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Laser designer takes builder, Class association and ISAF to court

by Rob Kothe and the Sail-World team on 16 Mar 2013
Exhibit 16 - Laser plaque .
The most successful sailing boat in history is the single handed Laser, designed in 1969 by Bruce Kirby, launched in 1970 and more than 210,000 Lasers later, it is THE dinghy success story.

But there has been a long running dispute between the designer of the Laser dinghy Bruce Kirby and one of the Laser builders LaserPerformance, the builder and supplier of Lasers into UK, Europe and North America, because of non-payment of design royalties.

On March 4, 2013, Bruce Kirby, Inc., filed a complaint in the U.S. Federal Court District of Connecticut, alleging unlawful counterfeiting of the Kirby dinghy by LaserPerformance principal Farzad Rastegar acting with and through Laser Performance and its associated entities.

This case also names the International Laser Class Association (ILCA) and ISAF alleging they assisted LaserPerformance by continuing to supply ISAF plaques to the builder, after Kirby had given them formal notice to stop.

Here is the introduction from the Complaints document presented by Kirby’s team..

‘This case concerns the production, sale, and racing of sailboats designed and sold by Bruce Kirby since about 1970.
‘In order to establish the Kirby sailboat design as a standard class for international racing, Kirby reached agreements with the various sailboat builders who held rights to the Laser name as well as the international governing bodies that regulate competitive sailing.

‘Under the terms of these agreements, the builders paid a royalty to Kirby and received the right to manufacture boats according to the Kirby sailboat design and uniform Construction Manual and to affix a plaque on the hull of each boat featuring Bruce Kirby’s name and trademark, and a unique hull/sail number.

‘The plaque confirms that the boat was built according to the Kirby sailboat design and is authorized by Bruce Kirby. Only those boats manufactured under the various builder agreements and bearing the appropriate plaque were entitled to race in events sanctioned by the international governing bodies.

‘This system worked to the mutual benefit of the builders, the governing bodies, Kirby, and sailors worldwide for over 20 years until certain builders decided to breach their agreements by, among other things, ceasing royalty payments and transferring their rights without notice or consent of Kirby. Notwithstanding their breach, these builders continue using both the Kirby sailboat design and the Bruce Kirby name and trademark.

‘The governing bodies named in this complaint compound this breach by continuing to issue hull plaques featuring the Bruce Kirby name and trademark, as well as a unique hull/sail number even though the boats were no longer made under Kirby’s authorization.

‘As a result, boats currently distributed in interstate commerce and in Connecticut are counterfeit, and violate Kirby’s trademark and publicity rights. Kirby sues for default of contract as well as counterfeiting, trademark infringement, unfair competition, false designation of origin, inducement to default on contract, and right of publicity under federal and state law.’

While the 23 page Complaints document has been widely circulated, the full detail of the issue have only now begun to leak out with some 17 exhibits, being trademark registrations, contractual documents and correspondence between Bruce Kirby, Bruce Kirby Inc. and LaserPerformance, ISAF (and its precursor IYRU) and ILCA. gradually trickling into the public domain.

What has blindsided most observers who have been focusing on Laser trademarks, which over the years, the rights to which have been bought and sold, Kirby`s case brings into play the use of trademark Bruce Kirby, used on the ISAF plaques attached to every Laser.

An initial search through all the publically available documents and statements reveals that neither LaserPerformance nor any of its associated entities, ISAF or ILCA have ever claimed to have rights over the Bruce Kirby trademark.

The exhibits seems to provide evidence that Kirby formally requested ISAF and ILCA to stop issuing Kirby plaques because LaserPerformance´s agreements with Kirby Inc. had been terminated. Both ISAF and ILCA chose to ignore that request, citing the need to keep a flow of boats reaching the market.

The named parties have been given 21 days to respond to a Summons.

ISAF´s Secretary General Jerome Pels have advised Sail-World that 'ISAF has not previously seen all the exhibits. They were sent to us on 5 March. ISAF has sought and been granted extra time to respond (to the summons) and ISAF does not intend to make a statement until we have responded.

In contrast, ILCA, who had previously said that it had not been privy to all the 'Kirby agreements' released an immediate statement.

ILCA said 'In addition to naming LaserPerformance, the complaint also names both the International Sailing Federation (ISAF) and the International Laser Class Association (ILCA.) Both have been included in the complaint because ISAF plaque sales to LaserPerformance were continued after Kirby, Inc. informed the ILCA and the ISAF of its termination of agreements with LaserPerformance.

‘The decision to continue ISAF plaque sales (and continue to report them to Kirby, Inc.), taken only after consultation with ILCA's legal advisor and close discussion with ISAF, is seen to be in the best interest of the sailors as it maintains the flow of boats and equipment until such time as a resolution to the dispute is reached.

