DEARBORN, MI --- A settlement agreement has been reached between Ford Motor Co. and LKQ Corp., a distributor of new non-original equipment aftermarket, recycled salvage and remanufactured OE parts.
Ford had filed the litigation in a move to protect its design patents on genuine Ford collision parts.
The settlement provides that LKQ will not challenge the validity and enforceability of Ford's design patents during the term of the agreement.
The settlement ends two legal actions: the first involving replacement collision parts for Ford's F-150 pickup truck, which had advanced to the Federal Circuit Court of Appeals; the second involving replacement collision parts for the Ford Mustang, which was before the U.S. International Trade Commission (ITC).
Details about the agreement are confidential and will not be disclosed.
"The settlement protects U.S. jobs and provides consumers with choices when repairing their vehicle," said Darryl Hazel, president of Ford Customer Service Division (FCSD).
Hazel added that the settlement will benefit both companies and their customers in the following ways:
- Ford's enormous intellectual property investment is protected.
- Ford will continue its U.S. investment, especially in southeast Michigan, to design, engineer and produce genuine Ford collision parts for sale through its U.S. dealer network.
- LKQ will be the only distributor of non-original equipment aftermarket copies of genuine Ford collision parts protected by design patents. LKQ will pay Ford a royalty for each such part sold during the agreement's term, which extends through Sept. 30, 2011, subject to renewal upon mutual agreement of Ford and LKQ.
- Competition in the market will continue by ensuring consumers have the right to choose between original equipment and non-OE aftermarket parts.
- Ford and LKQ will work together to stop infringement of Ford's design patents.
Hazel stressed that the settlement does not endorse the quality or use of non-original equipment aftermarket replacement parts sold by LKQ Corp. FCSD and LKQ will continue to compete vigorously.
"The agreement we reached is beneficial to both Ford and LKQ," said Joseph Holsten, president and CEO of LKQ. "As the sole distributor of new non-original equipment aftermarket parts protected by Ford design patents, we will have the sole right to sell these parts in the United States for all of Ford's models."