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Thursday, 26 July 2012 17:49

Non-OEM Parts Industry Meets to Discuss Patent Law Change

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Non-OEM versions of many more vehicle parts could be manufactured and available much sooner after a new vehicle model is introduced if backers of proposed changes to federal patent laws are successful.

An update on the legislation being pushed by the Quality Parts Coalition (QPC) was among the topics at the recent Automotive Body Parts Association (ABPA) convention, held in Vancouver, British Columbia.

Eileen Sottile of the QPC urged the aftermarket part manufactures and distributors attending the conference to contact Congress to support the coalition’s legislation (HR 3889), which would reduce the time automakers can use design patents to prevent other companies from producing replacement crash parts. Sottile said the bill would reduce the patent protection from 14 years to just 2.5 years, and the 2.5-year clock would start ticking when the automaker introduces the car, even if that vehicle introduction is in another country months before it is introduced in the United States.

Sottile said the QPC wanted to eliminate all design patent protection on the parts, as called for in earlier bills it introduced in Congress, but settled for a 2.5-year moratorium because Rep. Darrell Issa (R.-Calif.), who is sponsoring the bill in the U.S. House, “felt very strongly that we had to find a balance between protecting intellectual property and allowing competition.”

She said a sponsor is being sought to introduce a similar bill in the Senate. Although one has not yet been announced, the QPC has recently announced that three more members of Congress have signed on as co-sponsors of the House bill. Reps. Bill Cassidy (R-La.), Walter Jones (R-N.C.) and Dennis Ross (R-Fla.) are now supporting the bill.

At the ABPA event, Sottile outlined how the QPC’s monthly lobbying and public relations budget of about $70,000 is being funded. LKQ Corporation has donated $3.7 million, she said. The ABPA has contributed $1.5 million, mostly through an optional $50 fee that some ABPA members voluntarily contribute for each shipping container of non-OEM parts they ship or receive. Other major contributors include Nationwide and State Farm ($115,000 each), the Automotive Aftermarket Industry Association ($99,000), Allstate ($92,000) and AutoZone ($60,000).

Certification program update
Also speaking at the ABPA event, Bob Frayer of NSF International, said his organization has certified about 1,800 non-OEM parts, and is adding about 100 parts a month to that list. Launched in 2010 with the backing of the ABPA, the NSF parts certification program is in part a response to unhappiness within the non-OEM parts industry with the time and expense involved with having parts certified through the 25-year-old Certified Automotive Parts Association (CAPA) program.

Frayer acknowledged that most of the NSF-certified parts are bumper-related parts, the first category for which NSF offered certification, but he said NSF is now certifying non-OEM plastic, sheet metal and lighting parts as well.

He said EMC Insurance, Farmers, Grange and USAA are among the insurers calling for the use of NSF-certified parts.

“We’re continually talking to insurance companies, and hopefully as the program grows and we have more part in the program, you’ll see more insurers writing NSF parts,” Frayer said.

Unlike the CAPA certification program, NSF does not require that its labs conduct the actual testing of the parts; NSF merely audits that the parts manufacturer has had testing done by a qualified facility. But Frayer said NSF subsequently pulls 25 to 30 individual parts out of the distribution stream each month for testing at NSF.

“We expect by the end of this year to have over 250 parts that we’ve actually tested at NSF,” Frayer said. “If we do see problems with parts, those testing numbers will increase. We’ll be testing more parts if we see any indication that there’s something less than what was (initially submitted and)certified and being supplied to the market.”

Frayer was asked at the ABPA event how it develops the specifications that determine whether a part earns certification.

“The basis for the certification is always the OE (original equipment) service part,” Frayer said. “The OE service part is the standard with which we use to measure the aftermarket part.”

Frayer said a committee, which includes parts manufacturers, determines acceptable tolerances for deviations from the OEM service part.

“Because we can measure the OE service part and find, for example, it has a yield strength of ‘x’ or an tensile strength of ‘y,’” Frayer said. “The question is: What kind of tolerance would seem reasonable to put around those numbers. So the (non-OEM) manufacturers help provide the initial guidance with that. But I can tell you what happens is as we go forward, we start testing parts. We start seeing how much variation we see in the OE parts. And that gives us a pretty good indication of whether the tolerances that we initially applied (for non-OEM part certification) are appropriate or not. I can tell you without exception the tolerances that our manufacturers have given us and worked with us to develop up front are as tight or tighter than what we’re seeing in the OE service parts.”

OEM replacement part is the standard
Frayer said NSF uses OEM replacement parts – rather than those originally sold on the vehicle – as the standard because it has found examples of variation between OEM replacement parts and the original parts. He cited an example of bumper absorbers for a Ford Mustang.

“What we found was there was a huge difference between the OE part and the OE service part,” Frayer said. “It’s obviously a change made by the manufacturer. The vehicle was introduced with one set of requirements for the absorber, and then they changed to a different set (of requirements). Our thinking is that, generally speaking, the OE service part represents what the manufacturer’s latest thinking is as to what is needed for that vehicle.”

Frayer said NSF has not received a single verified complaint about a certified part.

“We’ve had three complaints to date that I’ve been made aware of,” Frayer said. “One complaint was due to some shipping damage. One was a part that was actually shipped to the body shop as a certified part but as it turned out it was not a certified part. And the third one was a part that reportedly did not fit the application. We were not able to get the part back. But through some pictures that we received, we were able to verify the lot number of the part. We acquired another part from that same lot, put it on a vehicle and verified that it did fit. So we were not able to verify that there was a problem with that part.”

Frayer said anyone with concerns about a NSF-certified part can notify him directly through NSF’s website (www.nsf.org), or “there should be some indication on the part or packaging itself who you would contact relative to a complaint.”

Frayer said the problem of shops receiving a non-certified part when a certified part was ordered is something NSF’s parts distributor certification program is designed to address. Separate from the parts certification program, the distributor certification was launched last year. Three companies – LKQ Corporation, PartsChannel, and most recently Michigan-based Micro Platers and Paint – have earned the NSF distributor certification, and Frayer said about a half-dozen other distributors are in “various stages of discussion with NSF regarding getting certified.”

A certified distributor can sell any parts, whether those parts are certified (by NSF or CAPA) or not. A distributor can be certified, however, only if it (among other requirements) picks up return parts from customers within two business days (for customers serviced daily); has a system of tracking returned parts confirmed to be defective; evaluates on a case-by-case basis reimbursement of a shop for labor associated with the sale of a defective part; and has a tracking and recall procedure to support a manufacturer’s recall of safety-related parts (hoods, lights, radiator supports and bumper parts). One of the keys to the distributor certification program, Frayer said, is ensuring that distributors have a system in place to ensure that a non-certified part is not substituted when a certified part is ordered.

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