Happy Tuesday! This week we are offering five new features of the FAA’s recent rule changes that alter the small airplane rules, but have some minor effects on all other aircraft as well.
The FAA has made very minor changes to 14 C.F.R. § 21.50(b). This is a very important rule to many of our readers because it establishes the design approval holder’s obligation to provide and make available Instructions for Continued Airworthiness.
Here are the changes (marked with strike-through for deletions and underlined for additions):
(b) The holder of a design approval, including either
thea type certificate or supplemental type certificate for an aircraft, aircraft engine, or propeller for which application was made after January 28, 1981, must furnish at least one set of complete Instructions for Continued Airworthiness to the owner of each type aircraft, aircraft engine, or propeller upon its delivery, or upon issuance of the first standard airworthiness certificate for the affected aircraft, whichever occurs later. The Instructions for Continued Airworthiness must be prepared in accordance with §§ 23.1529, 25.1529, 25.1729, 27.1529, 29.1529, 31.82, 33.4, 35.4, or part 26 of this subchapter, or as specified in the applicable airworthiness criteria for special classes of aircraft defined in § 21.17(b), as applicable. If the holder of a design approval chooses to designate parts as commercial, it must include in the Instructions for Continued Airworthiness a list of commercial parts submitted in accordance with the provisions of paragraph (c) of this section. Thereafter, the holder of a design approval must make those instructions available to any other person required by this chapter to comply with any of the terms of those instructions. In addition, changes to the Instructions for Continued Airworthiness shall be made available to any person required by this chapter to comply with any of those instructions.
The article “the” is changed to “a” in the first sentence. This clarifies that there may be more than one TC/STC for a design, and that each design approval holder has an independent obligation with respect to Instructions for Continued Airworthiness. The phrase “for Continued Airworthiness” as added to the second sentence of this subsection to clarify that the reference is to Instructions for Continued Airworthiness (and not to any other instructions).
As you can see, these changes are fairly insignificant and they are clearly meant to help the reader correctly interpret the existing language.
The FAA has released for comment two guidance documents pertaining to Instructions for Continued Airworthiness (ICA): Draft FAA Order 8110.54B and Draft Advisory Circular 20-ICA. As many readers of the blog know, MARPA has done, and continues to do, a significant amount of work to ensure that ICA are available and accurate in accordance with the Federal Aviation Regulations.
Draft Order 8110.54B is guidance directed at FAA personnel and persons responsible for administering the requirements for ICA. Among other changes, the draft reorganizes the Order to reflect material moved to AC 20-ICA (below), and importantly incorporates guidance implementing the FAA’s Policy Statement PS-AIR-21.50.01, Type Design Approval Holder Inappropriate Restrictions on the Use and Availability of Instructions for Continued Airworthiness. MARPA and the PMA industry were closely involved with, and supportive of the FAA in, the adoption that Policy Statement intended to protect the industry from anti-competitive ICA restrictions.
Draft AC 20-ICA is a new Advisory Circular that removes industry-specific guidance from the internal FAA Order and places it in a stand-alone AC. This effort is similar to the FAA’s actions in revising Order 8110.42D – Parts Manufacturer Approval Procedures and developing the new AC 21.303-4 – Application For Parts Manufacturer Approval Via Tests and Computations Or Identicality. Like Draft Order 8110.54B, the draft AC implements the FAA policy on ICA established in the Policy Statement. The proposed AC provides guidance to design approval holders (DAH) and design approval applicants for developing and distributing ICA.
After a preliminary review these documents appear to offer very positive guidance for the PMA and aviation maintenance industries, and appear in line with the policy positions for which MARPA has advocated for many years. MARPA will be reviewing both of these documents closely and offering comments and support for these policies to the FAA. We encourage the PMA industry to review both documents as well.
Comments on both guidance documents must be submitted by October 6, 2015, and may be submitted to the FAA via email to 9-AVS-ICA@faa.gov. If you have comments or observations that you feel MARPA should include in its comments to the FAA, email them to Ryan Aggergaard at firstname.lastname@example.org so the we can include them.
Don’t forget that the 2013 MARPA Winter Meeting will be held in Washington, DC on February 12, 2013.
Expected speakers include:
Our topics for discussion will likely include PMA developments, streamlined PMA for non-safety-sensitive (NSS) parts, Instructions for continued airworthiness, air carrier needs, and tax laws and regulations with a particular affect on PMA parts manufacturers. In addition to our speakers, we will be discussing our government affairs program and strategic planning for the Association.
The Winter meeting is an intimate opportunity to work closely with the Association and the Board on topics of special interest to MARPA members.
If you would like to attend the meeting, please RSVP to MARPA at (202) 628-6777. There is no charge for registering for this meeting; and the meeting is open to all MARPA members.
On October 4 at the MARPA Conference, Carol Giles, retired FAA Maintenance Division Manager and current President of Carol E. Giles & Associates, discussed some of the regulatory challenges and compliance issues currently facing the maintenance industry that also have an effect on PMA manufacturers. She particularly focused on Instructions for Continued Airworthiness (ICA).
Giles noted that a number of air carriers have moved away from MRO to focus on their core business. In response, a number of design approval holders took advantage of this opportunity to restrict ICA access to MRO facilities under the guise of protecting intellectual property.
