Briefing: January 5, 2024

FTC & the Right to Repair, a GitHub Lawsuit Update, and More

The Federal Trade Commission (“FTC”) appears to have the right to repair on its agenda for 2024, as on January 3, it opened a comment submission period that centers on the ability of consumers to repair their own products instead of going back to the original manufacturer (or authorized third-party) for service. According to the FTC, the move was prompted by a petition for rulemaking it received from the U.S. Public Interest Research Group Education Fund and iFixit, in which they requested that the Commission “initiate a rulemaking to protect consumers’ right to repair products they have purchased.”

In their petition, the U.S. Public Interest Research Group Education Fund and iFixit proposed a number of ways that the FTC could “restore competition in repair markets,” including several ways that companies could make repair easier and more widely available …

– Accessibility of Consumable Components: Parts that routinely wear out, like batteries, should be replaceable and readily available for the product’s entire lifespan.

– Availability of Common Parts: Components prone to wear and tear should be easily replaceable.

– Freedom of Repair Choice: Consumers should have the liberty to choose their repair provider or opt for DIY solutions.

– Sustained Product Support: Even after a product is discontinued, its key functions should remain intact, with repairs possible through independent shops.

– Interchangeability of Identical Components: Components from identical devices should be interchangeable without needing manufacturer intervention.

– Protection of Consumer Privacy: Independent repair shops should not be mandated to disclose customers’ personal information to manufacturers.

The call for comments follows from earlier efforts by the FTC on the right to repair front. In 2021, for example, the FTC issued “Nixing the Fix: An FTC Report to Congress on Repair Restrictions,” in which it noted that in response to a call for public comment on the issue of repairs, it received information claiming that “certain warrantors either expressly or by implication continue to condition warranty coverage on the use of particular products or services.”

With regard to the luxury market, the FTC revealed that one company cited by commentors was Rolex. At least one commenter told the FTC that the Swiss watchmaker’s “materials make statements such as, ‘only official Rolex repair centers are ‘allowed’ to repair and service a Rolex watch’ and that repair work done by anyone other than a Rolex facility will void its warranty.’” As we previously covered here, Rolex is, of course, not the only luxury watchmaker that takes such a stance on parts and/or services, a position that could be problematic from an anti-tying perspective because, as the FTC has held, “Companies cannot tell customers they will void a warranty or deny warranty coverage if the customer uses a part made by someone else or has someone other than the dealer repair the product.”

In October 2022, the FTC took additional action when it approved final orders in cases against Harley Davidson, Weber-Stephen Products, and MWE Investments, accusing the companies of including terms in their warranties that stated that product warranties would be void if customers used independent repairers or third-party parts, in violation of the “anti-tying” provision of the Magnuson-Moss Warranty Act and the FTC Act.

Thus far, the comments received by the FTC have unilaterally fallen in favor of the petition for rulemaking on the issue of right to repair, with commenters largely arguing in favor of the ability of consumers to: (1) avoid manufacturers’ bars on repairs by “failing to provide service and repair documentation, access to replacement parts or specialized tools or software,” and (2) repair products without such efforts voiding the warranty associated with those products. Many commenters have also pointed to the sustainability aspects of repairs, with at least one commenter stating that “corporate repair monopolies will keep us wasting our own money, wasting our planet’s resources, and prematurely sending products to the dump.”

As for the company most frequently cited as allegedly standing in the way of consumers repairs, that would be Apple, which is mentioned in a number of comments, along with companies like Bosch, vacuum-maker Shark, and Google.

More broadly: Right to repair is expected to play a bigger role in legislation and litigation in 2024, as an array of states are considering right to repair bills, following in the footsteps of New York, for example, becoming one of the first states in the U.S. to pass a right to repair law in 2022. The state’s Digital Fair Repair Act was enacted in 2023, along with separate right to repair legislation in Colorado, California, and Minnesota.

At the same time, “right to repair cases are also likely to see an increase,” Locke Lord Antitrust Practice Group co-chair Brad Weber stated recently, noting that thus “will be a focus area in 2024, as even more cases might be filed” – both by the FTC and consumer plaintiffs.

A Couple of Quick Litigation Updates …

– 1661, Inc. v. PESJ Holdings: Sneakers/streetwear platform GOAT is suing the operators of for offering up apparel bearing its GOAT trademark.

– J. Doe v. GitHub, Inc: An N.D. Cal. judge has granted in part & denied in part GitHub and co.’s motion to dismiss the DMCA, false designation of origin, unfair competition, etc. case waged against them over Copilot, an AI tool co-developed by GitHub & OpenAI. As of now, the court has restricted public access to the order “because it contains or refers to material subject to sealing orders.” (More about that case here.)

In some of the latest deal-making news in fashion/retail, law & tech …

– Renewcell AB has nabbed $10M in short-term funding in order to “resolve [its] short-term liquidity need.”

– LVMH’s Métiers d’Art has acquired Renato Menegatti, a metal components producer based in Villaverla.

– GreyOrange Inc., a leader in AI-driven fulfillment automation, has raised $135M in a Series D.

– AI-powered legal copilot provider Robin AI has raised $26M in a Series B.

– LawFi, which provides “a mobile-first digital lending and payments platform purpose-built for the legal profession,” has raised $1.5M in a Pre-Seed round.