Seeing double

ITIC insured a naval architect who was contracted to design two superyachts for two different owners, both to be built at the same yard. Each owner was under the belief that they were to get a unique yacht.

In the contract for the first of the two yachts, the designer contracted on the basis that all intellectual property rights in the project would belong to the owner in perpetuity.

The second yacht was built and launched with the yard using the same engineering platform. The platform dictated the overall look of the yacht, but the naval architect went to great lengths to make material alterations and embellishments to make the second yacht a new work and/or design.

After the launch of both yachts, they happened to be at the same anchorage, at which time the first yacht owner’s partner commented that the yacht next to them looked very similar. Shortly afterwards the first yacht owner commenced litigation against the naval architect for breach of their design contract.

The merits of the case were strongly in favour of the naval architect as they could show material alterations and embellishments in the second design. Moreover, any similarities were either a result of the underlying engineering platform of the yacht or were considered to be the house style of that particular naval architect. For example, a designer like Porsche may manufacture many different models of car, but they all have a particular house style – so a third party will instantly know it is a Porsche. This is the same reason why the owner chose the particular yacht designer.

The dispute was brought in multiple jurisdictions. The matter was defended and eventually the claimant gave up. However, the legal costs to defend the naval architect totalled EUR 340,000 which ITIC paid in full.