare parts for which there is no practical alternative would lead to a product 
monopoly. Design protection should allow obtaining a fair return on the investment made and 
fostering  innovation  through  competition,  which  is  achieved  in  the  production  of  new 
products.  If  third  parties  are  allowed  to  produce  and  distribute  spare  parts,  competition  is 
maintained.  If  design  protection  is  extended  to  spare  parts,  such  third  parties  would  infringe 
those  rights,  competition  would  be  eliminated  and  the  holder  of  the  design  right  would  de 
facto be given a product monopoly. 

The  liberalisation  option  promises  net  benefits  in  many  respects  It  would  improve  the 
functioning  of  the  Internal  Market  and  would  allow  for  more  competition  in  the  aftermarket 
and access and participation of SMEs in this market. The consumer would benefit from more 
choice  and  lower  prices.  Besides  the  increase  of  legal  certainty,  it  would  also  have  as  a 
consequence the simplification of daily lives of administrations, courts, companies, especially 
SMEs, and consumers. 

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3. 

EXPLANATORY NOTE TO THE PROVISIONS 

Article 1 

At the time when directive 98/71/EC on the legal protection of designs was adopted, it was not 
possible  to  harmonise  the  design  regime  in  relation  to  the  after  market  in  spare  parts.  There 
was a lack of agreement on the role of design protection in respect of “must match” spare parts 
for complex products. Therefore, at present, article 14 of the Directive stipulates that Member 
States shall maintain their existing laws in this regard and may change those provisions only in 
a way that liberalises the spare parts market. 

This article intends to harmonise and complete the internal market in the area through the full 
liberalisation of the market for spare parts. 

The repairs clause does not limit the right of design right holders, it prevents the existence of 
monopolies on the spare parts market. The design right on the appearance of a primary product 
will not be extended to the product in the secondary market. 

A  provisional  and  transitory  Repairs  Clause  is  already  foreseen  in  article  110(1)  of  Council 
Regulation  (EC)  No  6/2002  of  12  December  2001  with  effect  on  Community  design3.  This 
proposal  intends  to  achieve  harmonisation  of  national  design  protection  systems  and 
consistency with the Community design.  

In order that consumers are informed about the different origins of competing spare parts and 
can exercise their choice in full knowledge of whether the spare part comes from the original 
vehicle  manufacturer  or  another  source,  paragraph  2  of  this  Article  provides  for  Member 
States to ensure that consumers are duly informed as to the origin of spare parts and make an 
informed choice between competing parts. 

Article 2 

The  entry  into  force  is  foreseen  at  the  latest  two  years  after  adoption  of  the  Directive.  This 
means that, as from that date, no design right holder will any longer be able to assert his right 
to  prevent  independent  production  or  distribution  of  spare  parts  for  the  aftermarket.  This 
should  constitute  a  final  step  to  the  realisation  of  a  liberalisation  of  the  aftermarket  in  spare 
parts.  An  extended  implementation  period  is  proposed  by  the  Commission  in  view  of  the 
existing situation in Member States. 

3 

“….protection as a Community design shall not exist for a design which constitutes a component part of 
a complex product used within the meaning of article 19(1) for the purpose of the repair of that complex 
product so as to restore its original appearance”. 

EN 

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2004/0203 (COD) 

Proposal for a 

DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL  

amending Directive 98/71/EC on the legal protection of designs 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community, and in particular Article 
95 thereof, 

Having regard to the proposal from the Commission4, 

Having regard to the opinion of the European Economic and Social Committee5, 

Acting in accordance with the procedure laid down in Article 251 of the Treaty6, 

(1)  Whereas  the  sole  purpose  of  design  protection  is  to  grant  exclusive  rights  to  the 
appearance  of  a  product,  but  not  a  monopoly  over  the  product  as  such;  whereas 
protecting  designs  for  which  there  is  no  practical  alternative  would  lead  in  fact  to  a 
product  monopoly;  whereas  such  protection  would  come  close  to  an  abuse  of  the 
design  regime;  whereas  if  thirds  parties  are  allowed  to  produce  and  distribute  spare 
parts,  competition  is  maintained;  whereas  if  design  protection  is  extended  to  spare 
parts, such third parties infringe those rights, competition is eliminated and the holder 
of the design right is de facto given a product monopoly; 

