Current Issues and Positions of APRA - January 2009
by Michael Conlon, APRA Legal Counsel

A. Promotion of Remanufacturing

1. Use of Remanufactured Products for Energy Efficiency and Conservation

History: Recycling efforts and efforts to promote energy efficiency have focused on reusing the raw materials in products headed for the trash heap, ignoring the energy that could be saved if the finished product could be reused.

APRA Position: Legislation and regulations at both the federal and state levels should promote the reuse of spent products, not only to recycle the materials that originally were used to create the product but also to conserve the energy which was originally used. Remanufacturing is more energy efficient than materials recycling because it takes less energy to remanufacture a spent product that currently exists than to create that same product from recycled materials.

Status: As a result of efforts by APRA and other remanufacturing associations and companies, more legislators and government officials have become aware of the energy benefits which can be obtained from greater remanufacturing. APRA will continue to promote this benefit of remanufacturing whenever the opportunity arises.

What You Can Do: Nothing at present.

2. Grants for Remanufacturing Research and Development

History: Because the benefits of remanufacturing were not widely recognized, the overwhelming majority of government and business grants for research and development for reuse of spent products have gone to projects to recycle the raw materials from those products.

APRA Position: Government and industry should provide more funding for research and development of remanufactured products and the science of remanufacturing, especially in the form of grants to the National Center for Remanufacturing in Rochester, New York.

Status: APRA is promoting funding for remanufacturing R&D at every opportunity.

What You Can Do: Look for funding opportunities for remanufacturing in your own areas and give APRA any information you uncover.
 

B. Small Business Issues

1. Affordable Health Insurance for Small Businesses

History: The increasing cost to employers of providing health insurance for their employees is an even greater burden for small businesses than for large ones. Small firms' plans are usually subject to state regulation and their smaller policy groups mean that they pay an average of 18% more for the same coverage as larger firms. More favorable Federal rules and larger groups over which to spread the risks allow larger corporations and unions to pay less.

APRA Position: APRA supports enactment of legislation which would allow trade, industry and professional associations to sponsor health care plans for their members throughout the US. These plans would be Federally regulated, would allow aggregation of the risks and would therefore reduce premiums.

Status: In 2003, 2004, and 2005, the US House of Representatives passed the Small Business Health Fairness Act which would have allowed associations to establish health care plans for their members subject to the Federal ERISA statute. A similar act was introduced in the House in 2007 but no action was taken on it by either the House of Representatives or the Senate.

In April, 2008, Senator Richard Durbin of Illinois introduced the Small Business Health Options Programs (SHOP) Act (S 2795) which also would create greater health insurance options for small businesses. An identical bill, HR 5918 was introduced in the House. Neither of these bills was acted on.

Currently no similar bills have been introduced in the new Congress, but one bill the Small Business Empowerment Act would establish a national risk pool for small businesses with participating insurers acting under Federal supervision.

What You Can Do: Send a letter to your Representative and to your two Senators demanding that Congress pass legislation to decrease the health insurance burden on small businesses.
 

C. Taxation

1. Federal Investment Tax Credit for Purchase of Equipment Used in Remanufacturing

History: Currently no special incentives exist in the Federal tax code to promote remanufacturing.

APRA Position: APRA supports enactment of an investment tax credit for the purchase of new equipment by remanufacturers to stimulate more remanufacturing.

Status: Last year at the request of APRA, Congressman Phil English of Pennsylvania introduced H.R. 5659 which would allow a credit against the
Federal income tax each year for up to $10 million of the cost of recycling and remanufacturing equipment. The credit would apply to the purchase of new equipment (previously used equipment does not qualify) used in the business of rebuilding or remanufacturing but only if the rebuilt or remanufactured part produced includes 50% or less new parts or material and the equipment is not used primarily in a process occurring after the product has been rebuilt or remanufactured. The bill did not pass and unfortunately Congressman English was not re-elected. APRA will seek another member of Congress to re-introduce this legislation.

