Legal Affairs / Sales

Design protection

The body design of modern motor vehicles is one of the most important factors in shaping a vehicle's brand image, and ultimately has a major impact on the purchase decision. Automakers are investing enormous amounts of money in the design of their vehicles, and the investment only pays off if there is a long-term return from the subsequent use of original parts in the case of an accident.

The performance of industrial sectors worldwide is based to a significant extent on a variety of intellectual property rights such as patents, utility patents, designs and trademarks. These rights not only protect the respective manufacturer but indirectly also serve the consumers' best interests, as all of these rights are crucial prerequisites for industrial innovation and thus ultimately also for economic progress.

The relaxation of design protection for vehicles parts that are visible from the outside sought by various market agents is a topic the VDIK has been dealing with for many years. Especially the representatives of the independent parts trade and independent repair shops are demanding that a repair clause, which is foreign to German design protection legislation, should be adopted in Germany. The VDIK has always opposed such endeavors and defended its position vis-à-vis the European Commission also in connection with the EU project “CARS 21". Likewise, the VDIK has also recommended to the Federal Ministry of Justice to intervene at the European level and vehemently oppose any mandatory Europe-wide repair clause, as this would ultimately legalize product piracy in this area. None of the arguments presented by the other side are valid. In particular, the value-for-money of replicate parts is by far not as good as generally maintained. In addition, there are numerous safety-related arguments that speak against the repair clause. After a lengthy tug-of-war, the European Parliament passed a new Design Protection Directive in December 2007 in a first reading. In the medium term, this new Directive will lead to a - in the VDIK's opinion - misguided liberalization resulting, in all likelihood, in the elimination of design protection for parts after the expiration of a five year transition period. Contrary to some predictions, this result - which, incidentally, was not welcomed equally by all members of the European Parliament - will not lead to lower consumer prices for spare parts, as the example of Great Britain shows where the market has been liberalized and yet spare parts are significantly more expensive than in Germany with its existing design protection regulations.

The proponents of the repair clause, who are hoping that repairs would become cheaper for the consumer, will be disappointed for the following reasons.

First of all, only 5 percent of all vehicle components are body parts that are visible from the outside and as such eligible for design protection. And of these 5 percent, it is estimated that only half are registered as design patents and most of them only for a few years. This low percentage of maybe 2 to 2.5 percent alone already shows that any exaggerated expectations of a noticeable reduction in repair costs are an illusion. In addition, replicate parts often have a less precise fit. This may cause the repair to take longer, quickly offsetting any potential savings on the price of the odd part. In addition, it is an undeniable fact that especially in the auto body area, a not insignificant number of replicate parts are clearly inferior in quality compared to the OEM parts, for instance when it comes to the materials' resistance to aging, rust-proofing etc. As a result, even if the price of a repair were to be lower in the odd case, it would quickly turn into a bad deal for the consumer if one looks at the value-for-money objectively. This was proven by studies from both DEKRA and Allianz Zentrum für Technik (AZT) who examined auto body repairs. AZT is opposed to using replicate parts in accident repairs on passengers cars because it does not generate any savings.

Moreover, AZT - an institution that represents the insurance industry who is interested in minimizing repair costs - pointed to an important aspect of repairs with replicate parts, namely safety concerns. It mentioned, in particular, the endangerment of other road users, especially pedestrians. Crash safety and pedestrian protection are topics that are becoming increasingly important in the engineering of modern motor vehicles. Terms such as "EuroNCAP-Crash" and pedestrian-friendly design of body parts in the front area of the vehicle are talked about all the time, including within the European Commission. It is, however, obvious that safe vehicle design depends to a large extent also on the materials used and the precise fit of the body parts - one only needs to think about the shatter resistance of plastic bumpers, or the plasticity of front panels. The enormous efforts undertaken by the auto industry worldwide to improve road safety through engineering and design will be undermined if in the future, such parts can be replicated without any restraints and without there being any mechanisms to ensure that such parts will not adversely affect road safety. This, however, is precisely what AZT has proven in the example of plastic bumper covers, which in many cases shattered much more easily than the original parts, especially at lower temperatures.

If one takes into account the often inferior quality of the replicate parts and the additional labor required in their installation, the total costs of the repair are often not significantly lower than in case of a repair using OEM parts. In those cases where the original parts are indeed more expensive than replicate parts of the same quality, one should not forget that the automaker is required to have all parts in stock. Unlike independent parts dealers, they cannot focus only on lucrative parts with a fast turnover. This requires car manufacturers to do a little cost shifting in their calculations in order to prevent the cost of repairs with rarely needed parts from becoming exorbitant. If the car manufacturer is deprived of this profit margin through the introduction of a repair clause any parts not offered by independent parts dealers will have to go up sharply in price. Overall, this does not advance the cause of consumer protection.

Where some maintain that without the repair clause, car manufacturers have a monopoly that impacts the independent parts dealers in their economic existence, this line of argumentation is unconvincing and can be disproved simply based on the low total volume of protected body parts in the overall parts market. Moreover, the margins of independent parts traders are often far bigger than those in the auto industry. This is not really surprising, though, given that the manufacturer and dealers of replicate parts save the enormous development costs invested into automobile design by the international automotive industry, which ultimately must be reflected in the price of vehicles and vehicle parts. In order to make sure that safety aspects are taken into consideration, the European Parliament is planning to readjust the EC type approval and dictate spare parts to undergo more rigorous safety inspections. This means that independent parts dealers, too, will incur higher costs, which might even lead to an increase in prices.

The VDIK will intensely monitor the further legislative process at the European level and the subsequent implementation of the expected directive into German law, and will join in the debate advocating for the legitimate interests of our member companies, which go largely hand in hand with the true interests of consumers.

In summary, the VDIK opposes the mandatory introduction of a repair clause throughout Europe, which would ultimately only lead to a legalization of product piracy in this area.