(2)  Whereas  the  differences  in  the  laws  of  the  Member  States  on  the  use  of  protected 
designs for the purpose of permitting the repair of a complex product so as to restore 
its  original  appearance,  where  the  product  incorporating  the  design  or  to  which  the 
design  is  applied  constitutes  a  component  part  of  a  complex  product  upon  whose 
appearance  the  protected  design  is  dependent,  directly  affect  the  establishment  and 
functioning of the internal market as regards goods embodying designs; whereas such 
differences can distort competition within the internal market; 

(3)  Whereas it is therefore necessary for the smooth functioning of the internal market to 
approximate the design protection laws of the Member States as concerns the use of 
protected  designs  for  the  purpose  of  repair  of  a  complex  product  so  as  to  restore  its 
original appearance; 

(4)  Whereas  to  complement  the  provisions  of  Commission  Regulation  no  1400/2002 
concerning the ability of a manufacturer to place its trade mark or logo on components 

4 
5 
6 

OJ C […], […], p. […]. 
OJ C […], […], p. […]. 
OJ C […], […], p. […]. 

EN 

11 

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or  spare  parts  visibly  and  in  an  effective  manner,  Member  States  shall  ensure  that 
consumers are duly informed about the origin of spare parts, such as information about 
trade marks or logos placed on the parts concerned. 

(5) 

Directive 98/71/EC should be amended accordingly 

HAVE ADOPTED THIS DIRECTIVE: 

Article 1 

Article 14 of Directive 98/71/EC is replaced by the following: 

“Article 14 

1. 

2. 

1. 

Protection as a design shall not exist for a design which constitutes a component part 
of a complex product used within the meaning of Article 12(1) of this Directive, for 
the  purpose  of  the  repair  of  that  complex  product  so  as  to  restore  its  original 
appearance. 

Member  States  shall  ensure  that  consumers  are  duly  informed  about  the  origin  of 
spare  parts  so  that  they  can  make  an  informed  choice  between  competing  spare 
parts.” 

Article 2 

Member  States  shall  bring  into  force  the  laws,  regulations  and  administrative 
provisions necessary to comply with this Directive not later than two years after its 
adoption.  They  shall  forthwith  communicate  to  the  Commission  the  text  of  those 
provisions and a correlation table between those provisions and this Directive. 

When  Member  States  adopt  those  provisions,  they  shall  contain  a  reference  to  this 
Directive  or  be  accompanied  by  such  a  reference  on  the  occasion  of  their  official 
publication. Member States shall determine how such reference is to be made. 

2. 

Member States shall communicate to the Commission the text of the main provisions 
of national law which they adopt in the field covered by this Directive. 

This Directive shall enter into force on the twentieth day following that of its publication in 
the Official Journal of the European Union. 

Article 3 

This Directive is addressed to the Member States. 

Article 4 

EN 

12 

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Done at Brussels, […] 

For the European Parliament 
The President 
[…] 

For the Council 
The President 
[…] 

EN 

13 

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LEGISLATIVE FINANCIAL STATEMENT 

Policy area(s): Internal Market for Goods and Services 

Activit(y/ies): liberalise the aftermarket in spare parts 

TITLE OF ACTION: PROPOSAL FOR A DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE 
COUNCIL  AMENDING  DIRECTIVE  98/71/EC  OF  THE  EUROPEAN  PARLIAMENT  AND  OF 
THE COUNCIL OF 13 OCTOBER 1998 ON THE LEGAL PROTECTION OF DESIGNS.  

1. 

BUDGET LINE(S) + HEADING(S) 

12 02 01 Implementation and development of the Internal Market 

12 01 04 01 Implementation and development of the Internal Market – Expenditure 
on administrative management 

2. 

OVERALL FIGURES  

2.1. 

Total allocation for action (Part B): € million for commitment 

Not applicable 

2.2. 

Period of application: 

(start and expiry years) 

Indefinite 

2.3. 

Overall multiannual estimate of expenditure: 

(a) 

Schedule  of  commitment  appropriations/payment  appropriations 
intervention) (see point 6.1.1) 

(financial 

Not applicable 

Commitments 

Payments 

€ million (to three decimal places) 

Year [n] 

[n+1] 

[n+2] 

[n+3] 

[n+4] 

[n+5 
and 
subs. 
Years] 

Total 

EN 

14 

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(b) 

Technical and administrative assistance and support expenditure(see point 6.1.2) 

Commitments 

Payments 

Subtotal a+b 

Commitments 

Payments 

(c) 

Overall  financial  impact  of  human  resources  and  other  administrative  expenditure  
(see points 7.2 and 7.3) 

Commitments/ 
payments 

TOTAL a+b+c 

Commitments 

Payments 

2.4. 