What You Can Do: Nothing at present.
 

D. Environmental

1. Access to Required Information in Connection With On-Board-Diagnostic Systems

History: U.S. – 1994 and later light duty vehicles are required to be equipped with on-board-diagnostic (OBD) systems to monitor the performance of emissions related parts and to detect any part failure or malfunction which could create an emissions problem. The same law requires that information in the OBD system or otherwise necessary to use it to diagnose, repair, monitor and service the vehicle be provided to those who service such vehicles.

EPA issued its revised OBD information rule in 2003. It is very similar to the one issued by California. EPA’s rule currently applies to automobiles, light duty vehicles and heavy-duty trucks less than 14,000 lbs. GVW.

California: California mandates that all OBD information for light duty vehicles be made available on an accessible Internet web site. The rule also requires vehicle manufacturers to provide service technicians and parts manufacturers and rebuilders certain necessary information to ensure that repairs can be properly and economically performed and that aftermarket and rebuilt parts function properly with the OBD system. The regulation also requires that information necessary to repair an emissions-related part, as well as diagnostics and reprogramming tools, be provided to those who need them. Because of this regulation, much previously unavailable information is now available. However, information deemed by the manufacturer to be a trade secret may still be withheld, but procedures exist to challenge such a claim.

California also applies its OBD information access rules to heavy-duty vehicles. These rules apply starting with model year 2007. The final heavy-duty rule is similar to the rule for automobiles; however, there are several significant differences. Currently, for heavy duty applications, aftermarket entities will only have the right to purchase emissions-related diagnostic tools and then only if they are made available to the manufacturer’s dealers or authorized service networks. Starting in 2013, the OEM’S will have to make available to the aftermarket all enhanced diagnostic, recalibration and reconfiguration tools available to their franchised dealers or authorized service networks. However, if the manufacturer requires that its dealers receive training before they can purchase the tool, it can require that aftermarket facilities undergo similar training before they can purchase the tool. In 2013, the OEMs will also have to provide generic tool manufacturers with the data stream and bi-directional control information used in the OEMs' proprietary tools so that the generic manufacturers can incorporate this information into their tools; however, the manufacturers do not have to provide such information if it could be used to modify an approved California engine configuration. The service information which has to be provided for heavy duty engines is also limited. Only information for parts which control emissions or are associated with the engine system need to be provided. Specifically excluded is information related to the transmission. This is much more limited than the automobile information rule which, in addition, requires that information associated with the power train system (including transmissions) and any part likely to impact emissions also be provided.

APRA Position:  All information necessary to allow a parts manufacturer or remanufacturer to design and produce a part which will be perceived by the OBD system as functioning properly must be provided by the vehicle manufacturer. In addition, information required to service the emissions-related parts of the vehicle must be timely and economically provided to aftermarket service facilities. Aftermarket diagnostic tools must be economically available to independents and have the same capabilities as those of the vehicle manufacturers. Aftermarket service personnel must also have the ability to have the vehicle’s computer reprogrammed if required to make the repair. These rules should apply to all vehicles, including heavy-duty road vehicles.

Status: US – In December, 2008, EPA released a pre-publication version of its final OBD regulation for larger heavy-duty on-road vehicles. The rule is very similar to the California rule in that it limits the information to be provided to that dealing with the engine and related systems and places certain limitations, including training requirements, on the acquisition of OE diagnostic tools. Most parts of the rule will take effect for model year 2010 vehicles but some of the provisions regarding access to the manufacturers diagnostic and scan tools do not take effect until the 2013 model year.

While most of the rule was what we were expecting, the engine manufacturers did talk the EPA staff into adding language which would appear to void the emissions warranty for any vehicle or engine that was not serviced by the manufacturer or its dealers. This language clearly violates the Clean Air Act and APRA has brought this to the attention of the EPA staff. They have acknowledged that they did not intend that result and will issue a clarifying letter and an amendment to the regulation to correct the problem, However, it may be necessary for APRA and our allies AERA and AAIA to file an appeal in court to protect our rights.

