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Legislation The
Speakers Peter Groves is a solicitor heading the intellectual property department at Davis & Co. For many years he was Legal Advisor to the SMMT. He also spent a year as Head of Commercial Law at the CBI. His current practice embraces all areas of contentious and non-contentious intellectual property law, concentrating in particular on trademarks, copyright and the intellectual property aspects of due diligence investigations, and extends to competition law (especially motor vehicle distribution agreements) and information technology law, especially legal aspects of the Internet. In 1989 he and Anthea Worsdall, his co presenter on legislation issues at the ADF Workout, established a legal newsletter for the motor industry entitled Motor Law. The publishing company set up for this purpose has since published The Motor Law Guide to the Block Exemption. Anthea and Peter are also co-authors of The Institute of the Motor Industry’s student book, Motor Trade Law and in 1994 Peter also wrote a major report on the future of franchised dealers. Peter’s first book, Copyright and Designs Law was published in 1991 and he has subsequently written a number of further books on intellectual property and EC law. He is a regular conference speaker on topics related to motor industry legislation and his broad knowledge was invaluable for several aspects of the afternoon’s debate – including our old friend The Block Exemption. Like Peter Groves, Anthea Worsdall also served time as legal advisor to the SMMT. For seventeen years she was also Secretary to the UK Anti-Counterfeiting Group and was appointed OBE for her work for this organisation. She writes and lectures extensively on motor industry legal topics – particularly consumer law and product liability. As well as being Peter’s business partner in Motor Law, she is author of Consumer Law for the Motor Trade and co-author of the Product Liability Casebook and Anti-counterfeiting – a Practical Guide. Her topics for discussion were employment law plus EU Designs Law – Counterfeiting & Piracy. Peter Groves then spoke about some of the key legislation issues affecting parts distribution. In particular he identified the Block Exemption, the Designs Directive, the Working Time Directive, the Minimum Wage and Counterfeiting & Piracy as important pieces of legislation. Block Exemption As far as the Block Exemption is concerned, the important aspects for parts distributors supplying independent garages were identified as parts exclusivity and access to technical information. For several reasons, parts used by franchised dealers still tended to be o.e.m. with commercial incentives offered by vehicle assemblers to maintain dealer loyalty. If dealers are not inclined to enter into legislation arguments with their vehicle assembler franchisers then the situation is unlikely to change – particularly when prices are more competitive and servicing other makes is not seen as an important part of the dealership profit equation by most volume or medium volume franchisers with large parcs. Indeed it is unlikely that they would do because this goes against the arguments for retaining the Block Exemption. So some form of unofficial parts exclusivity is likely to remain in place – at least until the Block Exemption issue is out of the way. Access to information is now a legal requirement but many vehicle assemblers are dragging their heels and the format the information is to be provided in, the expertise required by the information user and the costs are still up in the air. The Block Exemption is due for review in the year 2000 and possible expiry in 2002. Much committee work will be taking place in Europe and the UK over the next 2 years with recently announced UK industry investigations playing their part. If the Block Exemption does expire then we are likely to see more vertical integration between vehicle assemblers and installers and the development of service only outlets and service agents. Quality independent operators may have a role to play in these structures. Major changes are likely to be driven by IT technology and the Internet, and the movement of the parts and labour business towards older vehicles – mega trends outside the influence of any Block Exemption legislation. Designs Directive At the moment national laws on Design and Copyright have been preserved with no tightening of restrictions permitted. In the UK it is based on the Registered Designs Act 1949 and so only applies to registered designs. Spare parts are excluded. But the problem has only been parked up. The different Designs Directives operating in different countries are likely to be harmonised eventually and matching quality and fit will remain issues. The novelty of the parts or system concerned will have to be proven before design rights can be applied. Use of trade marques and the application of royalties will also be topics that will not go away. Certainly aspects of legislation to watch. Working Time Directive Anthea Worsdall picked up the legislation topic and first of all covered the Working Time Directive. She confirmed that the UK implemented the EC Directive on October 1st 1998 and it applied to school leavers over minimum school leaving age with special rules for 16-18 year olds. There were some exemptions. A limitation on the average hours per week was set at 48 hours and this can be varied by individual agreement provided the employer keeps a record. Other rights in the new legislation include:-
Work force or collective agreements can vary. The rest breaks basically state one day off per week for adults with 11 hours consecutive rest per day. There must be a minimum of a 20-minute break if the working day is more than 6 hours. Paid annual leave must be in place after a 13 week qualifying period. This is set at 3 weeks with 4 weeks after November 1999. The minimum wage act came into force on April 1st 1999 and is set at £3.60 per hour - £3.00 per hour for those aged 18-21. Other legislation in the pipeline includes
Counterfeiting and Piracy Anthea then went on to briefly look at the topics of counterfeiting and piracy. This subject covered distinguishing between counterfeit/pirate and genuine goods and a look at parallel and grey imports. A definition of counterfeiting was demonstrated as a product which so closely imitates the protected appearance of the product of another that it appears to be the product of another. (Tony East’ resemblance to Bernard Manning could be an example). If proven it involves almost certain criminal and civil liability. Piracy was defined as a product that reproduces the protected content of another but is not necessarily marketed as an authorised copy. (Tony East using Bernard Manning jokes is an example) with the prospect of maybe civil and criminal liability. Accepting the Challenge After the presentations the delegates took time out for lunch before coming back to accept the challenge of five ADF Workout Task Challenges. These covered the three topic areas that the Workout presentations addressed.
Legislation table chairman Quentin Cornforth reported back on the views expressed by the tables brainstorming legislation. As far as licensing the trade, the consensus was yes – it should have been done a long time ago. It happens in Germany and the feeling was that both technicians and the outlets should be licensed. This would lead to greater professionalism and greater investment by independents in training, which would then have a real value – the entry cost of being a player. Consumer confidence would be greatly improved. It would have to be a government led scheme with trade associations and educational establishments being heavily involved. Discussions on the topic of a vehicle serviceability certificate becoming a legal requirement produced a similar response – yes it should. A computerised vehicle passport issued from new would be good for the owner, the trade and any future buyers. The only losers would be criminals. A common protocol would be necessary and open exchange between all licensed premises. The roles of trade associations were seen as concentrating on two areas:- 1) Downstream in helping their members with training, IT, information transfer standards and protocols, equipment evaluation. Email and bulletin boards should be used to keep members informed. The trade association should also be the arbitrator of best practice. 2) Upstream in influencing and lobbying the government and the EU. It should secure and support government funding where change is required and improve supplier liaison with its members. Liaison with other trade associations is also important - working with them on common issues. It should also have clout supported by a high proportion of the relevant trade being in membership. And it should have a clear strategy. Looking at employment issues the brainstorm tables felt that short-term employment contracts should not be considered as the norm despite some possible short-term gains. Long term investment in people was the only way to gain commitment. The only time short-term contracts might be useful is for new recruits. Other topics discussed were the recently introduced fuel tax which was increasing delivery costs, a ban on DIY oil changes, taxing late payers, and keeping a close eye on vehicle assembler practices after and if the Block Exemption is dumped and copyright and OBD is freed up. Be ready to cry foul. (7/99) |