Why Your Beliefs About Right To Repair May Be Wrong
By Mike Conlon
As Americans, we assume a lot and take even more for granted. For example, we assume that absent natural disasters we will have sufficient water and electricity for our needs and that the telephone will always work. We also assume that if we buy a piece of land and record the deed, that our ownership of that land will be uncontested. However, behind our blasé acceptance of these things as the natural order, there are complex legal and practical rules and concepts that support the system and allow us to "assume" a right without further thought.
One right that we take for granted is the "right to repair". Whenever we purchase a mechanical or electrical piece of equipment, be it an automobile, a toaster or vacuum cleaner, we expect to be able to have it repaired when it breaks down. This assumption relies upon several other assumptions, i.e., that there is a fairly adequate supply of spare parts; that service technicians have adequate knowledge to repair the equipment; and most of all, that no one can legally prevent us from repairing the equipment. However, the latter is not always true. In fact, for many legal reasons a manufacturer can, and sometimes does, prevent its products from being repaired.
Most rebuilders have run into this problem at least once. The manufacturer won’t supply the spare components to rebuild the part and won’t authorize another company to make them. Or the manufacturer won’t provide the training or information necessary to allow the repair to be made.
The ability to prevent repair (including rebuilding, which is really a sophisticated form of repair) arises from the rights the manufacturer has in the product under intellectual property law, that is, laws regulating patent, copyrights, trademarks and trade secrets. These intellectual property rights are given so that those who develop unique ideas or techniques can benefit economically by exploiting those ideas or techniques without freeloaders using this knowledge to make an unjustified windfall.
Most intellectual property rights are universally accepted. However, problems can arise after the sale of a product. At some point the manufacturer’s right to exploit his new product must give way to the customer’s right to benefit from his purchase of the product, by using it, and when necessary, having it repaired.
Underlying the right of repair is the legal concept of "exhaustion" of the patent rights of the manufacturer in the product. A patentee’s rights are exhausted when he has no further right to control the future sale and use of that article. Exhaustion normally occurs when there is an unrestricted sale of the product. Therefore, because the patentee’s rights are exhausted, the customer (and any later purchasers from the customer) can use the product in any way he wants without violating the patent. This use includes having the product repaired.
Exhaustion doesn’t occur if the product is not sold but merely licensed, as are many computer programs. A manufacturer may also impose reasonable restrictions on the use of a product after sale which prevents its rights from being fully exhausted. If exhaustion doesn’t occur, the manufacturer can control who uses the product; whether it can be repaired or reused; and who can do the repair.
Recently, a Federal court in Washington, D.C. further tried to limit the concept of exhaustion in a way that, if followed, would affect the ability of American companies to rebuild products produced and first sold outside the United States. This case, Jazz Photo Corporation vs. International Trade Commission, involves reusable cameras, but applies to all products.
In a decision which is not supported in any way by previous statutory and case law, the court held that the U.S. patent rights of a patent holder are not "exhausted" if the first sale of the patented product occurred outside the U.S. Thus, if a shipment of auto parts were purchased in Canada, Mexico or Europe from the manufacturer and imported into the U.S., the manufacturer would still have all its patent rights in those parts and they could not be repaired (or rebuilt), or even used in the U.S., without the manufacturer’s permission.
This decision not only flies in the face of established law, but also in the face of common sense. If a patent holder can prevent a product sold in one country from being used and/or repaired in another, international trade in machines and equipment would collapse.
The rebuilder in Jazz Photo is appealing the decision to the Supreme Court, and because the issue is of such importance to international trade, it seems quite possible that the Supreme Court will elect to hear the case and overturn the lower court (The Supreme Court actually hears and decides less than 5 percent of the cases it is asked to rule on each year).
But, even if the Supreme Court doesn’t elect to reconsider the issue, so many other decided cases take the opposite position, i.e., valid sale by a patent holder of a product anywhere exhausts its rights everywhere, that the case should have little application and seems unlikely to be followed by other courts. However, Jazz Photo demonstrates how precarious the right to repair is and how manufacturers and courts can make decisions which could affect the viability of the entire rebuilding industry.
Maybe even more important in the future will be the right to be able to obtain the information necessary to make the repair.
In the past, finding repair information for an auto part was sometimes difficult or even impossible. Diagnostic and repair information was not made available in any systematic fashion and hence the biggest hurdle in making a repair or rebuilding a part was locating the information.
For rebuilders, knowledge necessary to properly rebuild the part often could only be gained through reverse engineering. With the mechanical or engineering expertise available in the industry, this was usually not too large a problem.
The advent of computers has now reversed the magnitude of these problems. There is now an abundance of information available on computer and CD-ROM and it is much easier to access. However, computers have made the part (and the way it functions with other parts in the vehicle) so complex that simple repair information and reverse engineering may not be sufficient to be able to rebuild the part. Only by having some assurance that all information necessary for rebuilding a part so that it functions properly in the system will be available to those who need it, can the independent rebuilding market be sustained.
The use of computers to monitor for Clean Air Act compliance has provided one avenue to obtain information. First the Federal EPA, and more recently California, have passed laws and regulations requiring that any information necessary to repair or rebuild a part monitored by the Clean Air Act OBD system be made available to those who need it. This is a good start, but not sufficient, because these regulations only require disclosure with respect to emissions-related parts. Additional laws or regulations must be passed to guarantee disclosure of such information for all parts. Recently new legislation was introduced which would broaden the scope of required information disclosure.
The Motor Vehicle Owners’ Right To Repair Act of 2001 (H.R. 2735) was introduced in the U.S. House of Representatives by Congressman Joe Barton (R-TX) last August. It would unequivocally require that any manufacturer of a motor vehicle sold or introduced into commerce in the U.S. must promptly provide to the vehicle owner and repair facilities the information necessary to diagnose, service or repair the vehicle.
Disclosure is specifically required for information necessary to integrate replacement equipment into the vehicle and information of any kind used to diagnose, service, repair, activate, certify or install motor vehicle equipment (including replacement equipment) in a vehicle. Enforcement of the Act would fall to the Federal Trade Commission (which generally oversees fair trade laws including the regulations for marketing reused and rebuilt parts) and the FTC would be required to publish rules within 180 days to establish a uniform method to provide the information.
As this article is being written the bill has 35 Congressional co-sponsors with more being added weekly. More importantly, the co-sponsors represent every shade of the political spectrum from the deep reds of the far right to the greenest greens of ultra-left. The bill obviously has broad appeal.
It is, however, not perfect. Information could still be withheld if it is a trade secret, and nothing in the bill currently requires that any information beyond normal repair information be given to rebuilders so that parts may be properly rebuilt.
However, H.R. 2735 is a good step forward. If passed it will create a new presumption that a vehicle manufacturer cannot arbitrarily withhold information necessary for repairs for any part of a vehicle.
Efforts are being made now to introduce a similar bill in the U.S. Senate, and a public hearing on H.R. 2735, is being planned, possibly for this summer. With industry support, this bill could be enacted next year.