LKQ Urges Ruling on GM Design Patents After CCC Request To Remove Aftermarket Parts

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Following a CCC request in March to remove several parts offered for sale on the platform, LKQ asked a federal court to rule that its aftermarket parts do not infringe three design patents from General Motors.

LKQ’s lawsuit last week also asks the Northern District of Illinois to find that one of those patents – a hood – and three other separate design patents be dismissed as invalid.

The US Patent Office allows companies to apply for design patents protecting the appearance of an invention. These are distinct from utility patents, which protect the function of an invention.

General Motors has posted on www.genuinegmparts.com a 62 page list of part numbers that represent either patented design parts, parts that are in patented design assemblies, or assemblies that contain a patented design part.

“Certain GM collision parts are protected by US design patents,” GM wrote on Genuinegmparts.com. “This means that the unlicensed manufacture, use and / or sale of a copyrighted part could violate a GM design patent. This is important to know because using non-OEM parts on newer Chevrolet, Buick, GMC, or Cadillac vehicles could violate a GM design patent.

LKQ’s lawsuit says it had licensed the right to copy many GM designs and paid royalties to do so under a confidential design patent license agreement. He alleged that GM unilaterally requested a change in terms while the contract was still in effect – and then complained of breach to the CCC.

“Further, despite the fact that GM and LKQ were in the midst of direct negotiations regarding a revised DPLA, with the aim of undermining LKQ’s business relationship and pressuring LKQ to agree to unfair license terms, GM sent correspondence to a third party making unsubstantiated allegations that certain auto parts sold by LKQ and listed on the third party’s vehicle parts platform – the Certified Collateral Corporation (‘CCC’) platform – infringed certain patents of GM’s design, ”LKQ wrote in its lawsuit.

According to LKQ, GM attorney Angela Caligiuri on March 1, 2019 asked the CCC to withdraw “certain aftermarket parts that it said infringed approximately 250 different GM design patents, including parts sold by LKQ.” .

Caligiuri’s letter asked the CCC to remove dozens of many allegedly counterfeit parts if they were sold by anyone other than GM or LKQ, whose licenses it acknowledged. But she also called for dozens of other parts to be removed if offered by anyone other than GM, calling them unlicensed for LKQ and everyone else.

“It has recently come to my attention that products infringing certain intellectual property of GM are made available for insurance valuation on your platforms,” she wrote. “In particular, certain aftermarket vendor products that you list alongside GM’s products infringe GM’s registered design patents. Although your promotion of these counterfeit products may have been unintentional, this letter is intended to signal that GM is opposed to this promotion.

The LKQ lawsuit says it authorized the parts it was accused of forging and “paid royalties under the DPLA for those parts.”

LKQ said GM returned to CCC with a PowerPoint presentation in December 2019 listing parts that CCC should not allow on its systems.

“In particular, on the basis of information and belief and on the basis of the assumption that CCC’s subsequent request for LKQ to remove certain parts (discussed below) included all parts allegedly forged by GM to this By then in March 2020, only four of the approximately 250 patents originally claimed by GM in the March 2019 assertion were included in GM’s latest assertion, ”LKQ wrote.

A March 4, 2020 letter to LKQ from CCC requests the aftermarket parts distributor to remove several LKQ part numbers linked to seven GM design patents.

“CCC respects intellectual property (‘IP’) rights and expects suppliers participating in CCC parts to ensure that their parts do not infringe design patents,” wrote Joseph Allen, senior vice president of CCC auto services. “Comparing LKQ Corporation parts to GM patented parts, it appears that your company sells aftermarket / non-OEM parts that are on GM’s patented parts list. Exhibit A identifies a few examples of aftermarket / non-OEM parts in LKQ Corporation inventory for which GM claims there are no licensees for their design patents.

“Please remove these and all other parts for which the applicable design patents have not been licensed by GM.” Please implement corrective actions in your upstream supply chain processes to avoid offering parts that infringe the rights of the intellectual property owner. If you believe your parts do not infringe GM’s design patents, please provide details that can be shared with GM or contact General Motors directly.

The CCC and GM correspondence states D818 903, a hood which the Genuinegmparts.com listing is found on 2017-20 GMC Acadias, and D803 731, a grille which the listing claims appears on 2017-19 Acadias, not to carry any LKQ license. LKQ says it is licensed to produce both.

“Since starting to offer parts for sale corresponding to the 903 patent, LKQ has correctly paid royalties to GM under the terms and conditions of the LKQ-GM DPLA,” LKQ wrote. “GM has never rejected the royalties paid by LKQ or objected to the payment by LKQ of royalties on parts corresponding to the ‘903 patent.”