Compatibility with financial programming and financial perspective 

[x]  Proposal is compatible with existing financial programming. 

[…]  Proposal  will  entail  reprogramming  of  the  relevant  heading  in  the  financial 

perspective. 

[…]  Proposal  may  require  application  of  the  provisions  of  the  Interinstitutional 

Agreement. 

2.5. 

Financial impact on revenue:7 

[x]  Proposal  has  no  financial  implications  (involves  technical  aspects  regarding 

implementation of a measure) 

OR 

[…]  Proposal has financial impact – the effect on revenue is as follows: 

(NB All details and observations relating to the method of calculating the effect on 
revenue should be shown in a separate annex.) 

7 

For further information, see separate explanatory note. 

EN 

15 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
(€ million to one decimal place) 

Situation following action 

[Year n] 

[n+1] 

[n+2] 

[n+3] 

[n+4] 

[n+5] 

Budget line 

Revenue 

Prior to 
action  
[Year n-1] 

a) Revenue in absolute terms 

b) Change in revenue 

 ∆ 

(Please specify each budget line involved, adding the appropriate number of rows 
to the table if there is an effect on more than one budget line.) 

3. 

BUDGET CHARACTERISTICS 

Type of expenditure 

New 

EFTA 
contribution 

Contributions 
form applicant 
countries 

Heading in 
financial 
perspective 

Non-comp 

Diff/ 

NO 

NO 

NO 

3 

4. 

LEGAL BASIS  

(Show main legal basis only.) Article 95 of the EC Treaty. 

5. 

DESCRIPTION AND GROUNDS 

5.1. 

Need for Community intervention 8 

5.1.1.  Objectives pursued 

(Describe  the  problem(s)/need(s)  (in  measurable  terms)  that  the  intervention  is  designed  to 
solve/satisfy (the baseline situation against which later progress can be measured). Describe 
the objectives in terms of expected outcomes (for example as a change in the above baseline 
situation). 

At the time when the Directive 98/71/EC on the legal protection of the design of spare parts 
was adopted, it was not possible to harmonise the design regime in relation to the after market 
in spare parts in the car sector. 

The key point is whether design protection could be used for a component part used to repair 
a  complex  product  and  thus  in  an  after-market  situation.  The  current  situation  is  that 
consumers have no choice and they might be overcharged for spare parts (panels, lighting and 
automotive glass) to repair their vehicle. The aim is to give consumers a choice as to which 
spare parts are used to repair their vehicle. 

8 

For further information, see separate explanatory note. 

EN 

16 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
5.1.2.  Measures taken in connection with ex ante evaluation  

(This involves: 

(a) 

explaining how and when the ex ante evaluation was conducted (author, timing and 
where  the  report(s)  is/are  available)  or  how  the  corresponding  information  was 
gathered;9  

In  2003  the  Commission  committed  a  study  to  the  European  Policy  Evaluation  Consortium 
(Technopolis,  Paris)  on  impact  assessment  of  the  possible  options  to  liberalise  the  after-
market in spare parts. 

(b) 

describing briefly the findings and lessons learnt from the ex ante evaluation.) 

Different options on how to liberalise the after-market in spar parts was examined: 

Status  quo:  If  national  regulations  remain  unchanged,  the  privileged  position  of  vehicle 
manufacturers in the countries where design protection exists today will continue to 
exist and harmonisation of the internal market is not achieved. 

No  design  protection  in  the  aftermarket:  As  a  consequence,  in  those  Member  States  where 
such  a  protection  exists  today,  the  aftermarket  will  no  longer  be  open  solely  to  the 
vehicle  manufacturers,  but,  theoretically,  to  any  supplier  of  automotive  glazing, 
lighting or body panels. 

Term-limited protection: After this limited period any producer will be free to produce spare 

parts. During the term prices could increase since there is no competition. 

Remuneration system: Uncertainties over ownership of design rights, fairness and whether all 
producers of spare parts would pay their remuneration to the original designer, will 
remain. 

Term-limited  design  protection  plus  remuneration  system:  Costs  will  be  relatively  high. 

