Lasers - Applying a Blow Torch

[IPLore]

This was an unwise post for LP to put on its blog:

• LP refused to have ILCA undertake an inspection of LP’s facilities five months before expiry of 1998 Agreement and after three years of ILCA refusing to renew its license under the 1998 Agreement.
  

▪️ LP does not and has not refused inspection of its manufacturing facility or its products by other legitimate regulatory bodies. Indeed, LP has formally requested World Sailing to inspect LP’s facility given that they are the ultimate authority for compliance and the issuance of the boats’ plaques.

Good grief, a good lawyer would have told them to say something about " LP ..more than willing to allow ILCA to inspect the facilities subject to ILCA agreeing to continue to comply with standard commercial non disclosure terms which were due to expire in August 2019.....blah blah".  But to come out and outright acknowledge that you were refusing to allow inspection was smart like lawn mower.  The contract is quite clear that the Association is entitled to inspect.

 

[IPLore]

According to the very recent statement from LP/LPE, they did not allow ILCA to inspect because ILCA has not renewed the license agreement, due to expire August 31.

I quote:

LP has granted ILCA certain rights to use the Laser Trademark for its activities pursuant to an intellectual property license dated February 1998 (the “1998 Agreement”).

LP has been seeking a renewal of the 1998 Agreement which expires after multiple extensions on 31 August 2019.

Yes. This looks incredibly similar  to the recent dispute that LP had with the Sunfish class. 

When it came time for the Sunfish class to renew their license to use the various trademarks belonging to LP, LP wanted some additional terms. I cannot recall what they were. The Sunfish class refused.

What LP is saying here is that ILCA is using a trademark belonging to LP, (presumably the Laser logo) and that LP wants to renew that license. We d not know what is contained in  the 1998 license agreement, nor what terms LP was asking for in a renewal agreement. However when we dug into the sunfish case, I recall we were not very impressed by LPs claims in that case.  If the lil' ole Sunfish class can hold firm to its claim to use the Sunfish logo without giving up the right to allow its members to source spare parts....then one suspects that the powerfully organized and well funded Laser Class is not going to give way easily.  

What is the betting that the ILCA liaised closely with WS before taking the decision to go hostile?

 

[IPLore]

I would be interested to see that 1998 license agreement to see if LP secured trademark protection that overcomes acquiescence.  Its not like ILCA has been using the trade mark to sell boats

 

[torrid]

Remember the change to the fundamental rule a few years back?  The one that gives the class the right to appoint/approve builders?  I had to Google it.  That was back in 2011.

I don't think ILCA could do their current action without that rule in place.  Ironically, my impression at the time was they were siding with LP.  Now they are clearly siding with PSA.

 

[Sailabout]

if the class changes the name and the boat name its all over I thought?

Mumm 30 - Far 30, it happens

 

[Dazz]

if the class changes the name and the boat name its all over I thought?

Mumm 30 - Far 30, it happens

LASER SB3 - SB20 

Situation normal for Laser Performance!

 

[tillerman]

Remember the change to the fundamental rule a few years back?  The one that gives the class the right to appoint/approve builders?  I had to Google it.  That was back in 2011.

I don't think ILCA could do their current action without that rule in place.  Ironically, my impression at the time was they were siding with LP.  Now they are clearly siding with PSA.

The change to the Fundamental Rule in 2011 was to remove the requirement for a builder to have a building agreement with Bruce Kirby or Bruce Kirby Inc.

The requirement that a builder needs to be approved by the International Laser Class Association was in the Rule long before 2011 - see 2001 rules in this link to the Wayback Machine.

 

[Board skiff]

If ILCA changes the name of the class and the boat, that is a new class that does not presently have international or Olympic status. It can’t hold World championships and it ought not to have the same relationship with World Sailing that it currently does.  

Other than some moral argument, it is not clear why anyone in the US or Europe would buy this new class rather than an LP Laser, which offers Worlds, Olympics etc and would probably be cheaper (as they have the infrastructure in place) and certainly more well known. 