What You Can Do: Advise APRA if you encounter problems getting OBD information or if your products are being rejected by OBD equipped vehicles.
 

2. Performance Warranties

History: Historically, environmental groups and some regulators have tried to enact laws to require that the vehicle manufacturers provide long-term warranties on the emissions-related parts of their vehicles. These warranties have always been opposed by the automotive aftermarket because they force the return of the cars to franchised dealerships for repairs (both for emissions and non-emissions related parts). Currently the warranty provisions are:

• U.S.: Catalytic converter, ECU, OBD device – 8-years/80,000 miles - All other emissions related parts – 2-years/24,000 miles
• California: Repairs to parts costing over $510 (as of FY 2008) –7-years/ 70,000miles – All other emissions related parts –3-years/50,000 mi

California also adopted provisions requiring an 8-year/100,000 mile warranty on emissions-related parts costing over $510.00 (as of FY 2008) in certain situations and a 15 year/150,000 mile warranty on all emissions related parts in certain situations as part of a rule requiring automakers to meet a new durability standard. APRA opposed this rule but was unsuccessful in stopping its implementation.

APRA Position: Opposes increasing the length of any warranty.

Status: U.S. – There is no current activity at the Federal level.

Under California law, if more than 4% of a particular emission’s part fails on California vehicles during the emissions warranty period, CARB can take action against the manufacturer to correct the problem. Up to the present time, the normal corrective action was to require a recall of those vehicles to replace the defective part. However, in December, 2007 a new CARB regulation became effective which allows vehicle manufacturers an option to provide an extended warranty for any such part rather than face a recall. CATF had opposed this regulation when it was proposed and tried to work out a compromise with CARB that would have allowed the warranty option but permitted aftermarket facilities to perform the warranty work during any extended warranty period. The CARB staff rejected this compromise. The association members of CATF, including APRA, filed suit in Superior Court in Los Angeles, California alleging that the action allowing an extended warranty under these circumstances was beyond the legal authority of CARB and was not supported by any evidence that an extended warranty would reduce emissions. The suit asked the court to compel CARB to rescind the rule and to enjoin CARB from enforcing it. Unfortunately, during the past month the court rejected the CATF appeal. However, the Engine Manufacturers Association had also appealed the same rule but on other grounds. Its appeal was successful. The court ordered that the regulation be rescinded. Whether CARB will amend and reissue the regulation to deal with EMA’s issue is presently unknown. CATF is now considering whether to appeal the court’s decision.

Several other states, including Florida, are considering legislation or regulations which would adopt the California regulations on extended warranties for certain types of vehicles. APRA is monitoring these efforts.

What You Can Do: Nothing at present.


3. Vehicle Scrappage (Clunker Laws)

History: California and other states have proposed vehicle scrappage as one program to help them comply with their clean air attainment goals. However, outside of California, only Illinois, Oregon and Texas have established vehicle scrappage programs. Only California has established guidelines for a vehicle scrappage program for heavy-duty vehicles.

APRA Position: Vehicle scrappage, especially programs aimed solely at older vehicles regardless of their emissions, does not provide clean air benefits, is often at least as expensive as cleaning up smokestacks and discriminates against lower income motorists and those who live around polluters who do not clean up their own pollution. Any scrappage program should allow recycling and reuse of all parts of the scrapped vehicle. Emissions related parts should be rebuilt before being reused to assure proper functioning.

Status: California continues to look to scrappage of automobiles to solve certain pollution problems. The California Bureau of Automotive Repair has a repair or retirement program for older vehicles which offers $1,000.00 to an owner to retire an older vehicle. CARB also adopted regulations which would allow funds available in its Carl Moyer grant program to be used to finance automobile and heavy duty vehicle replacement programs. (The Carl Moyer program was however, also amended to allow its funds to be used for vehicle repair programs.) Any vehicles purchased in a replacement program using Moyer funds have to be destroyed and only parts which are both non-emissions related and non-drive train parts can be reused.