Probably few independent sector actors will in such a case make the investments. 

Conclusions:  With  this  proposal  the  Commission  intends  to  harmonise  and  complete  the 
internal market in the area through the full liberalisation of the market for spare parts. 

5.1.3.  Measures taken following ex post evaluation 

(Where a programme is being renewed the lessons to be learned from an interim or ex post 
evaluation should also be described briefly.) 

5.2. 

Action envisaged and budget intervention arrangements 

(This point should describe the logic behind the proposal. It should specify the main actions 
to  achieve  the  general  objective.  Each  action  should  have  one  or  more  specific  objectives. 
These should indicate the progress expected over the proposed period. They should also look 

9 

For minimum information requirements relating to new initiatives, see SEC(2000) 1051. 

EN 

17 

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beyond immediate outputs but be sufficiently precise to allow concrete results to be identified. 
Specify for each main action: 

the target population(s) (specify number of beneficiaries if possible);  

Vehicle manufacturers, suppliers, wholesalers, auto repair shops, insurers and final 

consumers. 

the specific objectives set for the programming period (in measurable terms); 

preparation of a proposal amending Directive 98/71/EC of the European Parliament and of the 

Council of 13 October 1998 on the legal protection of designs. 

the concrete measures to be taken to implement the action ; 

the immediate outputs of each action; and 

the  contribution  of  these  outputs  to  the  expected  outcomes  in  terms  of  satisfying  needs  or 
solving problems  

Information should also be given on the budget intervention arrangements (rate and form of 
the required financial assistance).) 

5.3.  Methods of implementation 

(Specify the methods to be used to implement the planned actions: direct management by the 
Commission using either regular or outside staff or by externalisation. In the latter case, give 
details  of  the  arrangements  envisaged  for  this  externalisation  (TAO,  Agencies,  Offices, 
decentralised  executive  units,  management  shared  with  Member  States  -  national,  regional 
and local authorities.) 

Indicate  the  effect  of  the  externalisation  model  chosen  on  the  financial  intervention, 
management and support resources and on human resources (seconded officials, etc.).) 

6. 

FINANCIAL IMPACT 

6.1. 

Total financial impact on Part B - (over the entire programming period) 

(The method of calculating the total amounts set out in the table below must be explained by 
the breakdown in Table 6.2. ) 

6.1.1.  Financial intervention 

Commitments (in € million to three decimal places) 

Breakdown 

[Year n] 

[n+1] 

[n+2] 

[n+3] 

[n+4] 

Total 

[n+5 and 
subs. 
Years] 

Action 1 

Action 2 

etc. 

TOTAL 

EN 

18 

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6.1.2.  Technical  and  administrative  assistance,  support  expenditure  and  IT  expenditure 

(commitment appropriations) 

[Year n] 

[n+1] 

[n+2] 

[n+3] 

[n+4] 

Total 

[n+5 and 
subs. 
years] 

1) Technical and 
administrative assistance 
a) Technical assistance 
offices 
b) Other technical and 
administrative assistance: 

- intra-muros: 
- extra-muros: 

of  which  for  construction 
and 
of 
maintenance 
computerised  management 
systems 

Subtotal 1 

2) Support expenditure 

a) Studies 

b) Meetings of experts 

c) Information and 
publications 

Subtotal 2 

TOTAL 

6.2. 

Calculation  of  costs  by  measure  envisaged  in  Part  B  (over  the  entire 
programming period)10 

(Where  there  is  more  than  one  action,  give  sufficient  detail  of  the  specific  measures  to  be 
taken for each one to allow the volume and costs of the outputs to be estimated.) 

Commitments (in € million to three decimal places) 

Type  
of outputs 
(projects, files ) 
1 

Number of outputs 
(total for years 
1…n) 
2 

Average unit cost 

3 

Total cost 
(total for years 
1…n) 
4=(2X3) 

Breakdown  

Action 1 
- Measure 1 
- Measure 2  
Action 2 
- Measure 1 
- Measure 2 
- Measure 3 
etc. 

TOTAL COST 

If necessary explain the method of calculation 

10 

For further information, see separate explanatory note. 

EN 

19 

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7. 

IMPACT ON STAFF AND ADMINISTRATIVE EXPENDITURE  

Human  and  administrative  resource  requirements  will  be  covered  from  within  the  budget 
allocated to the managing DG in the framework of the annual allocation procedure. 

