20 April 2005

The Web

Insurers rally to protect spare parts from design patent

Matthew Vella

The European spare parts market will be facing a key test tomorrow when the European Parliament will vote on a report adopted by the committee for Internal Market and Consumer Protection on the exclusive design rights to cosmetic spare parts for car manufacturers, such as fenders, windscreens and other outer car parts.
Europe’s car manufacturers have lobbied successfully with the IMCO to block legislation, proposed earlier on in the Prodi commission by Fritz Bolkestein, that seeks to allow spare parts to be produced and sold by anyone, and not just exclusively by car manufacturers.
The Commission’s proposal, which was approved by the Barroso commission, seeks to adopt a Repairs Clause to amend the “Design” Directive to allow consumers to buy either original spare parts from car manufacturers, or non-original parts from independent and other licensed suppliers.
Car manufacturers have taken recourse to the Design Directive to seek protection to spare parts of their vehicles and hold exclusive design rights over spare parts.
The spare parts lobby ECAR is campaigning for the Repairs Clause to safeguard free competition by ensuring that protection over the design of cars is not extended to their corresponding spare parts, leaving consumers free to repair their vehicles as they wish and allowing licensed and independent spare parts manufacturers to supply parts to consumers.
According to ECAR, design protection on spare parts will eliminate competition and award car manufacturers a monopoly. ECAR estimates that the surcharge on consumer prices would be anything from 40 to 223 per cent on prices currently charged in the free market.
The Malta Insurance Association, which yesterday convened at the Malta Chamber of SMEs to bring the matter to the fore, is saying that consumers should be allowed to buy spare parts from whoever they wish, and not just from car manufacturers.
“At present if your car suffers damage, consumers have the right to buy the spare part required to repair it from their main dealer or an independent repairer. The part may be either the original one produced by the car manufacturer or a non-original one by an independent company. This allows competition to be retained whilst driving down prices, boost quality and promote innovation.”
Anton Felice, the MIA’s secretary-general, said the practice is already recognised by law and it does not preclude any guarantees on safety or fit. “There is a healthy competition between original and non-original spare parts. If the European Parliament and the Council of Ministers approve this report on extending design rights to car manufacturers on spare parts, it will inhibit consumer choice and create a monopoly in a market worth EUR10 billion (Lm4.3bn) across Europe.”
In Malta, the market is estimated to be worth Lm6 million. Insurance agencies already account for 50 per cent of the market, which includes spare parts for both low budgets and higher budgets. Felice said the restriction to buying spare parts just from car manufacturers could also influence an increase in premiums.


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