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Auto Parts Patents Will Raise Repair Costs

Discussion in 'General Discussion' started by hacon1, Mar 3, 2008.

  1. hacon1

    hacon1 Monkey+++



    Auto Parts Patents Will Raise Repair Costs

    With automakers patenting more parts to enhance dealers' service and repair revenues, the knockoff business is taking a big hit.

    By Jim Ostroff, Associate Editor, The Kiplinger Letter
    February 29, 2008

    The patenting of more run-of-the-mill auto part designs is roiling small body shops, many of which make their living by fixing cars with knockoffs of original equipment parts such as grilles, hoods, lights, mirrors, side panels and fenders. Such pieces are anywhere from 10% to 50% cheaper than the real McCoys, but increasingly, the law forbids their use.

    Automakers have long sought patents on certain extra-stylish ornamentation to prevent other automakers from cribbing the design for their vehicles.

    But the trickle of patent applications has become a torrent in recent years as automakers seek to boost their bottom lines by patenting more parts, thus bolstering their auto repair and parts replacement businesses. Ford, for example, has patented seven parts on its popular F-150 pickup truck, including lighted mirrors and the front grille. Honda has been the most aggressive, receiving about 110 design patents last year, followed by 75 for Ford and 60 for Toyota.

    As the restrictions on replacement parts grow, it's a good bet that automakers will increase their share of the $16-billion parts replacement business in the U.S. Large independent repair shops that contract with car dealers or automakers and can get volume discounts on patented parts will also benefit.

    However, small shops -- and consumers -- increasingly will get squeezed. Small collision repair businesses will have no choice but to pay full cost for the parts and pass along those higher prices to their customers. People paying for their own repairs out of pocket will feel the pain first.

    Parts makers can't sidestep the patent protections, either, by making a hood or door panel that looks similar to the original. "The dilemma is that most states' laws dictate that repair shops use parts that look exactly the same as the original and be of the same quality and fit," says Eileen Sottile, executive director of the Quality Parts Coalition, a trade group.

    Over time, the design patent avalanche is sure to dent business for small shops. Moreover, as overall repair costs rise, insurers will tag more banged-up vehicles as total losses, reducing repair work. Insurance companies also will increase auto insurance premiums to cover their added costs.

    Look for the auto parts industry to step up a push to persuade Congress to pass a law letting independent parts manufacturers sell replacement parts to repair shops. Automakers would retain the right to sue competitors that copy a part design for their vehicles. The prospects for such legislation would increase with Democrats strengthening their hold on the House and the Senate, as we expect.
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  2. SeptemberMage

    SeptemberMage LaMOE Monkey

    Welcome to the world of Microsoft. Maybe the next generation of automobiles will force you to validate the VIN everytime you start the car. I love American Freedom... Hopefully eventually all ingenuity can be stamped out, then we can all march in step... Bleat... Bleat... Bleat...
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