7.1. 

Impact on human resources 

Types of post 

Staff to be assigned to management of the 
action using existing and/or additional 
resources 

Number of 
permanent posts 

Number of 
temporary posts 

Total 

Description of tasks deriving from the 
action 

Officials 
temporary staff 

or 

2 A 

A 

B 

C 

2 A 

If necessary, a fuller description of the 
tasks may be annexed. 

Attending  meetings  at  the  Council  to 
negotiate 
amending 
the  proposal 
Directive  98/71/EC  of  the  European 
Parliament  and  of  the  Council  of  13 
October 1998 on the legal protection of 
designs. 

Other human resources  0 

Total 

2 

0 

0 

0 

2 

7.2. 

Overall financial impact of human resources 

Type of human resources 

Amount (€) 

Method of calculation *  

Officials 

Temporary staff 

Other human resources 

216.000 € 

Annual costs per official: 

108.000 € x 2 officials = 216.000 € 

(specify budget line) 

Total  216.000 € 

The amounts are total expenditure for twelve months. 

7.3. 

Other administrative expenditure deriving from the action 

Amount € 

Method of calculation 

Budget line 

(number and heading) 

Overall allocation (Title A7) 

12 01 02 11 01 – Missions 

12 01 02 11 02 – Meetings and conferences 
12 01 02 11 03 – Committees (1) 

12 01 02 11 04 – Studies and consultations 

Other expenditure (specify) 

Information systems 

Other expenditure - Part A (specify) 

EN 

Total 

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The amounts are total expenditure for twelve months. 

(1) Specify the type of committee and the group to which it belongs. 

I. 

II. 

Annual total (7.2 + 7.3) 

Duration of action 

III. 

Total cost of action (I x II) 

€ 

years 

€ 

(In the estimate of human and administrative resources required for the action, DGs/Services 
must take into account the decisions taken by the Commission in its orientation/APS debate 
and when adopting the preliminary draft budget (PDB). This means that DGs must show that 
human  resources  can  be  covered  by  the  indicative  pre-allocation  made  when  the  PDB  was 
adopted.  

Exceptional cases (i.e. those where the action concerned could not be foreseen when the PDB 
was  being  prepared)  will  have  to  be  referred  to  the  Commission  for  a  decision  on  whether 
and how (by means of an amendment of the indicative pre-allocation, an ad hoc redeployment 
exercise,  a  supplementary/amending  budget  or  a  letter  of  amendment  to  the  draft  budget) 
implementation of the proposed action can be accommodated.) 

8. 

FOLLOW-UP AND EVALUATION 

8.1. 

Follow-up arrangements 

(Adequate  follow-up  information  must  be  collected,  from  the  start  of  each  action,  on  the 
inputs,  outputs  and  results  of  the  intervention.  In  practice  this  means  (i)  identifying  the 
indicators for inputs, outputs and results and (ii) putting in place methods for the collection of 
data). 

8.2. 

Arrangements and schedule for the planned evaluation 

(Describe the planned schedule and arrangements for interim and ex post evaluations to be 
carried out in order to assess whether the intervention has achieved the objectives set. In the 
case  of  multiannual  programmes,  at  least  one  thorough  evaluation  in  the  life  cycle  of  the 
programme is needed. For other activities ex post or mid-term evaluations should be carried 
out at intervals not exceeding six years.) 

A  study  on  ex-post  evaluation  could  be  envisaged  within  the  framework  of  the  Design 
Directive as a whole. 

9. 

ANTI-FRAUD MEASURES 

(Article  3(4)  of  the  Financial  Regulation:  "In  order  to  prevent  risk  of  fraud  or  irregularity, 
the  Commission  shall  record  in  the  financial  statement  any  information  regarding  existing 
and planned fraud prevention and protection measures.") 

EN 

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IMPACT ASSESSMENT FORM 

THE IMPACT OF THE PROPOSAL ON BUSINESS WITH SPECIAL REFERENCE 
TO SMALL AND MEDIUM-SIZED ENTERPRISES( SMEs)  

TITLE OF PROPOSAL 

Proposal for a Directive of the European parliament and of the Council amending Directive 
98/71/EC  of  the  European  parliament  and  of  the  Council  of  13  October  1998  on  the  legal 
protection of designs. 