As a result of the current economic problems and the automobile manufacturer’s bailout, Congress has begun to look at vehicle scrappage as an economic stimulant and to promote the purchase of new cars. Companion bills (S247 introduced by Senator Diane Feinstein and HR 520 introduced by Representative Steve Israel) titled the “Accelerated Retirement of Inefficient Vehicles Act of 2009” would authorize money to pay for the scrapping of certain older automobiles. Any automobile dealer, dismantler or scrap recycling facility could issue a voucher in payment to any person who turned in a vehicle manufactured before 2008 for which the certified mileage was 18 miles per gallon or less. The voucher would be worth between $1500 and $5500 towards the purchase of another vehicle or the cost of public transportation. The amount of the voucher would depend upon the age of the vehicle scrapped, whether the voucher is used to purchase a new or used vehicle or for public transit. All vehicles purchased under the program would have to be crushed or shredded but all parts of the vehicles could be salvaged for use as replacement parts except for the engine block and the drive train. APRA is working with SEMA, AAIA and others to oppose these bills.

What You Can Do:  All members should write their Congressmen opposing theses scrappage bills. Members in California, Texas, Oregon and Illinois should write their state legislators or the state EPA opposing scrappage programs. Members in other states must alert APRA headquarters if they hear of any proposal to implement scrappage in their state.


4. Promotion of State Inspection and Maintenance (I/M) Programs

History: Periodic inspection of vehicles in clean air nonattainment areas has been required at the state level. Vehicles failing these inspections are required to be reinspected and either to demonstrate compliance at reinspection or an expenditure of a prescribed amount by their owner on emissions-related repairs. Starting in 2002, states started to include inspection of OBD systems in their I/M programs for newer vehicles, and EPA has agreed that inspection of OBD systems may now replace tailpipe inspections. Inspection of heavy-duty vehicles has lagged behind automobiles, but at least sixteen states test the opacity of the smoke from these vehicles and require repairs if it is too dirty.

APRA Position:  APRA supports a national vehicle emissions inspection program as the best, least expensive and most efficient way of assuring that excess emissions from in-use vehicles are detected and corrected. Doing so will help attain clean air and global warming goals. It also supports safety inspection programs. Both emissions and safety inspections will help motorists to obtain better vehicle performance and may detect problems before they get worse.

Status: There is some indication that these inspection programs will get a boost from those wishing to address global warming because vehicle emissions are high in CO2, a global warming gas. However, currently both EPA and the states oppose expansion of automobile emissions testing programs, except for inspection of OBD systems. Both EPA and the states support greater smoke testing of heavy-duty vehicles. California has stated that it will use OBD systems to identify heavy-duty vehicles which violate Clean Air standards.

What You Can Do: Nothing at present.


5. End-of-Life Legislation for Vehicles

History: The European Community has end-of-life regulations which require that a minimum of 85% of a vehicle must be recovered for reuse. The regulations impose this recovery obligation on the vehicle manufacturer not the consumer.

APRA Position: Any end-of-life legislation must allow for the full availability of cores, should not discriminate against independents and should not promote the early retirement of vehicles.

Status: Nothing is pending in the US. APRA is monitoring.

What You Can Do: Nothing at present.


6. Asbestos Claim Legislation

History: The volume and size of asbestos litigation has severely hurt those industries involved in the production and use of asbestos products including companies which remanufactured and installed asbestos brakes, clutches and other products.

APRA Position: The liability and exposure of companies, especially small companies, who were involved in providing motor vehicle products which contained asbestos must be limited.

Status: The Fairness in Asbestos Injury Resolution (FAIR) Act was introduced in both houses of Congress in 2005. The bill would have established an Office of Asbestos Disease Compensation in the Department of Labor to handle all claims for asbestos related injuries. It would also have established a fund out of which to pay all asbestos claims and created a formula to determine the contribution each asbestos defendant would have to make to the fund. It also would have established the procedures for handling and paying claims. All pending asbestos claims would have been stayed except those already in trial and the fund would have been the exclusive source of compensation for all stayed and future claims.

