Lotus Naming Row - The Verdict
by Jack Lamure on May 27th, 2011Wow, after a very long time, Tony Fernandes is a happy man - the Team Lotus (green and yellow cars) can continue to race in F1 under the name 'Team Lotus'. The Group Lotus team (black and gold) can also race under their name and use 'Lotus' as a name on it's own.
It's all a bit confusing, but essentially pending any appeals, nothing has changed in F1 at all - Team Lotus is still Team Lotus and the Lotus Renault is still Lotus Renault - sponsored by Group Lotus.
Tony Fernandes' Reaction (from TeamLotus.co.uk):
"We wanted to develop a long-term relationship with Group Lotus and help them sell more cars around the world but that door closed and now we are delighted that we can turn our attention to ensuring success for Caterham Cars on the road and Team Lotus on track. These are two very exciting brands and their future development, bringing these two iconic brands together under the Caterham Team Lotus umbrella, will see us introduce new Caterham cars and a range of new Team Lotus brands into the global marketplace. Now our main aim is to build on the solid foundations that has made Caterham Cars the model for how to run a profitable contemporary car company and add more history to the incredible story of Team Lotus over the coming months and years and with the people, spirit, passion and determination we have in both businesses we know that marks the next stage in our incredible story."
Full details (from Group Lotus' website):
Mr Justice Peter Smith today gave his judgement in the dispute between Group Lotus plc and Team Lotus, Tony Fernandes and others in respect of the right to use the name “Lotus” in Formula 1.
Judgement Summary
- Group Lotus has the right to use the name “Lotus” on its own within Formula 1
- Group Lotus entitled to race in the historic black and gold livery
- 1Malaysia Racing Team (1MRT) ruled to be in breach of licence agreement, Group Lotus awarded damages
- Team Lotus Ventures Limited trademarks revoked for non-use
- Group Lotus trade marks unaffected
- Group Lotus has the right to use the Lotus marque on cars for road use
The Judge found that:
- Group Lotus has goodwill associated with the name “Lotus” in Formula 1 and is free to compete in the sport under that name using the Lotus roundel;
- Group Lotus is entitled to race in F1 using the historic black and gold livery;
- 1MRT is in breach of the Licence granted to them by Group Lotus to race in F1 under the name Lotus Racing and has awarded Group Lotus damages in respect of that breach;
- Team Lotus Ventures Limited’s trade mark registrations in the name of Team Lotus are cancelled as a result of non-use;
- Group Lotus trade mark registrations are unaffected; and
- Group Lotus has the right to use the Lotus marque on cars for road use.
The Judge also found that Team Lotus has the right to continue to race in Formula 1 under the name Team Lotus but the effect of the Judgment is that only Group Lotus can use the name “Lotus” on its own in F1. Group Lotus is concerned that this aspect of the Judgment will cause confusion in the eyes of spectators and the wider public. Accordingly, Group Lotus is seeking leave to appeal so that the right to use the Lotus brand in Formula 1 is clarified once and for all in the interests of the sport and the fans. Group Lotus and its shareholder Proton Holding Bhd are confident of success on appeal.
Speaking after the judgement, Sarah Price, Head of Legal, Group Lotus plc said: "Group Lotus is pleased that its right to race under the Lotus name in F1 has been upheld and that the Defendants’ attempts to stop that have failed.
“The on-going dispute with Team Lotus and associated companies has been a cause for concern for all at Group Lotus. Despite the detailed judgment there are issues which still require clarification and we remain committed to obtaining this much needed clarity for the many fans of the Lotus marque - we are extremely grateful for their continued support. The decision to appeal has not been taken lightly.”
The Backstory
Fernandes' 1Malaysia Racing entry gained the rights to the Lotus name on licence from car firm in late 2009. When Group Lotus decided they wanted to enter F1 alone - eventually linking up with the Renault team - Fernandes bought the rights to the Team Lotus name, which has been owned by David Hunt - brother of 1976 world champion James - since 1994.
Group Lotus subsequently launched legal proceedings against Fernandes, arguing that Hunt was never in a position to sell the rights. Meanwhile, they invested heavily in GP2 squad ART (painting the French squad's cars the same British racing green as the Team Lotus F1 machines) whilst Fernandes set up his own GP2 team - naming them Air Asia - and purchased British manufacturer Caterham.
Comments and Discussion
Great news that common sense prevailed. I was at the hearing earlier in the year and sent Team Lotus this...
I was in the high court today for the hour leading up to lunch, basically during that time two Group Lotus employees where discussing what was arranged regarding merchandise sold through 1 Malaysia Racing.
The main point that came across is a decision to provide your team with a list of products that you may not sell should have been given to you two months prior to the termination of your licence, however Group Lotus had not provided this information at all. It was also apparent that before supplying you with that list Group Lotus had not restricted you in an way on the merchandise that 1 Malaysia Racing could sell.
The judge seemed annoyed at the Group Lotus barristor and displeased with the way he had prepared the witnesses from Group Lotus.
From what I saw today, it appeared the termination of the right to use the Lotus name in F1 would be deemed as a bad move by Group Lotus and the case was moving towards the results that you and the team must be hoping for.
During the hearing the judge brought up the quality of sample goods that was provided to Group Lotus, which you had for sale online at the time. The Group Lotus employees felt that these goods where of inferior quality, however when the judge asked them further questions about it, it transpired that this was not in the agreement with 1 Malaysia Racing. This kept cropping up and I did get the impression that they where personal views of the Group Lotus employees and not officially minuted in any of their meetings. The judge seemed to take the opinion that their unofficial views where not relevant if they had not been expressed at the time to another employee.
...I wasn't going to publish that before the case just so it wasn't picked up and didn't affect things (also they're my own opinions... etc.)