DOCUMENT REFERENCE NUMBER 

COM(2004) 582 

THE PROPOSAL 

1. 

Taking  account  of  the  principle  of  subsidiarity,  why  is  Community  legislation 
necessary in this area and what are its main aims? 

Directive 98/71/EC on the legal protection of the design of spare parts was adopted 
on 13 October 1998. At the time, it was not possible to harmonise the design regime 
in relation to the after market in spare parts. There was a lack of agreement on the 
role  of  design  protection  in  respect  of  “must  match”  spare  parts  for  complex 
products.  Therefore,  at  present  article  14  of  the  Directive  stipulates  that  Member 
States  shall  maintain  their  existing  laws  in  this  regard  and  may  change  those 
provisions only in a way that liberalises the spare parts market. 

The Commission committed itself to analysing the consequences of the provisions of 
Directive 98/71/EC for Community industry, for consumers, for competition and for 
the functioning of the internal market, in particular considering harmonisation, and, 
after consultation with the parties most affected, the Commission committed itself to 
proposing to the European Parliament and to the Council, any changes to Directive 
98/71/EC needed to complete the internal market. 

THE IMPACT ON BUSINESS 

2. 

Who will be affected by the proposal? 

– 

which sectors of business? 

In principle, all sectors are affected by compliance with intellectual property, but in 
particular  full  liberalisation  will  benefit  independent  producers  and  distributors  of 
component parts of complex products. A complex product is composed of multiple 
components  which  can  be  replaced  permitting  disassembly  and  reassembly  of  the 
product, such as cars, bikes, motorbikes, watches or electrical household appliances. 

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According  to  an  extended  impact  assessment  undertaken,  the  sector  which  will  be 
most  affected,  given  its  economic  value,  is  the  automotive  market.  This  market  is 
supplied by parts manufacturers of which there are three groupings: 

•  vehicle manufacturers  

•  original equipment suppliers  

•  independent suppliers. 

– 

which sizes of business (what is the concentration of small and medium-sized 
firms)? 

It concerns both large and small businesses, in particular those active in the field of 
creation and innovation. Estimates for the annual volume of the total EU market in 
automotive replacement parts range from 42 to 45 billion €, of which the market in 
replacement body panels, auto glazing and lighting units is estimated to account for 
approximately 25% or 9-11 billion €. 

– 

are  there  particular  geographical  areas  of  the  Community  where  these 
businesses are found? 

The  entire  territory  of  the  Community  is  concerned  (repair  shops).  Production  of 
personal  vehicles  was  just  under  15  000  000  per  annum  in  2001  and  2002,  with  a 
slight  decrease  in  production  in  2002.  Germany  and  France  together  account  for 
about  half  of  production,  and  Spain,  UK,  Italy  and  Belgium  for  another  40%,  the 
remainder being produced in Austria, the Netherlands, Portugal and Sweden. 

3. 

What will business have to do to comply with the proposal? 

The  abolition  of  design  protection  for  spare  parts  in  the  aftermarket  will  enhance 
competition. The means of enforcing intellectual property rights and competition law 
are available to businesses by the legislation of the Member States. 

4. 

What economic effects is the proposal likely to have? 

The extended  impact assessment study focused on the automotive sector, given the 
economic 
its  conclusions  and  subsequent 
harmonisation at European level are of application to any sector where replacement 
and repair of complex products occur. 

this  sector,  however 

impact 

in 

– 

on employment 

Liberalisation would have an affect on who produces the spare parts and the channels 
trough  which  they  are  distributed  and  sold,  but  no  direct  link  is  expected  with  an 
increase  or  a  decrease  in  employment.  New  actors  may  emerge  in  any  link  of  the 
value  chain  or  existing  actors  may  change  role.  No  quantitative  increase  can  be 
calculated  at  this  stage,  nevertheless  any  change,  however  small  it  might  be,  will 
have  a  substantial  beneficial  impact  for  the  independent  sector,  given  the  huge 
market at stake. 

EN 

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– 

on investment and the creation of new businesses 

Liberalisation  of  the  design  protection  regime  will  open  markets  hitherto  closed  to 
competition and create a European market of sufficient scale that new entrants will 
be expected. 

