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House committee looks into intellectual property impact on small business

Tuesday, July 27, 2010 - 23:00

The U.S. House Committee on Small Business recently looked into the impact of intellectual property on today's small businesses, including the use of counterfeit parts. Rep. Nydia M. Velazquez, D-N.Y., chairwoman of the committee, said the hearing's purpose was to highlight the importance of protecting intellectual property and how this protection can “spur job growth.”

Several witnesses from different backgrounds, ranging from business software to motor vehicle equipment, testified at the hearing, according to information from the Automotive Service Association (ASA). William Mansfield, director of Intellectual Property for ABRO industries, testified on behalf of the Motor & Equipment Manufacturers Association (MEMA), representing companies that manufacture motor vehicle parts for use in the light vehicle and heavy duty original equipment and aftermarket industries.

“Counterfeit parts and components for cars, trucks, buses and commercial vehicles pose a critical problem to the American economy and the supplier industry because of the wide range of counterfeit products manufactured and trafficked worldwide," Mansfield says. "In the past, MEMA has estimated that counterfeit goods cost motor vehicle suppliers at least $3 billion in the United States and $12 billion globally in lost sales. Please note that the industry believes these numbers are conservative. In fact, Frost and Sullivan estimated in 2006 that the global losses to motor vehicle suppliers due to counterfeiting would be as high as $45 billion in 2011.”

Mansfield also shared comments relative to the health and safety impacts of counterfeit motor vehicle parts.

“There is a wide range of counterfeit parts and components for cars, light trucks, buses and commercial vehicles that are manufactured and distributed globally. Many counterfeit products, especially in the automotive parts industry, go undetected and are purchased unintentionally," he says. "Because trademark and brand infringement are so convincing, many times consumers or installers of these components may not be able to recognize or distinguish the genuine part from the counterfeit part. In many instances, the part manufacturer becomes aware of counterfeit products when responding to warranty claims of a failed product.

“Counterfeit motor vehicle parts may fail to meet U.S. Federal Motor Vehicle Safety Standards (FMVSS) or other industry-accepted safety standards; likewise, these parts may be produced with dangerous, inferior materials and have a shorter-than-average service life," Mansfield concludes. "Thus, the use of these counterfeit vehicle parts – such as brakes, brake pads, brake fluid, tires, belts, and automotive lighting, which look identical to genuine, brand name parts – may result in sudden, catastrophic engine failure, brake failure, or other system malfunction, endangering the car or heavy duty truck driver operating the vehicle and all motorists traveling the same roads with these vehicles.”

To view the witness list, along with the full text of the testimony, visit ASA’s legislative website at www.TakingTheHill.com.

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