October 2004
EU to grant freedom to compete in spare car parts market by removing IP protection
The EU Commission has adopted a proposal, which plans to prevent Member States from protecting design rights in spare car parts. As a result, car companies would be in competition with independent parts manufacturers. The Designs Directive allowed Member States to protect design rights in spare parts, including visible replacement parts, such as bonnets, doors, lamps, windscreens, wings and bumpers. The Commission Proposal noted the small market share of third party suppliers of spare parts and that this minority market position was particularly acute in Member States which allowed the design right to apply to spare parts. The Commission also noted the limiting effect of applying design right to spare parts on the small and medium sized enterprises that would supply third party spare parts. Another argument relied on by the Commission was that spare parts for cars are more costly in countries where spare parts are protected by design right.
BRIFFA Comment:
In the UK, unregistered design right does not apply to designs that "must fit" or "must match" other articles to perform its function. This means that unregistered design right does not apply to spare parts. Similarly, while a registered design can be used to prevent others from making complex products (such as a car) incorporating the design, it cannot be used to prevent others producing the design as a spare part. As such, the proposal of the Commission would appear to be bringing the requirements of EC law in line with UK law. Competitors in the visible spare and component parts market would be liberalised throughout the EU. Briffa believes that this may have a knock-on effect into other industries too.