Commission to move on controversial repairs clause?

European Union

The European Commission has at last published its proposed changes to the controversial "repairs clause" in the Community Design Directive. Under the commission's proposal, the directive would be amended to remove the member states' option to maintain design protection for automobile spare parts. Automobile spare parts manufacturers had accused the commission of dragging its heels over its decision to liberalize completely the spare parts market in the European Union.

The directive was adopted in October 1998 after almost five years of negotiation with the intention of harmonizing the law of designs across the European Union. The delay was almost exclusively as a result of a disagreement between the European Parliament and the Council of Ministers over the repairs clause. The parliament and the commission wanted a system for authorized reproduction of spare parts for vehicle repairs, in return for a fair payment to the vehicle manufacturers that held the rights. Quite simply the council did not.

A classic compromise was reached mainly in the form of a temporary provision under Article 14 of the directive allowing member states to act individually to incorporate a repairs clause rather than forcing them to introduce such a clause. The rest of the compromise features in Article 18. This is a revision clause that requires the commission, three years after the directive's implementation, to review the directive, particularly insofar as it affects manufacturers of complex products and component parts, and one year later to introduce any changes needed to complete the internal market in respect of component parts of complex products. The commission is behind schedule but has at last moved towards revising the directive on the basis of the proposal of Commissioner Frits Bolkestein, which had found favour with the European Campaign for the Freedom of the Automotive Parts and Repair Market (ECAR).

ECAR says that the proposal strikes the right balance between protecting innovation and maintaining free trade and competition in the European Union by giving vehicle manufacturers full protection of their vehicle designs, thus supporting their core business - the sale of new cars - while ensuring that the design protection does not extend to the corresponding spare parts. The spare parts that ECAR has in mind are 'body-integrated' visible spare parts, such as body panels, lighting and automotive glass. This represents a quarter of the spare parts market, valued at around €10 billion a year and affecting, in ECAR's estimation, 235 million consumers.

Regardless of the dispute over the directive, several member states, including the United Kingdom, already have a repairs clause. Prior to the directive's implementation in the United Kingdom by the Registered Designs Regulations 2001/3949, the United Kingdom excluded spare parts with aesthetic value, such as car body panels, from protection under the Registered Designs Act 1949. Although there is no such exclusion from registration under the act following amendment by the 2001 Regulations, the right to produce anew such parts for repair purposes is maintained by Section 7A(5). Taking the wording from Article 14 of the directive, this provision states that it is not an infringement of "a registered design of a component part which may be used for the purpose of the repair of a complex product so as to restore its original appearance" to use the design for such a purpose.

Not all member states have moved voluntarily towards liberalization and, as ECAR would argue, the market for spare parts in the European Union remains fragmented. The commission's procrastination has therefore been the source of some irritation. ECAR argues that design protection for spare parts sustains the growing tendency of car manufacturers to shift jobs to low-cost countries outside the European Union, whereas the repairs clause would allow EU-based small and medium-sized spare parts manufacturers to generate employment within the European Union.

Peter Harrison, Hammonds, London

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