Therefore I think a renamed ILCA risk becoming a regional class.  

And surely it is more than coincidence that PSA and LP announced separate new rigs shortly before this dispute became public. Even the fact it was ILCA that entered the Olympic trial rather than a joint LP/PSA bid seems odd. 

 

[Phil S]

Some speculative predictions from someone not involved emotionally other than appreciating what good 400,000 laser has done for our sport. I can not predict the time scale but I see these steps as the only logical outcome.

1. The rift between builders, trademark holders, the association and designer is now multifaceted and unlikely to be repaired, certainly not soon and probably never.

2. There is now a divide bewteen at least two strong groups who both think they control the class. All have at least some valid legal and moral claims.

3. There will be more legal action by many parties and like the last edition, this will take many years to quite possibly not reach any conclusion.

4. World Sailing will likely use all this as a very good reason to exclude the Laser from any further consideration for the currently up for grabs Olympic spot.

5. The thousands of people who own Lasers will continue to enjoy racing them and many will continue to buy new new boats and parts from their local builder or supplier. Some may call their boats and class by a different name, just to bypass the trademark legal action.

6. Regattas will continue to be run by local clubs and by maybe the two different associations claiming to represent the class.

7. Alternative builders will slowly upgrade/ alter their product until the two types will be diferent enough to no longer be truely one design in the old sense of the term.

7. At some point World Sailing will find it too hard to take sides and will be unable to select which association represents the whole Laser world, and which version of the boat is the real deal and consequently the class will lose international status and the right to hold World Championships.

8. The enthusiasm for the class and its international competitions will wane and with it the demand for new boats. Inevitably building new lasers will not be a viable financial enterprise.

That would be a very sad outcome for all the dedicated Laser people but it does seem ineviatble. Its also a very sad outcome for our sport because there are no new classes which can offer the universally cheap international sailing which 400,000 second hand lasers offers the world. 

;

 

[Curious]

If ILCA changes the name of the class and the boat, that is a new class that does not presently have international or Olympic status. It can’t hold World championships and it ought not to have the same relationship with World Sailing that it currently does.  

Other than some moral argument, it is not clear why anyone in the US or Europe would buy this new class rather than an LP Laser, which offers Worlds, Olympics etc and would probably be cheaper (as they have the infrastructure in place) and certainly more well known. 

Therefore I think a renamed ILCA risk becoming a regional class.  

And surely it is more than coincidence that PSA and LP announced separate new rigs shortly before this dispute became public. Even the fact it was ILCA that entered the Olympic trial rather than a joint LP/PSA bid seems odd. 

Nope. There's ample precedent for International classes to change the boat and class name. Current examples;

Int Access Class Association became the Hansa 303 Class Association and Hansa 2.3 Class Associations, and they remained International classes.  Int Laser SB3 sportsboat became the International SB20 sportsboat.  Int Musto Performance Skiff became Int Musto Skiff. None of them lost international or Olympic status, and one can't see World Sailing being keen to throw out all the Laser sailors of the LPJ and LPA regions and their fees.

Surely the main thing buyers want is other sailors to race against and volunteers to run races. Why would fleet captains and regional organisations go with LPE against ILCA?  What can LPE offer, apart from supply of LPE boats that can't race in ILCA events?

 

[Board skiff]

Nope. There's ample precedent for International classes to change the boat and class name. Current examples;

Int Access Class Association became the Hansa 303 Class Association and Hansa 2.3 Class Associations, and they remained International classes.  Int Laser SB3 sportsboat became the International SB20 sportsboat.  Int Musto Performance Skiff became Int Musto Skiff. None of them lost international or Olympic status, and one can't see World Sailing being keen to throw out all the Laser sailors of the LPJ and LPA regions and their fees.

Surely the main thing buyers want is other sailors to race against and volunteers to run races. Why would fleet captains and regional organisations go with LPE against ILCA?  What can LPE offer, apart from supply of LPE boats that can't race in ILCA events?

