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LKQ Takes GM To Court Over Part Design Patents

LKQ Takes GM To Court Over Part Design Patents

LKQ Corporation has begun legal proceedings against General Motors over the infringement and validity of collision repair part design patents on 6 May in a US district court.

LKQ says it has a Design Patent License Agreement (DPLA) with GM that includes parts with design patents, and that while LKQ has a license agreement to sell its own versions of GM parts and pays royalties for it, LKQ is alleging that GM demanded changes to the license agreement and also tried to get LKQ parts removed from electronic parts ordering platforms to pressure the company.

“Where the relationship between the parties was once amicable, GM stopped acting in accordance with the expectations of the parties when they entered into the DPLA, and the course of conduct in the years immediately after entering into the DPLA,” the complaint claimed.

“In the middle of the licensing period, GM also issued a unilateral demand to alter the terms of the DPLA. Further, notwithstanding the fact that GM and LKQ were in the midst of direct negotiations regarding a revised DPLA, in an effort to undermine LKQ’s business relationships and pressure LKQ into agreeing to unfair licensing terms, GM sent correspondence to a third party making baseless allegations that certain automotive parts sold by LKQ and listed on the third party’s vehicle part platform, Certified Collateral Corporation’s (CCC) platform, infringed certain GM design patents.”

The complaint also said that GM’s March 2019 letter to CCC included a list of approximately 250 replacement parts that allegedly infringed GM design patents, including parts sold by LKQ. GM was contacted by LKQ about the allegations contained in the letter, but further communications by GM to CCC continued including LKQ parts in the list of parts it stated were infringing its design patents.

LKQ said it received a letter from CCC on 4 March 2020 identifying over one dozen LKQ parts that GM claimed were violating its design patents. LKQ included the CCC letter as an exhibit with its complaint, which asked LKQ to remove the parts from its system but ended with a statement that read: “If you feel your parts do not infringe on GM design patents, please provide specifics that can be shared with GM or contact General Motors directly.”

LKQ’s complaint claims it does not infringe three of GM’s design patents as they are covered under its license agreement with GM and that four others should be declared invalid for various reasons. The company wants a judgement from the court for these issues.

The complaint also asks for “an order that GM and each of its officers, employees, agents, attorneys and any persons in active concert or participation with them are restrained and enjoined from further prosecuting or instituting any action against LKQ or the purchasers of LKQ’s products claiming that the alleged patents are infringed or from representing that LKQ’s products or their use on networks operated by purchasers of those products infringe the alleged patents.”