A campaign by auto parts manufacturers to add a repair exemption to patent law has reached a dead end as lawmakers turned reticent and companies keep a low profile while battling a litany of lawsuits from international automakers.
The association of companies took their case to the legislature on Aug. 31, arguing that a “right to repair” clause is essential to create an “open and fair environment” for Taiwan’s aftermarket auto part industry.
Lawmakers seemed amenable to the proposal during the hearing, with Democratic Progressive Party (DPP) Legislator Tsai Yi-yu (蔡易餘) suggesting a time limit for patent validity.
However, support appears to have dried up over concern that an exemption might affect Taiwan’s chances of joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
Taiwan’s auto industry is not large, especially compared with the powerful automakers in Japan and the US, a DPP legislator said on condition of anonymity.
The maintenance waiver might thrust Taiwan into deep water during trade negotiations, they said, adding that “opening a new battlefield is inadvisable” right now.
Chinese Nationalist Party (KMT) Legislator Lee Guei-min (李貴敏), a patent attorney, said that the Patent Act (專利法) is complex and should be revised only after careful review.
“Patents are subject to territorial jurisdiction, so an exemption issued in Taiwan might not apply outside of the nation,” Lee said. “It is therefore necessary to consider whether manufactured parts violate a patent outside of Taiwan, otherwise even a change to local law might not exempt manufacturers from litigation elsewhere.”
Taiwanese firms are the world’s biggest suppliers of aftermarket replacement auto parts, at the highest estimates providing more than 90 percent of all non-glass replacement parts on the market.
The approximately 3,400 companies, including 52 that are listed, employ about 150,000 people, industry insiders estimated.
Aftermarket auto part makers are also a frequent target of patent litigation, including in Europe and the US.
The latest lawsuit against a Taiwanese firm was filed in a California court in May by Hyundai Motor Co and Kia Corp, which accused TYC Brother Industrial Co and its US subsidiary of using patented headlight and taillight designs.
In a similar case ongoing since 2019, Daimler claims that Depo Auto Parts Industry Co infringed on the German firm’s patent rights by making headlights compatible with certain Mercedes-Benz vehicles.
At the hearing, Hu Shan Autoparts Inc chief executive officer Y.C. Chen (陳映志) said that an exemption clause would not stop all the lawsuits, but it could help prevent excessive litigation while conforming with international trends.
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