She explained that although the FAA is loathe to enter into commercial issues, they reached a tipping point as these restrictions on ICA use began to interfere with the public’s ability to comply with the safety regulations. The FAA issued a policy statement addressing the practices that restrict the availability or use of ICA. The FAA policy explained that FAA design approval holders may not inhibit an owner or operator from distributing ICAs to current or future maintenance providers. Similarly, design approval holders are not allowed to use the ICAs as a naked vehicle to monopolize the parts market.
ICAs represent an issue on which MARPA has continued to provide industry leadership. MARPA will continue to work closely with the government to ensure that ICAs are able to support aviation safety.
If you missed the 2012 MARPA Annual Conference, then you can still track MARPA’s developments and the industry and regulatory changes that affect the PMA industry by joining MARPA.
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.
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.
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.
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.
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.
I recently wrote a blog article on the misuse of CMMs to gain anti-competitive advantages in the parts aftermarket through tying arrangements.
In response to that article, we have been hearing a lot from people about restrictive ICA/CMM licensing agreements. These agreements condition access to the ICA or CMM on a licensing agreement that restricts the repair station or air carrier from using PMA parts. In some cases the restriction may be explicit, but in other cases it may be more subtle (like an agreement that forbids use of the OEM ICA for inspecting the PMA part, despite the fact that the FAA has already approved the PMA part with ICA provisions that require continued reliance on the OEM manual).
In essence, the repair station’s or air carrier’s access to necessary manuals is held hostage to an anticompetitive agreement that adversely affects their ability to purchase competitive products, and that undermines safety by preventing the use of maintenance manuals in contexts that have already been deemed appropriate by the FAA (and where there is no other FAA-acceptable alternative).
We have been shocked, already, at the number of examples of this sort of anti-competitive behavior that we’ve discovered.
We frequently speak with the media about PMA issues, and this is an issue that is attracting a great deal of media attention. I gave an interview to AIN and they published an article based on our work in this area.
This is an important issue for the entire industry. Repair stations and air carriers are being asked to sign ICA/CMM licenses that restrict their ability to purchase independent (competitive) PMAs. And they being coerced into doing so by the threat of losing access to the ICAs and CMMs.
An important point here is that agreements that tie a monopolized product (like a OEM CMM, which repair stations MUST have under 14 C.F.R. 145.109) to a competitive product (the OEM parts, which are in competition with PMA parts) may be violations of the U.S. antitrust laws (and may violate the latest European antitrust laws). Where an OEM requires the purchase of OEM parts as a condition of access to ICAs/CMMs, there are serious potential antitrust consequences.
We have already gotten copies of several examples of restrictive language that forbids or limits use of PMAs as a condition of obtaining the manuals. I would appreciate it if the reading audience could help me by sending me copies of any examples you might find of such restrictive language.
At the recent EASA-FAA International Aviation Safety Conference, Tom Howard of Chromalloy asked about the status of the EASA ICA working group which was supposed to be examining strategies for updating the requirements and regulations surrounding Instructions for Continued Airworthiness (ICAs).
The EASA rulemaking group is known by the designation MDM.056. This group was tasked with addressing issues like:
In an April 2011 meeting, FAA, EASA and TCCA met to discuss their progress and status on ICA issues. They found that the ICA issues were issues that were being addressed in all three jurisdictions. They also agreed to split the ICA issues into several sub-tasks, because the original assigned scope of the rulemaking group was too broad. Work on the EASA group was halted in order to permit better international coordination of the investigation into the ICA issues.
EASA expects to resume work on ICA-related projects next year, with partners from the US and Canada. In the mean time, the three authorities are developing a regulatory impact assessment to define areas of common interest. This project is expected to last through 2012, which means that the actual work of addressing ICA issues will not resume until 2012 at the earliest.
Irwin Fleuberger of Austrian Airlines explained that there are some definitions concerning ICAs and the sections that must be included in them – and these need to be harmonized across the authorities.
Walter Desroisier of GAMA is a member of MDM.056. He explained that there is a vast difference in the understanding of what constitutes ICA in the United States versus what constitutes ICA in Europe. There are also differences among manufacturers in the elements that they put together in their ICAs.
One source of confusion, according to Desroisier, is that there is maintenance data that is not ICA. Manufacturers can provide additional maintenance information that is not part of the body of material that is regulated as ICA. Another source of confusion is found in component maintenance manuals. A component maintenance manual is part of the ICA if the design approval holder for the product (aircraft or engine) incorporates the component maintenance manual into the product ICA. However, if it is not incorporated by refernece, then it is not part of the ICA for the higher-level assembly or product.
FAA Engineering Division Manager David Hempe explained that ICA requirements have evolved over time. Failure to follow ICAs has resulted in accidents, so this is an important safety issue. He pledged that his office would continue pursuing better ICA guidance.
Howard also asked whether observers would be permitted at the future rulemaking group meetings on ICAs. EASA Juan Anton explained that EASA does not permit observers in the working group. Tomorrow afternoon there will be a panel addressing ICA. There were 24 persons on the ICA working group. Following an April 2011 meeting with the FAA, EASA decided that it’s ICA group’s scope was top broad. EASA is working with FAA to identify areas of common interest. The Working Group has been suspended while the ICA tasks are revised. EASA expects to be able to continue work on ICAs in 2012.