Courtrooms and the America’s Cup – patent infringement set to be the latest out-of-water battle

The America’s Cup (the “Auld Mug”) is the world’s oldest sailing trophy and enjoys a storied history of fierce competition – both on and off the water.  Whereas legal drama throughout the years was previously restricted to claims of sabotage, subterfuge, cheating or some far-fetched interpretations of the “rules”, the upcoming 2021 event has thrown up yet another reason to get off the water and into the courtroom – allegations of patent infringement.

 

Background

The 36th edition of the America’s Cup is scheduled to be held in Auckland, New Zealand, between 6 and 21 March 2021.  It pits the holders, Emirates Team New Zealand (ETNZ), up against the winner of a challenger series to be contested between Luna Rossa (Italy), Ineos Team UK and American Magic.  The concept of the challengers sailing off before matching up against the holder is nothing new.  However, what is unique to this event is the category of yacht in which the event will be contested – the new “AC75” (America’s Cup 75 class) is a 75-foot (23 metre) hydrofoil monohull vessel.  To the layperson, it’s a regular yacht that “flies” just above the waterline.

Again, the concept of a flying (or more correctly, “foiling”) yacht is nothing new.  For example, the 34th (2013) and 35th (2017) editions (held in San Francisco and Bermuda, respectively) used a class of foiling catamarans (double-hulled yachts), which, when conditions and crew-work were optimised, was able to get up on its foils (i.e., lift the hulls out of the water), thereby minimising drag and increasing speed.  The ultimate goal, of course, was to complete the entire course on foils, which was referred to as a “dry lap”.  Foiling catamarans certainly provided for spectacular racing over the two events.

Following the narrowest of misses in 2013, the 2017 event was won by ETNZ.  In accordance with the “rules” of the event, ETNZ not only got to host the next edition, but also had the authority to decide upon the class of boat in which the event would be contested.  Following lengthy consideration (much of which was centred upon conditions likely on the Hauraki Gulf where the 2021 event would be contested), ETNZ opted for a new class of boat – the AC75 foiling monohulls.

What’s a “foil”?

As shown on the official America’s Cup website, the hull of the AC75 lacks the traditional centred keel, but instead has a retractable “foil” on either side. When one of the foils is engaged with the water, and provided sufficient speed is reached, it acts in combination with the rear rudder foil to force/lift the hull out of the water, which in turn imparts the speed advantages mentioned above.  In operation, the leeward (on the side opposite to which the wind is coming from) foil is engaged with the water whilst the windward foil is retracted or held out of the water.

Shown below is an example of ETNZ’s test boat “Te Aihe” (a 50-foot scaled-down version of the AC75) foiling successfully during testing.

Despite the conceptual imagery linked above, all four syndicates are employing similar, although subtly different, foil designs.

So, what’s the patent problem?

Manoel Chaves, a Brazilian naval architect and boatbuilder, is the patentee in respect of New Zealand patent 740860, dated 31 October 2016.  NZ’860 is a granted patent derived from PCT/BR2016/050275 via WO 2017/083947.  It is entitled “Sail boat propulsion and stabilisation system and device”, which is more specifically characterised by IPONZ as a “Sail boat hydrofoil with pair of wings on opposite hull sides with downward keel and outstanding lift wing, with pivoting of keels and wings independently”.

According to media reports, Mr Chaves believes the canting foil system used in the AC75 boats is covered by NZ’860.  Mr Chaves’ representatives are understood to have contacted ETNZ in this regard.  However, the same article quotes ETNZ as having already denied patent infringement as of July 2020.

What does NZ 740860 describe and claim?

Figure 1 of NZ 740860 appears to illustrate, broadly, a hydrofoiling system arguably similar to those found on the AC75 yachts:

As we know, “similar” is a subjective term. That said, claim 1 of NZ 740860 is reasonably wordy, and construing it would no doubt account for several days’ court time should the matter ever proceed to trial:

  1. A system for propelling and stabilizing a sail boat, comprising a control panel, standard or electronic stabilization, actuated by a battery connected to a hydraulic aggregate that is connected to directional valves and solenoids through which each device of a pair of devices for propelling and stabilizing the sail boat is independently actuated respectively to larboard and starboard, and each device is provided with a wing keel, a counterweight or “lift” wing joined by a bulb, a cylindrical actuator of the counterweight or “lift” wing, a rotary hydraulic actuator for hoisting the assembly, an articulation shaft, which runs in the direction of the counterweight or “lift” wing and transverse to the keel, and a tilting shaft for the assembly, which is coupled to the boat broadside or to a mounting base provided for the boat broadside of already existing boats, beside sensors of the angle of attack of the counterweight or “lift” wing.

The dependent claims (claim 2, in particular) are even longer.  According to the above-linked media, ETNZ’s July 2020 response to Mr Chaves was that NZ’860 defines features not found on the AC75 yachts.  Quite what those features may be based upon my “elementary” understanding of the foiling system used on the AC75s and chemist’s understanding of claim 1, is uncertain.

Legal permutations

As noted above, all three challengers (Luna Rossa, Ineos Team UK and American Magic) are employing hydrofoils broadly similar, albeit subtly different to ETNZ.  If ETNZ is held to infringe, then does it necessarily follow that the three challengers are infringing also?  Alternatively, as the entity that created the new AC75 class, does ETNZ bear any responsibility for the challengers infringing?  Of course, until such time as the matter is formally contested in a New Zealand court, these questions are all strictly hypothetical.

A continuing history of more fun off the water than on it

In my time following the America’s Cup, which dates back to 1983, when Australia II defeated Dennis Conner’s Liberty, the event has been beset with a series of courtroom battles that, depending on one’s perspective, either amplify or detract from the drama on the racecourse.  From Australia’s winged keel (1983), to New Zealand’s “plastic fantastic” fibreglass boats (1987), to New Zealand’s “big boat” challenge (1988), to all the legal jostling regarding the citizenship rule, the use of technology, where the event should be staged when the Cup was held by landlocked Switzerland, etc., this has always been more than just a yacht race.

Watch this space.  The America’s Cup equals high stakes and big money. Whilst not your traditional battlefield for a patent dispute, it does have almost every other ingredient.