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This Design Protection Bill Needs Remodeling


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THIS DESIGN-PROTECTION BILL NEEDS REMODELING

It's tough to argue with the idea. U.S. copyright law, crafted in the 19th century, simply can't protect the work America's industrial designers do today. So why not enact a law to stop the pirates who clone original designs and sell shoddy knockoffs to an unsuspecting public?

That's the concept behind the Design Innovation & Technology Act. With the support of its chief sponsor, Majority Leader Richard A. Gephardt (D-Mo.), as well as Minority Leader Robert H. Michel (R-Ill.), the legislation has been advancing in the House Judiciary Committee. The bill, which would give designers 10 years of patent protection, has gained bipartisan support based on claims that it would restore American jobs and balance trade accounts while rewarding consumers with higher-quality goods at lower prices.

But the Gephardt bill has mutated into something far less benign. Because the measure is so broad and ambiguously worded, what began as an effort to safeguard American designers has instead pitted the makers of autos, trucks, and farm and construction equipment against insurance companies and the independent vehicle-parts industry. The result could mean higher prices for everything that the bill designates as "designed," from furniture to pharmaceuticals to fenders.

`TAIWAN TIN.' Take a look across the Potomac River, at Tony's Auto Service in Alexandria, Va. Owner Tony Damiani fears that the design act would hand a monopoly to carmakers and their original-equipment manufacturers. The last time he priced an electric fuel pump, the local Chrysler dealer wanted $262. A virtually identical replacement was $161 at an independent distributor. "This bill would force us to deal only with the dealership," says Damiani.

"Not true," replies Bruce Lehman, the attorney for a lobbying group called the Design Coalition, which drafted much of Gephardt's legislation. Among the members: U.S. auto and truck manufacturers, Caterpillar, furniture makers, the National Association of Manufacturers, the AFL-CIO, and the American Bar Assn. He insists the bill, once properly amended, will specifically exempt generic internal parts for autos and light trucks.

But there's a catch. What the Design Innovation & Technology Act would stop, even its proponents agree, is the flood of "Taiwan tin," inexpensive parts such as fenders, bumpers, and quarter panels that replace originals damaged in collisions. The Big Three and the United Auto Workers--two constituencies long favored by Gephardt--want to see that market controlled by the car companies exclusively.

DEEPLY FLAWED. To the U.S. auto insurance industry and consumer groups, that is folly. Clarence M. Ditlow, a former patent examiner who now runs the Ralph Nader-founded Center for Automotive Safety, says the auto companies are merely responding to increased competition. "There is no inventiveness in the design of a muffler or a fender," Ditlow scoffs. "This is a blatant attempt to eliminate competition in the marketplace and to assess the buyers for the cost."

The design act would be deeply flawed even if internal car and light-truck parts were exempt. Parts for large trucks and farm and construction machinery would still be covered. That would award original-equipment makers an advantage that only the marketplace should confer. If Tony Damiani installs shoddy fuel pumps, he'll lose customers. And if a foundry in Taiwan or Toledo can build a bumper that's as good as Detroit's for half the price, Detroit will lose customers--as it should. If Congress really wants to protect leading-edge design work, it can write a narrowly focused bill that won't let U.S. companies hide from competition.

Commentary by Paul Magnusson


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