Car rules review risks property-rights battle

Date: 01/03/01

By Laurence Frost

THE European Commission faces a new legal battle over intellectual property rights if it carries out plans to force carmakers to share diagnostic software used for repairs.

Manufacturers say they may take on the EU executive if it follows consumer groups' recommendations when it revises the block exemption that currently lets them draw up exclusive selling contracts with dealers. The influential consumer lobby BEUC is working with a network of car supermarket entrepreneurs, Internet car merchants and spare parts dealers to produce a joint position by the end of the month.

A working draft calls for legislation obliging carmakers to make equipment and software available to all car repairers - not just ones affiliated with dealers - under 'reasonable and non-discriminatory terms'.

"It amounts to an obligation to give up intellectual property rights," said Marc Greven of the European carmakers' group ACEA. "If it went as far as this we'd have to look at the few other cases where compulsory licensing like this is in place, and see if it was justifiable."

The consumer lobby says more than just competition is at stake in the debate over access to repair equipment. "For us it is first and foremost a question of safety," said BEUC economics advisor Dominique Forest. "Electronics are more and more widespread in car design - it would be impossible for repairers to service cars effectively without access to the equipment."

But some industry-watchers are sceptical about the case for compulsory licencing.

"Given the fact that none of the manufacturers is in a dominant position I don't see how they would swing that one," said Mike Pullen of the law firm DLA, which handles intellectual property. "If they go down that road I think the carmakers will probably try to challenge it in the European Court of Justice."

BEUC also wants to stop manufacturers from restricting car dealers to just one brand of car. The group is also calling for an end to discretionary bonuses - the system of preferential discounts offered to certain dealers.

A report adopted by the Commission last November found that the block exemption - which expires at the end of next year - had prevented consumers from benefiting from the EU single market.

The European Commission faces a new legal battle over intellectual property rights if it carries out plans to force carmakers to share diagnostic software used for repairs.