The Act would also have required the Office of Asbestos Compensation to issue regulations to ban the use of all asbestos within two years from the date the bill was enacted. Under very limited circumstances, some uses of asbestos could have been exempted from the ban. Neither the Senate nor the House passed the bill.

No similar bill has been introduced since.

What You Can Do: Nothing at present.


7. Use of Asbestos Friction Materials in Brakes and Clutches

History: APRA actively opposed EPA measures which would have prevented the rebuilding of some brakes and clutches because they used asbestos friction products. EPA backed down on this issue and asbestos friction products may still be disassembled and rebuilt and asbestos friction material may still be used in rebuilding in cases where the original product used asbestos material. OSHA workplace rules on asbestos which would have imposed unworkable restraints on rebuilders were challenged and eventually modified or clarified to meet rebuilders’ concerns.

APRA Position: Controls on the use of asbestos or other friction materials must not prevent the remanufacturing of brakes, clutches or transmissions or make remanufacturing of those products uneconomical.

Status: On October 4, 2007, the US Senate passed a bill, the Ban Asbestos in America Act of 2007 (S.742), which would require the EPA to issue final regulations within two years after the bill is enacted to ban the manufacturing and importing of asbestos products and to require a person, except an end user, who has asbestos products still in commerce to dispose of such products. The bill was sent to the House of Representatives but no action was taken on it.

To the best of our knowledge, neither EPA nor OSHA is considering any further controls on asbestos which would affect remanufacturers.

What You Can Do: Nothing at present.
 

E. Government Procurement

1. Removal of Impediments to Federal, State and Local Government Procurement of Remanufactured Products

History: Government contracting officers were often precluded from buying remanufactured parts because the applicable procurement guidelines did not include them or they did not meet specifications. Other times the contracting officer himself may have a prejudice against using them. Because of APRA, GSA modified its procurement regulations to allow use of remanufactured parts in most situations. After lobbying by APRA, in 2004 EPA issued amendments to its recovered material standards for government procurement to allow Federal agencies to give preference to remanufactured parts when procuring motor vehicle parts.

APRA Position: Remanufactured parts should be given preference in government procurement because of the environmental benefits of remanufacturing. There should be no impediments to their procurement.

Status: Nothing at present.

What You Can Do: Advise APRA if you learn of any restrictions placed on procurement of rebuilt goods by any governmental body.
 

F. Intellectual Property Issues

1. Removal of Trademarks from Remanufactured Items

History: In the United States, remanufacturers do not have to remove or cover up the original manufacturer’s trademark when selling a remanufactured part as long as the fact that the part was remanufactured and the name of the remanufacturer are clearly identified on the part. This rule was established by the Champion Spark Plug case in the Supreme Court and confirmed in the Federal Trade Commission rebuilt parts guides. However, in many other areas of the world the local laws could be construed to require removal of the trademark.

APRA Position: The American rule on this issue should be adopted worldwide.

Status: APRA’s European Division monitors any cases in Europe where an OE demands that its trademarks be removed from remanufactured goods. In December 2006, in a case that affects the entire European Union, the German Supreme Court decided that a company did not have to remove the original logo from a part it was remanufacturing as long as the part was clearly marked with the remanufacturing company’s logo.

What You Can Do: Advise APRA if you should hear of any attempts to have a remanufacturer remove the original manufacturer’s trademark prior to sale of the remanufactured part.

2.  Right to Repair, i.e., Remanufacture

History: Controversy over whether remanufacturing is legally permissible repair or improper reconstruction of patented products was resolved in the Dana case in favor of repair, even if the remanufacturing is done on a production basis. This decision allows remanufacturing to continue outside of the control of the OE. But it may not apply where the manufacturer also obtains a patent on a component needed to remanufacture the part.

