Supreme Court Decision Delivers Victory For Aftermarket

Supreme Court Decision Delivers Victory For Aftermarket

The Supreme Court upheld the legal precedent of patent exhaustion, which states that a company’s right to protect its patent ends when the product is sold to the end user.

In a major victory for the auto care industry, the Supreme Court upheld the legal precedent of patent exhaustion, which states that a company’s right to protect its patent ends when the product is sold to the end user. Information from an amicus brief submitted to the Supreme Court by the Auto Care Association was used by Chief Justice John Roberts Jr. in reversing the Federal Circuit decision that would have been damaging to the manufacture and sales of aftermarket parts.

The case, Impression Products Inc. v. Lexmark International Inc., involved the ability of Lexmark to restrict purchasers from reusing their printer cartridges or providing the used cartridges to anyone other than Lexmark. The Federal Circuit case determined patent holders can retain rights after sale as long as the restrictions on use are clearly communicated.

“While the case applied to printer cartridges, the impact of the Federal Circuit decision would have been extensive, restricting the ability of companies to produce and sell aftermarket and remanufactured parts based on the fear of violating a car company’s patent,” said Bill Hanvey, president and CEO, Auto Care Association.

If upheld, the Federal Circuit decision would have provided patent holders with extensive power over how consumers repair and maintain the vehicles that they own. Understanding this impact, Roberts used the following analogy in the Supreme Court ruling:

“Take a shop that restores and sells used cars. The business works because the shop can rest assured that, so long as those bringing in the cars own them, the shop is free to repair and resell those vehicles. That smooth flow of commerce would sputter if companies that make the thousands of parts that go into a vehicle could keep their patent rights after the first sale. Those companies might, for instance, restrict resale rights and sue the shop owner for patent infringement. And even if they refrained from imposing such restrictions, the very threat of patent liability would force the shop to invest in efforts to protect itself from hidden lawsuits. Either way, extending the patent rights beyond the first sale would clog the channels of commerce, with little benefit from the extra control that the patentees retain. And advances in technology, along with increasingly complex supply chains, magnify the problem.”

“This important decision is clearly a victory for the consumer and for the independent auto care industry, which provides motorists with an affordable, convenient and effective alternative to the vehicle manufacturers’ parts and service network,” said Hanvey.  

You May Also Like

Auto Care Association Launches REPAIR Act Video

The goal is to emphasize the need for federal REPAIR Act legislation, according to the Auto Care Association.

Right to repair 2

The Auto Care Association launched a new Right to Repair video campaign, featuring independent repair shop owners from across the United States share their stories and shed light on the increased challenges independent repair shops are facing with accessing repair data to service their customers’ vehicles. 

The video campaign emphasizes the need for the Right to Equitable and Professional Auto Industry Repair Act (“REPAIR” Act), which ensures vehicle owners and repair shops have access to tools and data needed to keep cars and trucks on the road safer, longer.

Maryland Teamsters Call for Passage of HB 1447

The legislation would protect middle-class jobs and motorist safety, according to the International Brotherhood of Teamsters.

Maryland Teamsters Call for Passage of HB 1447
$78B Pro-Business Tax Bill Passes House, Awaits Senate

The bill aims to reinstate tax incentives for R&D and small business investments, along with other measures.

MANN+HUMMEL NA Aftermarket Shows Right to Repair Support

Representatives from MANN+HUMMEL’s North American aftermarket brands recently visited Capitol Hill to express their support for H.R. 906.

MEMA Issues Statement on Tax Relief for Working Families Act

This measure contains the restoration of one year deductibility of research and development expenses, a key legislative priority for the association.

Other Posts

MEMA Q1 Webinar to Feature Wedbush Analyst Seth Basham

The webinar is scheduled for 1 p.m. ET on March 13.

Seth Basham MEMA
New Sponsorship Opportunities for Auto Care Connect

Auto Care Connect, taking place May 5-8 in downtown Chicago, annually brings together professionals from across the auto care sector.

Auto Care Connect
National Auto Body Council Welcomes Empire Auto Parts

Empire operates from 39 locations throughout 24 states in the eastern U.S. with an inventory of more than 48,000 SKUs.

National Auto Body Council Welcomes Empire Auto Parts
Auto Care Association Certified as a Great Place to Work

“This prestigious award is a testament to the association’s commitment to creating an inclusive, supportive and dynamic work environment for its employees,” Auto Care said.

Auto Care Great Place to Work