In those examples it was just a simple change of name.  However, in this case if ILCA changed name to drop the "Laser" part, LP (or a third party) would surely create an "ILCO" to represent bona fide Laser™ sailors (not just LP Lasers™ but all legitimate Lasers™.  I submit that it is the Laser™ and not ILCA (or the ILCA boat) that is the WS and IOC recognised class.  

I would turn your last question around.  What can ILCA offer apart from organising races for boats that look like Lasers™ but can't race in Laser™ World Championships and Olympic qualifiers.

 

[Curious]

As far as I can see from the WS regs, it's quite different. ISAF works out what classes are International and can hold worlds. There must be an agreement between WS and the class about matters such as trade names. If Babychopper wants the Babychopper Laser to become an International class they may have to agree to WS' terms about trade names, which gives WS leverage over Babychopper's biggest weapon.

Without WS recognition, Babychopper Inc can't run a Laser World Championships unless they want those attending to risk being chucked out of WS events. WS does not take kindly to classes holding world championships that are not under WS purview.

The Laser (TM) is not a recognised class. The recognised class is ILCA. Your submission is, with respect, apparently not correct at all.  ILCA can offer the title of 'International Olympic One Person Dinghy World Championships". It can also offer all the perpetual trophies etc from district level on up. The Int Babychopper Laser Class Association can't offer a world title, has no trophies with names like Schiedt, Bertrand, Coutts, Ainslie and Slingsby to offer, and actually may suffer flack from WS if it calls itself an International sailing class.

The other issue is the Terms and Conditions for Olympic Class Plaques (OPCTC). Clause 3.1 appears to prevent any builder (ie Babychopper Laser Inc) from stopping any competitor or organisation from buying any class gear produced by any other builder in the world. So BLInc can't stop the ILCA or RYA, for example, from buying 50 Lasers from LPJ and selling them to sailors. (EDIT - sorry, "trade" is not permitted so LPA or LPJ boats could not be sold by the RYA or ILCA).

Another clause allows WS to inspect factories "at all reasonable hours upon request" and to delegate such inspection to a class association. Babychopper's refusal to allow ILCA into its factory therefore appears to be pretty fatal, if WS's power of inspection was delegated to ILCA as one assumes may have been done.

Further clauses says that Babychopper Laser cannot suspend (or threaten to suspend) a substantial part of its business (ie like saying they won't build Lasers for the Olympics, although that may have no power since under Clause 3.1 WS and ILCA could probably buy LPA or LPJ boats and send them to the Games) and WS can stop issuing plaques if there is a breach of the contract. The OPCTCs seem to give WS just about all of the cards, from a quick reading of them. 

 

[Board skiff]

Having looked up these T&Cs, and WS refs for becoming an international class, I think you are right. It would appear that a class is administered by its CA not by the IP owner. 

 

[JimC]

There were also termination clauses in the builder contracts.  A former builder is very limited in what they can do by the termination clauses. This is all somewhere in the depths of the thread I think. Of course those have to stand up in court, and as we have seen that takes years and costs a fortune. And since the trademarks are owned by a different company to the builder, I wonder if the clauses can be evaded by dissolving companies and starting new ones.

But searching through the thread a bit a lot of them related to Kirby - Builder contracts, and that is still inching its way through the courts and making lawyers rich.

 

[IPLore]

If ILCA changes the name of the class and the boat, that is a new class that does not presently have international or Olympic status. It can’t hold World championships and it ought not to have the same relationship with World Sailing that it currently does.  

Other than some moral argument, it is not clear why anyone in the US or Europe would buy this new class rather than an LP Laser, which offers Worlds, Olympics etc and would probably be cheaper (as they have the infrastructure in place) and certainly more well known. 

Therefore I think a renamed ILCA risk becoming a regional class.  

And surely it is more than coincidence that PSA and LP announced separate new rigs shortly before this dispute became public. Even the fact it was ILCA that entered the Olympic trial rather than a joint LP/PSA bid seems odd. 

