Why is LaserPerformance still not an approved ILCA Builder?

Many Laser sailors have contacted LP and asked why LP has not signed the ILCA Builder’s Agreement, reappointing LP as a Laser Builder. We take this opportunity to update you on the latest developments.

In mid-August 2019 the World Council of World Sailing voted for Laser to be the single-handed dinghy sailboat for the 2024 Olympics. This was based on the World Sailing Submission that said the following about LP and PSA:


“(c) ILCA is in process to approve LaserPerformance Europe as a builder. LPE has agreed to the terms of approval and ILCA is now scheduling the required factory inspection. LPE has annual capacity of approximately 2,000 boats per year. ILCA expects LPE can be approved as a manufacturer in the next 4 - 6 weeks.

(d) ILCA has again confirmed that Performance Sailcraft Australia has the tooling and capacity to produce 30 - 35 boats per week in its current facilities. Current annual capacity is, therefore, between 1,400 and 1,700 boats per year as required to meet demand.  PSA owns several more buildings on their current property and can increase capacity above this rate if required in the long term.”


ILCA undertook LP factory inspection in August 2019 and subsequently informed us that a Builder Agreement would be forthcoming.  Based on information provided by ILCA to World Sailing, LaserPerformance expected to be reinstated by the end of September and resume normal supply to its markets in October 2019.  However, LP did not receive Builder Agreement for its consideration.


On October 30, 2019, LP met with Mr. Andersen, President of World Sailing, at the annual World Sailing meeting in Bermuda. LaserPerformance informed Mr. Andersen that LP has not received a Builder Agreement and has not been reinstated as a Laser Builder. He expressed surprise, noted that he was told that LP would be reinstated following an accelerated process, and added that he would follow-up. Nothing came of it.


LP also met in Bermuda with ILCA Executive team, who promised that a Builder Agreement document would be forthcoming before the ILCA annual meeting. The meeting came and went, and LP was not sent a Builder Agreement.


On November 16, 2019, LP received the following ILCA email:


As we discussed recently in Bermuda, we are close to completing a builder agreement with the intention of approving Laser Performance as a Builder. So that there are no unnecessary delays in providing the agreement to you when it is complete, we ask that you sign and return the attached non-disclosure agreement, which is required of all builders. Please let me know if you have any questions."


An NDA was signed by LP on November 26, 2019. Because the term “Laser” was not associated with the word “sailboat” in the document, LP added the word “Laser”; this revision was accepted by ILCA.


On December 6, 2019, almost four months after the World Sailing vote, LP finally received what ILCA considered a Builder Agreement, but to LP it was a License Agreement. After review, LP provided ILCA with the following comments on the document on Dec 26, 2019:


“LaserPerformance’s signed an NDA strictly related to a Builder Agreement and expected a document that would reapprove us as a Builder after undertaking the inspection of our manufacturing premises. Instead we have received a document that is a combination of a new Builder Agreement, License Agreement and Commercial Agreement, all packaged into one. We do not agree nor do we accept this and we ask you to provide LP with a document that strictly reinstates LP as a Builder, which is the commitment you gave to World Sailing and, based on that, WS’s World Council voted to include the boat Laser in the 2024 Olympics. Like the previous Builder Agreement of 2005, the document should bind the parties (LaserPerformance, PSA, PSJ and ILCA) together to act in good faith to supply One Design boats with plaques and buttons."

LP made and asked for clarifications:

  • What is the basis for PSA and PSJ serving as licensors and why is this not in conflict with FRAND policy? It is legally questionable whether the LCM can be licensed by any party, nor can the licensors charge fees for the license, which is collected and distributed to the licensors (PSA and PSJ) based on a separate agreement. Why are sailors being taxed, since the cost will be ultimately passed onto them? This needs total transparency and if there is an administrative cost to be covered, then this needs to be clearly articulated and costed. If this is not done, then ILCA risks its credibility and questions will arise as to whether it has stayed within its constitutional mandate.

  • ILCA also designates itself as a licensor, providing a license to the licensee (LP) to use the term “ILCA” on boats and parts. We understand that “ILCA” as a brand is owned by the US registered company Weather Helm LLC and not ILCA. If, in fact, ILCA does have ownership rights, how can it legally license this intellectual property to builders when its Constitution states that it is a non-profit and not a commercial enterprise? LP does not require, nor does it accept a license for the name “ILCA”, hence no licensing agreement is required.

  • While LP has fully agreed to the Olympic Equipment Policy and FRAND requirements (and signed the requested document), LP does not agree to the introduction of generic names, regardless of what “vote” has taken place. This will lead to the demise of the class and tremendous difficulty maintaining One Design principles.

