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New FAA ICA Policy Restricts Licensing Practices that Undermine FAA Approvals and Regulations

The FAA has released new policy guidance that makes it clear that ICA licensing agreements that inhibit use of FAA approved components are “unacceptable.”  This new guidance will be very useful to repair stations and air carriers seeking to understand what sort of provisions might reflect “over-reaching” by a design approval holder when they are included in a licensing agreement for Instructions for Continued Airworthiness (ICA).

Several manufacturing companies have required repair stations and air carriers that want their ICAs to sign ICA licensing agreements.  In some cases, these licensing agreements have included language that conflicts with FAA approvals, or with FAA policies.  In such cases, the licensing agreement inhibits safety by imposing non-safety-related impediments to the distribution of safety guidance.  FAA regulations and policy favor the distribution of this information to those performing maintenance under the regulations, and reliance upon such guidance by those performing such tasks.

Some of these license agreements have restricted the installer from using the “OEM Manual” to maintain PMA parts.  This is a real problem in cases where the FAA has reviewed engineering data and authorized the continued use of that manual for maintenance related to the PMA part.  In such cases, you have a licensing agreement that restricts the use of the OEM manual, while FAA regulations and approvals actually require it in the name of safety!

MARPA was an important participant in the process that led to this policy, working as a partner to the FAA and providing the FAA with information to support their investigations.

The Effect of the Memo

Existing regulations require design approval holders to create ICAs, to make them available, and to have a mechanism for distributing the ICAs and amendments to the ICAs.  The FAA’s regulations require the mechanism for distributing the ICAs and amendments to the ICAs to be provided to the FAA for review.  In many cases, licensing agreements reflect the mechanism by which ICAs and amendments to the ICAs are distributed.  Where this is the case, it means that the licensing agreement is subject to review by the FAA for compliance to the regulations.

The new policy memo makes it clear that certain provisions will be considered unacceptable in ICA licensing agreements.  These unacceptable practices include:

  • Provisions that restrict sharing of ICAs between an operator and its maintenance contractors
  • Provisions that restrict use of the ICAs where FAA has found the ICAs applicable (e.g. for PMA parts)
  • Provisions restricting the operator to only install OEM parts
  • Provisions that require repairs or alterations to be OEM-approved
  • Provisions restricting repair to only OEM-approved repair stations

Such provisions will be considered unacceptable in ICA licensing agreements.

Contrary to the claims of some, this policy does not mean that the FAA will change the way that it approaches ICA.  In fact, MARPA is working with the FAA on other projects that may change ICA.  But in this case, the policy guidance really just reiterates that ICAs must be made available to the parties that rely on them for safety compliance, and contract provisions that undermine that safety regime will be considered unacceptable.

History and Background

The industry has always relied on product-level maintenance manuals published by the manufacturers of the products. These manuals were intended to provide certain baseline procedures for accomplishing maintenance and the maintenance industry relied on them for the purpose of accomplishing maintenance.

In 1980, the FAA recognized that some product manufacturers were not publishing adequate manuals.  In response, the FAA published three sets of important regulations.

First, in each of the airworthiness standards, the FAA published a requirement to publish Instructions for Continued Airworthiness (ICAs).

Second, in each of the airworthiness standards, the FAA published appendices that explained what must be included (at a minimum), in these ICAs.  These appendices also permitted the product manufacturers to rely on component maintenance manuals by incorporating them by reference. These appendices also required the product manufacturers to have a method for distributing the ICAs (and any amendments).  The method for distributing the ICAs must be acceptable to the Administrator.

The third major element of this ICA regulatory system is a regulation requiring the manufacturer producing the ICA to make the ICA available to certain parties who are required to comply with the ICA.  This complements the FAA-acceptable ICA distribution system by clarifying that certain parties are entitled to be beneficiaries of the distribution system.

The FAA has also published complimentary regulations requiring reference to these ICAs, like 14 C.F.R. 145.109, which requires repair stations to have these ICAs.

The industry ran into an issue when certain manufacturers began to deny entitled parties the privilege of access to the manuals, unless the entitled parties agreed to forbear from doing business with certain competitors, or agreed to forbear from using certain types of FAA approved articles (like FAA-PMA approved parts) or FAA approved data (like FAA-DER approved repairs).

This has had the effect of stifling competition, inhibiting innovation, and undermining safety advances. In some cases, where such pledges were unreasonable, it has put maintainers in the difficult position of having to find alternative sources for such ICA data, even though those maintainers were entitled to the ICAs. This undermines safety by creating an opportunity for the use of outdated maintenance practices and by undermining uniformity.

Intellectual Property and Recent Court Decisions

Manufacturers are required to make ICAs available.

MARPA has heard certain manufactures argue that anti-competitive licensing agreements restricting the use or distribution of the manuals are somehow justified as legitimate licensing of copyrighted material.  This intellectual property argument appears to lack support under the law.

Where ICAs are protected by a valid copyright, the courts have concluded that the Fair Use Doctrine permits copying for certain maintenance purposes.  One reason for this is because once an idea or method is set down on paper, the copyright laws protect the text used to express the idea or method but they do not confer any exclusive rights with respect to the use of those ideas or methods.

The copyright laws protect the author’s ability to profit from the sale of the published work (the ICA).  They do not protect the author’s ability to profit from sale of another related product (like the products or articles that may be maintained under those instructions).

In recent cases, courts have explained that an attempt to use a copyright to secure a competitive advantage in the market for a good other than the copyrighted work is considered to be copyright misuse.  Anti-competitive licensing agreements may reflect “copyright misuse.”  Copyright misuse may reflect a defense to claims of breach of licensing agreement related to a license for a copyrightable work.

The FAA’s Policy against misuse of ICA for competitive gain in contravention of safety policy is consistent with the decisions suggesting copyright misuse in similar situations.

FAA Policy

The FAA imposes an obligation on the publishers of ICAs to create a mechanism for distribution of those ICAs.

The FAA has retained the power to influence the mechanisms for distribution of ICAs, by insisting that such mechanisms must be submitted to the FAA, thus providing a mechanism for assessing the acceptability of the distribution mechanisms.

The FAA Policy provides guidance for what will be considered acceptable and what will be considered unacceptable when the ICA distribution mechanism is submitted to the FAA.

The FAA Policy removes impediments to reasonable distribution of ICAs by making it clear that the publishers of such ICAs may not impose conditions on the distribution of those ICAs that contradict FAA approvals or undermine aviation safety.  This does not mean that licensing agreements are inherently bad; it only addresses licensing practices that conflict with FAA approval as and FAA policies.

The intent of the regulations has always been that manufacturers will publish ICAs that are then used by the industry, and such manuals cannot be used unless they are reasonably distributed.  This was intended to support safety.  This was never intended to provide manufacturers with a monopoly right that could be leveraged in order to gain anti-competitive advantage in other fields.

MARPA has strongly urged its members to make their ICAs readily available to the industry, and MARPA appreciates the FAA’s efforts to support this same recommendation through the regulations and interpretations.

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