APRA Position: Support the Dana case and extend its applicability.

Status: In late November, 2007, APRA joined with other remanufacturing associations to file a friend of the court brief in the US Supreme Court opposing efforts by a software owner to impose after sale restrictions on the use of its products. LG Electronics, Inc. sued Quanta Computer, Inc and other computer manufacturers alleging that the manufacturers’ use of Intel chips which included LG software violated LG’s patent rights because, by agreement with Intel, LG had restricted the use by Intel of its software to chips used in Intel products. The purpose of LG’s agreement with Intel and it actions against the manufacturers seems to be to get additional patent royalties from the manufacturers. However, the legal issue is whether the rights of a patent holder terminate at the time of sale of the product or whether it can impose post-sale restrictions on the purchaser of the product. Since the early 20th century, US patent law has held that a patent holder’s rights are “exhausted” at the time of the first sale of the product and that after that the purchaser is free to use, resell or repair the item in any way it wishes. This purchaser “right to repair” is the cornerstone of the remanufacturing industry. However, if LG’s position, i.e., that it can impose after sale restrictions on the use of its software had been upheld, any patent holder could effectively dictate how, when and where its products could be used, repaired and reused and the rights which consumers now have in the goods they buy could be severely curtailed. By extension, such a decision could severely limit to what extent goods may be remanufactured.

On June 9, 2008, the Supreme Court unanimously rejected LG’s extended patent claims. Writing for the Court, Justice Thomas stated “The authorized sale of an article that substantially embodies a patent exhausts the patent holder’s rights and prevent the patent holder form invoking patent law to control post sale use of the article.” By so holding the Court has emphatically confirmed the right to repair patented items.

Remy International had sued Dixie Electric in the US District Court in Nevada alleging that Dixie’s remanufacturing of certain Remy products violated Remy’s patents. In September, 2008 the court granted summary judgment in favor of Dixie and determined that Dixie’s refurbishing of automotive alternators was not an act of infringement but constitute permissible repair. The judge said, “When remanufacturing both the CS130D alternator and the PG260 starter, Dixie only uses new parts to replace irreparable ones if the part I unpatented. If the damaged part is patented, Dixie merely replaces unpatented subcomponents; otherwise, it swaps a functioning patented component from another core, which as the property owner it has the right to do.”

What You Can Do: Report to APRA any situation where a manufacturer uses patents to prevent remanufacturing of its products.


3. Intellectual Property Restraints on Information Necessary To Rebuild

History: Control of most parts by the vehicle’s computer and/or individual computer chips will give the vehicle manufacturer more opportunities to prevent independent manufacture or remanufacture of the part. For example, the vehicle manufacturer could claim certain information in the computer as proprietary and not subject to disclosure even though the information may be essential for determining how the part must operate in the system. This has happened with emissions-related information under Clean Air Act.

APRA Position: All information necessary for remanufacturing parts so that they function properly within any computer systems on the vehicle should be made available to remanufacturers.

Status: In 2007, Congressman Edolphus Towns of New York reintroduced the Motor Vehicle Owner Right to Repair Act as HR 2694. The new bill is a substantial improvement over the 2005 version. It reinserts the language which would require the vehicle manufacturers to provide the “information necessary to access and integrate replacement equipment into the motor vehicle” and states the information must be available to all service providers. The bill would also have allowed the state attorneys general to file suit to prevent violation of the law whereas the 2005 bill only allowed the FTC to do so. The bill was not considered in the last Congress. No similar bill has yet been introduced this year.

On October 27, 2008 the New Jersey Assembly passed a Right to Repair Act which requires manufacturers to provide all information necessary to diagnose, service or maintain a motor vehicle, including information necessary “to integrate replacement motor vehicle equipment into the motor vehicle”. This bill should be considered by the New Jersey Senate this spring.

The Massachusetts House considered a right to repair bill but did not take any action on it.