– 

on the competitiveness of businesses 

Competition  in  the  automotive  repair  sector  is  affected  not  only  by  the  design 
protection  regime,  but  also  by  broader  initiatives  aimed  at  reforming  the  overall 
structure  of  the  motor  vehicle  sector.  In  2002  the  Commission  adopted  a  new 
Regulation (EC) no. 1400/2002 on the application of Article 81(3) of the Treaty to 
categories  of  vertical  agreements  and  concerted  practices  in  the  motor  vehicle 
industry. With the expiry of the so-called Block Exemption Regulation 1475/95 there 
is  the  prospect  of  increased  competition  in  the  sale  of  vehicles  to  consumers  and 
increased  access  to  original  equipment  parts  within  the  servicing  and  repair  sector. 
Changes in distribution of spare parts may take place, but under influence of Block 
Exemption  Regulation,  and  hence  will  not  apply  to  design  protected  parts.  In  the 
countries concerned, the consumer therefore will eventually have a choice of repairer 
for body-integrated parts but no choice of the parts themselves. This proposal intends 
to remedy such situation and lead to increased competition in all parts of the chain: 

•  between  suppliers  of  the  different  types  of  parts,  with  increasing  competition 

coming from outside Europe; 

•  between VMs and their suppliers who will compete for control of distribution; 

•  between VMs and independent distribution; 

•  between  the  formerly  “franchised  dealerships”  segment  and  the  independent 

distribution and repair segments but also within each individual segment; 

•  between insurance companies. 

– 

on the consumer 

Insurers  are  in  effect  the  primary  or  immediate  consumers  in  much  of  the 
replacement parts market, in as much as the share of insurance covered by Casco, for 
the rest and the remainder of the market, end consumers pay directly for replacement 
parts. The final consumer has a direct interest in the quality of the repair insofar as it 
affects the subsequent appearance, safety and value of the vehicle. 

The  issue  of  the  safety,  quality  and  structural  integrity  of  spare  parts  are  clearly 
crucial  for  consumers.  However  design  protection  rewards  the  intellectual  effort  of 
the creator of a design and protects the appearance of the product, not its technical 
qualities.  If  the  design  of  a  bumper  is  not  protected  because  it  does  not  fulfil  the 
requirement of novelty, it does not necessarily mean that it is less safe than another 
protected bumper. Even more when the same manufacturer would produce both parts 
for the car manufacturer and for the independent or retail repairer. 

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5. 

Does the proposal contain measures to take account of the specific situation of small 
and medium-sized firms (reduced or different requirements etc)? 

The proposal does not contain specific measures for SMEs. 

CONSULTATION 

6. 

List the organisations which have been consulted about the proposal and outline their 
main views. 

As a first step in the consultation exercise, the Commission had bilateral discussions 
with the five main groups concerned with a view to obtaining a clearer picture of the 
economic issues revolving around spare parts for cars and motorcycles, in particular 
body  parts.  These  main  groups  are:  vehicle  manufacturers  (including  car  and 
motorcycle  manufacturers,  represented  by  ACEA,  ACEM,  UNICE),  suppliers 
(CLEPA), independent component producers (ECAR), insurance companies (CEA), 
and consumer organisations (AIT/FIA, BEUC, and FEMA). In order to prepare for 
these  bilateral  discussions,  the  services  of  the  Commission  drafted  a  questionnaire 
(Annex I) on the economic situation concerning spare parts for cars and motorcycles, 
and  more  specifically  body  parts.  This  questionnaire  was  sent  to  all  the  mentioned 
organisations in November 1999, responses reached the Commission by June 2000.  

Then  the  Commission  started  bilateral  discussions  with  the  mentioned  parties, 
additionally individual companies and organisations, which are represented by each 
of those groups, have been invited to attend these meetings. Meetings with ACEM, 
CLEPA, CEA, ACEA, FEMA, ECAR, BEUC, and AIT/FIA took place. 

The  results  of  this  consultation  showed  a  wide  divergence  on  the  position  of 
interested  parties,  in  particular  between  producers  of  complex  products  and 
independent producers of component parts of such complex products. 

Manufacturers of complex products consider that design protection for spare parts is 
an inevitable consequence of the Intellectual Property Right (“IPR”) concerned. The 
existence of a design right provides compensation for investment in design and also 
rewards creativity. As such it parallels other IPRs. According to this view, primary 
and  after-markets  are  not  separable,  and  to  make  any  such  distinction  would  be 
artificial  and should be  avoided in the interests of consistency in the application of 
general IPR principles. 

