Washington — In testimony delivered to the U.S. Patent and Trademark Office, the National Association of Mutual Insurance Companies (NAMIC) joined with other property/casualty insurance trade associations in expressing strong concerns about litigation that would use patent laws to prohibit competitive auto repair parts.

“We are concerned that ongoing legal proceedings involving a novel application of design patent rights would harm our members’ policyholders by increasing auto repair costs, which would necessitate higher insurance costs,” wrote NAMIC in the testimony. “We believe these legal proceedings could establish precedent that could virtually eliminate competitive aftermarket repair parts from the marketplace.”

The issue is the case Ford v. Keystone, now pending in the U.S. Court of Appeals for the Federal Circuit. According to NAMIC, if successful, sheet metal or plastic exterior body parts—referred to as aftermarket parts, crash parts or generic parts—could be eliminated from the marketplace. If only body parts produced by original equipment manufacturers could be used, repairs costs and, ultimately, insurance costs, could increase, NAMIC explained.

“It would eliminate a low-cost option and necessitate that all repairs utilize more expensive OEM parts,” the testimony said. “It has been estimated that competitive aftermarket parts are currently priced 34% to 83% lower than the comparable OEM parts.”

Source: National Association of Mutual Insurance Companies

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