  • LP expects that those seeking to supply in territories where LP is the Laser trademark owner will apply to LP for a license to do so. LP will follow the guidelines established for new builders and suppliers: if they meet the criteria, LP will grant them a license to supply in our territory.  The license will be royalty-free.

  • Any ILCA event must abide the Trademark Agreement signed between LP (Velum) and ILCA in 2019, which gives ILCA the right to use the Laser trademark, particularly at their events.

  • LP did not agree to ILCA appointing an arbitrator, nor did it agree to providing company financial information on an annual basis.


    On December 27, 2019, LP received the following response to our comments from ILCA:

    Thank you for your message and your comments. It is good to see that the majority of the agreement is acceptable and that there are only a few points to work through. We are particularly pleased to note that Velum will provide a royalty-free trademark agreement to approved manufacturers. As you know, we are in the process of approving new builders and we will advise the successful applicants to request that license from you.

    Separately, we will send a response to your specific questions without copy to the entire World Council since the larger group is not directly involved in the negotiations nor, at the request of the licensors, currently privileged to the specific terms of the agreement.”

    In the third week of January 2020, ILCA announced on its website that it has approved seven new builders for the next stage of the approval process. All seven new builders are in territories that LaserPerformance owns the Laser trademark. On January 29 ,2019, ILCA sent the following email to LP:

    We have noted your comments regarding the Approved Builder Agreement. For clarification, the licensing arrangement for the ILCA Build Manual is as agreed by the currently approved Builders and as approved by unanimous vote of the World Sailing Council under the terms of its Olympic Equipment Policy and antitrust requirements. It should be noted that this policy has also been reviewed by the EU Commission, which continues to oversee the process of builder approvals. The agreement attached for LPE is the same as that which will be provided to each new builder applicant under this approved procedure.

    Reviewing your comments, we have attached is an updated agreement that changes paragraph 5.9.2 and now has the World Sailing President select an arbitrator if the Parties cannot agree to the arbitrator. We look forward to hearing from you with your positive response to this offer.”
     

    ILCA has changed its position about addressing the serious concerns LP raised related to commercialization of ILCA and the roles of PSA and PSJ. There is no clarity on why World Sailing and its Council was misinformed as to ILCA’s true intentions of dragging the process out and not addressing LP’s trademark concerns and explanations.

    Meanwhile, Performance Sailcraft Australia has used the past 12 months to build “ILCA” branded Laser boats, ordered ILCA banded parts from vendors, supplied plaqued ILCA branded boats to events in Canada, offered exclusive event Laser boats to ILCA until 2028, established a distribution network in territories where LP owns the Laser trademark and has started to sell  ILCA-plaqued boats at prices that are much higher than LP ever charged. For example: sailboats.co.uk is selling Lasers for the price of £5,850. It is a classic monopolistic strategy, supported by ILCA, knowing it will take a long time for new boat builders to supply and distribute complete sailboats boats (not just hulls). By that time, PSA will have established itself globally as the sole supplier and continue to command whatever price it seeks. ILCA’s conduct has been questioned by the European Laser Class Association (EURILCA), where most Laser Class members are located. EURILCA has:

    • Questioned the validity of the vote taken by ILCA which was used as an excuse to separate the builders from the trademark owners.

    • Questioned ILCA’s stealth development of the C-rigs with designer Julian Bethwaite, PSA and PSJ, which Bethwaite mistakenly revealed in his blog. 

    • Requested and has been denied basic documentation such as ILCA financial information, schedule of fees being charged to each builder and a copy of the Builder’s Agreement.

    EURILCA has demanded from ILCA, transparency, accountability, and term limits for ILCA management and the World Council. ILCA World Council agreed to form a group to recommend constitutional changes. But, given EURILCA’s minority status on the World Council, there is little hope that they can vote in and implement basic governance improvements.

    Should LP stand idly by and see the demise of the iconic Laser sailboat, the complete monopolization of the Class by minority interests, and the commercialization of the Class?

    LP is looking at its options.  Meanwhile, LP continues to offer to the many Laser lovers who do not race in ILCA-sponsored races, the Laser Club Edition – the same iconic Laser sailboat that LP has always been selling, minus the ILCA-issued plaque and button on the sail. Your price:  €4,514 in Europe, £3,995 in the UK and $5,399 for North America and the rest of the world.

    We will also have exciting news about the new Laser League – to be launched on a global basis at the UK RYA Dinghy Show on February 29. We’ll let you know more on that date.

    And there is much more to come… Let’s go Laser Sailing!