Independent producers of component parts of complex products, however, consider 
that  design  protection  for  spare  parts  creates  unjustified  monopoly  situations  in  the 
after-market. The prices of spare parts of equivalent quality are lower where they are 
not design-protected. They say that a limit to this IPR must be established to avoid a 
negative impact on competition, and that this is the only way to avoid manufacturers 
gaining full control over the after-market. 

In June 2003, the Commission launched an extended impact assessment study of the 
possible options to liberalise the aftermarket in spare parts. The study focused on the 
automotive sector, given the economic impact in this sector; however its conclusions 
and subsequent harmonisation at European level are applicable to any sector where 

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replacement  and  repair  of  complex  products  occur.  The  Commission  received  the 
final report end of November 2003. 

The following interested parties were consulted: 

•  ACEA, 

the  European  Automobile  Manufacturers  Association  (collective 
interview, contact: M. Greven); 2 meetings were organised with representatives of 
ACEA’s members 

•  Michel  Aribard,  Jean-Paul  Blin,  French  Ministry  of  Economy,  Finance  and 

Industry 

•  Gabriel de Bérard, President, FEDA, Fédération des Syndicats de la Distribution 

Automobile 

•  Ralf Bergner (Chief Executive), Lars Homqvist (Vice-President), Ad Ham (Chair 
of  Aftermarket  Working  Group  &  Managing  Director  Automotive  Europe  of 
Bosal NV), Clepa, European Association of Automotive Suppliers 

•  CCFA, le Comité de Constructeurs Français d’Automobile (contact: N. Mignotte 
&  H.  Perreau);  1  meeting  was  organised  with  representatives  of  the  French  car 
manufacturers 

•  Miguel  Angel  Cuerno,  ANCERA  (Associación  Nacional  de  Comerciantes  de 
Equipos,  Recambios,  Neumàticos  y  Accessorios  para  Automóviles)  independent 
Spanish parts distributors 

•  Carlo Dellacasa, ANFIA (Italian National Association for Automotive Industry), 

Components group 

•  Isabelle  Fourrier  (Legal  Counsel)  /  Menno  Schönlank  (Marketing  Director, 

Aftermarket Activity), Valeo 

•  Renatto  Gallo,  ASCAR  (Italian  Association  of  producers  and  sellers  of 

independent spare parts for cars) 

•  Philippe Gaultier, Marketing director, Plastic Omnium 

•  Jack  Gills,  Executive  Director,  the  Certified  Automotive  Parts  Association 

(CAPA), USA 

•  Sylvia Gotzen, Secretary General, Figiefa, International Federation of Automotive 

Aftermarket Distributors 

•  Sabine  Gluthe  (Intellectual  Property  Management)  /  Karl-Heinz  Hinz  (Quality 

Management) / Gerhard Bauer (Chief Trademark Councel), DaimlerChrysler 

•  Teresa  Herrero,  ANFAC  Asociacion  española  de  fabricantes  de  automoviles  et 

camiones 

•  Jean-Louis Marsaud, Director, Comité Européen d’Assurances 

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•  Martin McGreavy, Sales & Marketing Manager, EV (parts wholesalers) 

•  Jacques  Monnet  (Chief  Executive)  /  Christian  Boure  (General  Secretary),  Fiev, 

the (French) Federation of Automotive Suppliers 

•  Miguel  Angel  Obregon,  Sernauto,  the  Spanish  association  of  component 

manufacturers for the automotive industry 

•  Gerhard Riehle, ECAR Campaign Coordinator 

•  Peter Roberts, Chief Executive, Thatcham 

•  Louis  Shakinovsky  (Legal  Director)  /  Katherine  Marshall  (Senior  Group  Legal 

Counsel)/ Marcus Schmidt (Strategy Development Manager), Belron 

•  Brian Spratt, Chief Executive, Automotive Distribution Federation (UK) 

•  Marie-Pierre Tanugi-de Jongh, Directeur, A+Glass 

•  Roger Thomas, Vice President, Aftermarket Operations Europe, Pilkington AGR 
(UK)  Ltd.  Also  member  of  the  Groupement  Européen  des  Producteurs  de  Verre 
Plat’s Aftermarket working group. 

•  Victoria Villamar Bouza, Legal Officer, BEUC Bureau Européen des Unions de 

Consommateurs 

•  Martin Wiedermann, Automotive Lighting 

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