Professor Joshua Sarnoff covers protecting the consumer patent law right of repair

Introduction: The Need for the PARTS Act. Legislation is needed to protect the patent law consumer repair right for exterior, non-structural, non-safety-related exterior collision repairs for motor vehicles. Automobile exterior collision repair parts (repair parts) are the largest and most important aftermarket for consumer products. For decades, a robust competitive aftermarket for repair parts existed, supplied by Original Equipment Manufacturers (OEMs) and non-OEMs. This aftermarket has allowed consumers to choose to repair the original appearance of their motor vehicles with less-expensive, non-OEM repair parts, and has thereby resulted in billions of dollars of savings while helping to minimize insurance premiums. However, the recent granting to and assertion by OEMs of partial-product design patents for repair parts now threatens the repair parts aftermarket, and the valuable consumer and insurance savings that have resulted.

History and Theory of Design Patents on Parts and Fragments. Utility and design patents have been obtained for many years on parts of larger, functional products. Since 1980, design patents also have been obtained on fragments of parts of such products that are sold to the public. These “partial-product” and “fragment” design patents are the result of Patent Office and court activism to expand design patent subject matter since 1842. They are not the result of legislative authorization of such design patents. Specifically, Congress has authorized patents only for things that are “useful in themselves,” and for design patents only for the overall appearance of “articles of manufacture.” Congress has not authorized design patents for parts of such functional articles, much less for “machines” or for their parts. Congress also has not authorized patents for fragments of parts, notwithstanding an appellate court precedent in 1980 that has led to widespread patenting of designs for parts of useful products and for fragments of such parts.

The Patent Law Consumer Repair Right and Partial-Product Design Patents. The patent law consumer repair right exists because of the patent law “exhaustion” doctrine. Under that doctrine, the original purchase (the “first sale”) of a product embodying a patent exhausts all patent rights as to that particular product. The first sale thereby creates an unrestricted ownership right in the purchasing consumer, who may repair the purchased product when it becomes damaged or worn. On May 30, 2017, in Impression Products, Inc. v. Lexmark Int’l, Inc., the U.S. Supreme Court explicitly reaffirmed that patent exhaustion cannot be avoided or overridden by contractual restrictions imposed on the first sale by the patent holder. Further, the Supreme Court focused in dicta specifically on the right to have purchased motor vehicles repaired free from the patent holder’s continuing control, after a patented motor vehicle is sold. Partial-product and fragment design patents effectively override the exhaustion doctrine, by prohibiting repairs of parts when the exhaustion doctrine would permit repairs of overall purchased motor vehicles that embody those parts. Legislation is therefore needed to preserve the consumer repair right and the aftermarket for repair parts for legitimate exterior repairs to the original appearance of motor vehicles that embody such partial-product or fragment design patents. After all, consumers have already paid patented prices to purchase their motor vehicles.

A complete copy of Professor Joshua Sarnoff's paper is viewable here.

Excerpt taken from Protecting the Consumer Patent Law Right of Repair and the Aftermarket for Exterior Motor Vehicle Repair Parts: The PARTS Act, S. 812; H.R. 1879, 115th Congress written by Professor Joshua Sarnoff​​.​