Chairman Goodlatte: Today’s hearing will look at design protection to determine whether amendments should be made to the law to limit protection for component parts of automobiles.

Chapter 16 of the Patent Act allows an inventor a design patent for any new, original, and ornamental design for an article of manufacture.

However, the chief limitation on the patentability of designs is that they must be primarily ornamental in character.

If the design is dictated by the performance of the article, then it is judged primarily functional and ineligible for design patent protection.

Combined with the cost of patenting, this explains why some inventors, including car companies, have traditionally filed for relatively few design patents. However, auto manufacturers assert that automotive suppliers 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.

There has been a recent increase in the number of applications for design patents for individual parts of vehicles. This has raised the ire of those who work in the automotive aftermarket parts industry. Independent garage owners fear they will go out of business if the Patent Actis used by the auto manufacturers to obtain design patent protection for more and more individual parts rather than for the design of the car as a whole. Insurers worry that the cost of insuring vehicles will increase for consumers if manufacturers aggressively assert these rights because there will be less competition for replacement parts.

The aftermarket parts industry argues that we cannot afford to maintain the legislative status quo on patent designs. It argues the auto manufacturers are filing more design patents under current law to reap more profits, meaning the independent garages could lose a war of attrition.

Representative Issa has introduced H.R. 1057, better known as the PARTS Act. While the bill does not prevent auto makers from patenting designs on replacement parts, it greatly reduces the time period during which they may sue competitors for patent infringement from 14 years to 30 months.

Today we will weigh these competing interests and the consequences of establishing the precedent of creating an exemption to design patent law. I remain open-minded on this issue and look forward to the testimony that we will receive.

I think we have a great panel assembled today and I look forward to hearing from all of our witnesses.

For more on today’s hearing, click here.