What You Can Do:  If you live in one of the states where a bill is pending, promote the bill with your state representatives. You can also send a message to your representative showing support for the bill by going to www.careauto.org and clicking on your home state.

4.  Design Patents

History: In the early 1990’s attempts were made to change the U.S. design patent law to allow such patents to be issued more readily to protect the design of car body parts and internal parts. This effort was defeated. In Europe, after much debate, the European Parliament adopted a new design patent directive which does not place restrictions on the internal parts of the vehicle.

APRA Position: Design patents should not be allowed on internal vehicle parts.

Status: In the fall of 2006, in testimony before a Congressional subcommittee, an employee of Bendix proposed that Congress consider extending intellectual property protection to industrial designs. He stated that protecting the original designs of articles incorporated into braking systems of heavy trucks would reduce the potential for consumer confusion and benefit highway safety. No such bill has been introduced in the present Congress. APRA is continuing to monitor this situation.

What You Can Do: Let APRA know if you hear of any attempts to promote changes in the design patent law.

5. Anti-Counterfeiting Legislation

History: In the past anti-counterfeiting law allowed for goods bearing a counterfeit mark to be forfeited and destroyed if a defendant was convicted of a counterfeiting offense. But the law did not allow the forfeiture of the proceeds of counterfeit goods (or goods bearing a counterfeit mark) nor the equipment used to make them.

APRA Position: All legitimate action should be taken to prevent the importation and sale of counterfeit goods and goods bearing counterfeit marks in the US.

Status: In 2006, the Stop Counterfeiting in Manufactured Goods Act became law. It allows forfeiture and destruction of goods bearing counterfeit marks if the owner is convicted of an offense under the counterfeiting law. It also allows for forfeiture of the proceeds from the sale of counterfeit goods and the equipment used to make them if the party is actually convicted of a counterfeiting offense.

What You Can Do: Nothing at present.


6. Trade Marking of Part Numbers

History: Historically, the US Patent and Trademark Office will not allow a company to trademark its part numbers because those numbers generally
provide information on the use, grade or quality or the part and not its origin or ownership.

APRA Position: The US government should not allow any parts numbers to be trademarked.

Status: Webb Wheel Products, Inc., a manufacturer of brake drums, is claiming that it has obtained US trademarks on its part numbers to stop the use of its numbers by other manufacturers, which use was causing confusion in the marketplace.

Remy International filed four lawsuits against remanufacturers in Nevada which include allegations that the defendants have violated Remy’s common law and registered trademarks, not only by using Remy’s trade names and logos but by using certain part numbers in their marketing and advertising of non-Remy originating parts. In conversations with Remy’s legal department, their counsel claimed that certain numbers they used on their parts were actually the descriptive name for the part and not just a part number. Therefore, he says that they can claim trademark protection for those parts. However, he also said that Remy would not consider the use of those numbers in advertising, if used merely as a reference to those Remy parts which the non-Remy parts can replace, a violation of Remy’s rights in the number. Remy would only claim a violation of its rights if the part number was being used to identify the advertised parts as Remy parts rather than replacement or remanufactured parts or if somehow the number was used to imply that non-Remy parts were Remy parts.

In the spring of 2008, Bendix Commercial Vehicle Systems sent letters to several heavy duty remanufacturers claiming that their use of Bendix model designations (not part numbers) in their advertising and marketing of remanufactured products violated trademarks which Bendix had in those products. Bendix and the remanufacturers have settled their claims.

If trademark protection is granted for part numbers, it should have more of an impact on the manufacturers of new replacement parts than on remanufacturers because the Champion Spark Plug case would allow remanufacturers to use the part number on remanufactured parts which are largely the reused product of the original manufacturer. However, as the Remy cases indicate, such claims could cause problems for remanufacturers. Therefore, we will continue to monitor those cases and the issue in general.

What You Can Do: Advise APRA if you hear of any manufacturer who is claiming a trademark on its part numbers.