Just to be clear sosoomi, unless LP allows the Class Association to inspect manufacturing then LP Lasers cannot be used in World Championships or Olympics.

World sailing is very firm on the terms of its contracts. Those class contracts are a fundamental element to WS's governance of the sport.  It is the only way they can control and enforce what is going on globally in the sport.  As a class,   if you want to host a world championship,or be considered for an Olympic class, the Class Association, the rights holder and the builder all have to agree in a written contract to a certain set of standards that all WS authorized classes agree to.  WS cannot and will not make exceptions.

One of those standards is the right and requirement to inspect manufacturing facilities. In the Laser contract , the class does the inspections.  It is a contractual obligation. It was signed by Laser Performance and its predecessors.

 

[Board skiff]

I see that, but does the inspecting class association have to be ILCA, or can it be ILCO?  It looks like World Sailing’s agreement is with ILCA, so to answer my own question yes, it does have to be them.

Obviously international classes are more professionally run than local classes, and Olympic classes even more so, but I don’t understand how the class association, which has never paid for or owned the IP to the boat, can have such power over the class. Is it just the long and complex history that has led to this?  Why else would an IP owner agree a contract that lets a non-commercial owners club dictate terms?  I can’t imagine Porsche ever letting the 911 Owners Club rule the roost. You would be wise to listen to your customers but foolish to give them control. 

 

[JimC]

Class name changes are fairly common. I have a database of UK Portsmouth yardstick numbers and there are classes that have changed their name more than once. Whilst its usual for there to be some relationship - Laser 2000 -> 2000 is one example in the UK, sometimes they are completely unrelated.

I don’t understand how the class association, which has never paid for or owned the IP to the boat, can have such power over the class. Is it just the long and complex history that has led to this? 

Because Kirby and his colleagues set it up that way.  Its not uncommon for the design ownership to be separate from the builders, I believe Julian Bethwaite works that way.

The original setup was a complex mesh of contracts, which meant everyone had rights and duties, and no-one could unilaterally throw it over without exiting the game completely. At least that seems to have been the intention. It hasn't quite worked out like that because of the broken US legal system. The only IP a builder owns are the trademarks for their region. The design IP,  such as it is, is owned by Kirby or Global Sailing and there are a lot of implications related to that going through the courts.

 

[IPLore]

There were also termination clauses in the builder contracts.  A former builder is very limited in what they can do by the termination clauses. This is all somewhere in the depths of the thread I think. Of course those have to stand up in court, and as we have seen that takes years and costs a fortune. And since the trademarks are owned by a different company to the builder, I wonder if the clauses can be evaded by dissolving companies and starting new ones.

But searching through the thread a bit a lot of them related to Kirby - Builder contracts, and that is still inching its way through the courts and making lawyers rich.

The ILCA is not a party to the builder contracts.

I dont mean to get into semantics here but hitherto the ILCA has not  "appointed" builders, the rules refer to builders that are  "approved"  by ILCA and WS.

It becomes important because LP does not have a contractual case vs ILCA that can be taken to court.  LP could possibly try a claim for tortuous interference or it could agree to arbitration under the WS contract.  You will recall that when the Aussie builder tried to sue the ILCA (initially under the guise of Bruce Kirby and subsequently as Global sailing), they discovered the same thing. They resorted to tortuous interference and (as I predicted) it was thrown out.

It is early days and LP has proven to be an unpredictable beast .....but I speculate that this narrows down to an intellectual property dispute regarding terms that LP wishes to secure in exchange for their trade mark. 

Honestly i am a bit surprised by LP's muted and rather confused response. If it were me, and I wanted to go hostile, I would have filed for an injunction.  As per the three options I described above...it is not clear quite which one they have chosen.   Round One in a 20 round bout goes to ILCA. 

 

[MR.CLEAN]

, Babychopper Inc

now i need a new fucking coffee

 

[MR.CLEAN]

I wonder if clauses can be evaded by dissolving companies and starting new ones.

Rastey doesn't have any such doubts!