‘It has always been ILCA's opinion that the dispute between Kirby, Inc., and LaserPerformance is between those two parties and should be resolved between them without the need for involvement of either the ILCA or the ISAF. As has always been the case, the ILCA remains ready to fully abide by the outcome of the resolution. Further, the ILCA is optimistic that the filing of this complaint will finally bring resolution to this long standing issue.

‘It is interesting to look back in time, last year the then ILCA President Heini Wellman said – ‘a builder also needs a building agreement from Bruce Kirby or Bruce Kirby Inc. This provision is mostly historical. The rule was instituted at a time when Bruce Kirby held certain design rights. The ILCA is not a party to any of these 'Kirby' agreements.

‘We also took legal advice. The lawyers also informed us that the Kirby design patents had in fact expired.’

The response from Bruce Kirby, at the time was forthright. ‘Wellmann has stated erroneously that the Kirby Inc rights have expired in Europe. ‘These rights are based on Designer / Builder contracts, not on copyright, and they are valid with all Laser builders - Performance Sailcraft Europe, Laser Performance in the U.S.A., Performance Sailcraft Japan and Performance Sailcraft Australia.

The exhibits presented to the US Federal Court certainly seem, in this scribes opinion, to support Kirby`s position and many observers are wondering just how ILCA´s lawyers were able to advise their client without access to all these documents, none of which appear to be ´design patents'.

It seems there might be some difficult decision making ahead. It’s noteworthy that the ILCA Executive Secretary Jeff Martin, is also the Classes Committee Chair within ISAF. His initials JM appear on many of the documents in the list of Exhibits presented to the court.

LaserPerformance themselves made a statement this week via their US office

'Bruce Kirby and Bruce Kirby Inc. have filed a legal complaint against LaserPerformance entities, the International Sailing Federation Limited ('ISAF') and International Laser Class Association ('ILCA'). A number of false accusations and claims have been made in the document.

'LaserPerformance vehemently deny the allegations made by Mr. Kirby and maintain that these legal proceedings are vexatious in nature at best. LaserPerformance will take all necessary action to contest and defend these ill-conceived and meritless claims.

Bruce Kirby is not available for comment at the moment, but he previously indicated to Sail-World his desire not to involve ISAF and the ILCA in the ongoing dispute and he had hoped this matter could be resolved by Laser Performance paying its long overdue debts to him.

But he said some time ago that by their (ISAF and ILCA) continuing to supply plaques to LP they were assisting LP´s activities, in spite of his formal request to them not to so do.

This meant that their actions would become subject to examination though the courts, unless they reversed their positions.

So there are interesting times ahead, an examination of the exhibits show that Kirby has been communicating with the LaserPerformance group, ILCA and ISAF, over the last year, seeking resolution, now it’s the turn of those groups to respond.

Of just two thing we can be sure, the lights will be burning at night and the legal bills will be rising.

Attached is a copy of the Complaint, which has already been widely circulated and a list of the key exhibits, now in the public domain, which can be purchased via an online court reporting service.

Some of these exhibits have already been posted on the Laser forum site and it would not be a surprise if more were posted there.

Complaint - Bruce Kirby, Inc. et al v. LaserPerformance (Europe) Limited et al. 51:1114 Trademark Infringement

Exhibit 1 – Kirby Dinghy specification
Exhibit 2 – Trademark Principle Register dated November 11th 2008
Exhibit 3 - Agreement relating to the International Laser Class Boat between:
The International Yacht Racing Union International Laser Class Association IYRU Holdings Limited
Bruce Kirby, Inc. Bruce Kirby and Laser International Holdings (1983) Limited
Dated 30th November 1983
Exhibit 4 - Licence Agreement between Bruce Kirby and Brook Shaw Motor Services dated 11th July 1983
Exhibit 5 – Agreement amending License between Bruce Kirby Inc and Performance Sailcraft Europe dated 30th August 1995
Exhibit 6 – Signed agreement dated 3rd May 2005 to amend section 10.6 of Exhibit 4
Exhibit 7 – Third Amendatory Agreement dated 16th June 2005 to replace section 10.6 of Exhibit 4
Exhibit 8 - Licence Agreement between Bruce Kirby and PY Small Boats dated 31st March 1989
Exhibit 9 - Amendment to Licence between Kirby and Sunfish/Laser dated 25th March 1997
Exhibit 10 - Trademark Principle Registration for Laser for PY Small Boats dated June 11th 2011
Exhibit 11 - Notification to declare default against Quarter Moon Inc dated 17th July 2012
Exhibit 12 - Letter to Quarter Moon Inc terminating rights to build dated 11th October 2012
Exhibit 13 - Letter to Laser Performance re default to pay royalties dated 11th October 2012
Exhibit 14 - Notice of termination and copy past letters to Laser Performance dated 1st March 2013
Exhibit 15 - Letter to ILCA requesting termination of issue of plaques by Quarter Moon dated 11th October 2012
Exhibit 16 – Image of the Laser plaque
Exhibit 17 - Memo from ILCA detailing Laser plaque despatches to Quarter Moon – Laser Performance North America, dated 28th August 2012
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