LKQ said a similar situation occurred with the D803,731 patent – it paid royalties and GM took them.

Thus, according to LKQ, there was no violation.

LKQ also claims that no infringement has taken place on the design patent D812,532 – a hood for the 2017-2020 Chevrolet Traxes – because the version sold by LKQ is too different. (LKQ told us Thursday that their role matches that of GM production part, which he says differs from the patented design.)

However, LKQ also argued that the Trax hood patent should be completely rejected with design patents D786,743 (a lower grille for Cadillac XT5 2017-19), D824,825 (a hood for Buick Regal 2018- 20) and D840, 285 (a grille for Chevrolet Camaro 2019-21). They are “anticipated or obvious from the prior art and claim to cover an unpatentable subject,” LKQ wrote.

Companies generally don’t comment on pending litigation, and GM made no comment on Monday when we asked if it had a response to the LKQ lawsuit.

However, the OEM could be supported by recent victories against LKQ in the Patent Trial and Appeal Board, as well as Ford’s recent victories in Federal Court in a design patent litigation involving the spare parts industry.

On July 11, 2019, a three-judge panel of the Federal Court of Appeal ruled that Ford deserves design patent protection on a hood and headlight and could prevent members of the Automotive Body Parts Association from selling imitations. The ruling upheld a court ruling in the U.S. Eastern District of Michigan.

Earlier this year, the Supreme Court declined to consider ABPA’s appeal.

The similar Ford v. New World et al, remains on appeal to the Federal Circuit Court of Appeals. Pleadings are scheduled for June 4 at 10 a.m.

Ford had accused aftermarket parts distributor New World International and its fellow defendants Auto Lighthouse Plus and United Commerce Centers (both linked to New World) of selling auto parts that infringe Ford’s design patents.

On March 12, 2018, North Texas District Judge David Godbey approved Ford’s motion for summary judgment for infringement on functionality and exhaustion. Ford said Godbey’s summary judgment was pending a jury decision on the disability. On November 16, 2018, a jury ruled in Ford’s favor on 13 counts of willful auto body parts forgery and awarded the OEM $ 493,057. Ford also claimed and earned items such as $ 2,108,672.50 in attorney fees and $ 41,721.60 in profits in April 2019.

For its part, the PTAB on April 16 rejected LKQ’s requests for post-grant examination of GM patents D847.043, a rear bumper for large pick-ups 2019-2020 and D847.703, a rear bumper. rear shocks for large pickups 2019-21. On May 5, he refused a similar request to review the D841 532, a front fascia molding on the 2019-2020 Chevrolet Blazers. On Monday, he refused the examination after issuing patent D840 306, a hatchback for the 2019-2020 Chevrolet Silverados.

The PTAB also rejected, on April 16, a request for between the parties Review of the D811,964, a front fairing for the 2018-20 Chevrolet Equinoxes.

Other LKQ-GM cases are still at issue before this body.

Repairers will note an interesting dispute in the case of the Equinox fascia and at least one of the post-grant review attempts: Who constitutes an “ordinary watcher”?

According to the Supreme Court in 1871, “if, in the eyes of an ordinary observer, paying the attention that a buyer usually gives, two designs are substantially the same, if the resemblance is such as to deceive such an observer, the ‘prompting to buy one assuming it is the other, the first patentee is violated by the other.

LKQ argued that the ordinary observer would be “the retail consumer of vehicle front bumpers”. GM argued that “the ordinary observer includes commercial buyers who purchase a replacement bumper to repair a customer’s vehicle, such as repair shop professionals.”

The PTAB said GM had offered “arguments and credible evidence as to why the ordinary observer would be a repair shop professional,” but ultimately called it moot. “Our analysis, however, achieves the same result using either party’s definition of the ordinary observer,” the PTAB wrote.

More information:

General Motors aftermarket parts list with design patents

General Motors, april 2020

Pictures:

LKQ has stated that this General Motors grille design patent – which is found on the 2017-19 Cadillac XT5s – should be declared invalid. LKQ provided this image of GM’s design patent in its May 6, 2020 lawsuit. (Provided by the U.S. Northern District of Illinois)

LKQ argued in a May 6, 2020 lawsuit against General Motors that GM’s patented design hood on the 2018-2020 Buick Regals is too similar to the hood on the 2011 Buick Regal. This graphic is from the litigation. (Provided by the U.S. Northern District of Illinois.)

This composite of a Patent Trial and Appeal Board compares LKQ’s annotated view of a GM front fairing design patent to a 2015 Ford Edge and a design patent covering the fairing of a Ford Edge 2015. The PTAB felt that GM’s patent was sufficiently distinct from the others. (Provided by the Patent Trial and Appeal Board)

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