Lotus Racing bringing High Court action over right to use “Team Lotus” name

Lotus Racing are to contest Proton’s claim that it cannot use the Team Lotus name in the English High Court.

A statement issued by the team today said:

We have [...] today issued proceedings in the English High Court for a declaration that Team Lotus Ventures has the rights to use the Team Lotus name.

Lotus Racing chief executive officer Riad Asmat said:

This has been an incredible year for everyone associated with Lotus Racing. Last week we brought Team Lotus back to the Formula One grid when we announced that we had bought Team Lotus Ventures from David Hunt, and would be racing as the successor to one of the most iconic names in world motorsport. This year, we have established ourselves as the leading new team in Formula One as a licensee of Group Lotus, and, although we all dreamt of bringing Team Lotus back to where it belongs, we could not do so in 2010 because those rights were owned by Team Lotus Ventures. As Tune Group has now bought Team Lotus Ventures it means we can now use the Team Lotus name for 2011 and beyond. We are all delighted we can go into 2011 with total confidence in what we own, and what we can take to the track.

However, given that this is contested by Group Lotus we think now is the time to clear this matter up so there can be no further arguments. We have therefore today issued proceedings in the English High Court for a declaration that Team Lotus Ventures has the rights to use the Team Lotus name and everything associated with that brand in relation to Formula One.

Racing under the Team Lotus name from 2011 means our licence with Group Lotus has now come to an end. In reality, this has nothing to do with how we will go racing in 2011, as the ownership of Team Lotus has been clearly defined for many years. David was approached a number of times about selling the rights of Team Lotus Ventures, including one official offer of from Proton / Group Lotus themselves. That must have been tempting for David, as the rightful owner of the Team Lotus brand and its rights. Oddly enough, Group Lotus also recently tried to revoke the Team Lotus trade marks at a hearing at the Trade Mark Registry, but they were unsuccessful. I suspect David?s misgivings about their previous offer to buy were justified by that action.

The licence debate really is a non-issue. It was a simple licence, attached to a one year sponsorship deal with Proton for 2010 alone, and in fact for a tiny proportion of the amount invested by the shareholders into the team ?ǣ approximately 1.5% of the total budget. Unfortunately we never reached the point where we discussed extending that one year deal. When we signed our licence to compete as Lotus Racing with Group Lotus, they were very clear that we could not make any reference to Team Lotus as they had no rights at all to the Team Lotus name or its rights. In fact, in the licence agreement between 1Malaysia Racing and Group Lotus the use of the Team Lotus name is expressly prohibited as they had agreed contractually, as long ago as 1985, that they had not rights to use that name. That was obviously something we had enormous respect for, and made no attempt to change until we could do so rightfully, and with a very clear understanding of what we had acquired in Team Lotus Ventures.

So now the licence we ran under this year has been withdrawn by Group Lotus, and while we accept that this obviously means we have reached the end of that chapter, it opens up a new and very exciting one for everyone in our team. There will have to be some discussions with Proton and Group Lotus about the entitlement to terminate the licence. Frankly, they are trying to say that some very trivial points, including T-shirt design approvals of all things, gave them the right to terminate, but we thoroughly reject this.

Now we look to the future. The details of what has been going on behind the scenes are now coming to light, and that?s good because it means the shareholders of Proton, the government, will now know the truth of what has been going on. However the important thing is to look at what we are doing to guarantee future success. We have already invested heavily in ensuring the Malaysian / ASEAN motorsports platform grows, something that cannot be said for our colleagues at Group Lotus. We created a world first when we ran Nabil Jeffri in our aero test earlier this year – the youngest ever F1 test driver. Fairuz has been gaining invaluable experience at the highest level by driving for us, and, through Tony and Din?s AirAsia Driver Development programme, we are giving young Malaysian / ASEAN talent the chance to reach the top. We are so proud to have laid the foundations for future success, and our fans acknowledge this every day. Personally I think it?s odd that our colleagues at Group Lotus have not embraced what we are giving them ?ǣ a global platform for creating huge awareness and great value for their operations, all at no cost to them. In one year we have made huge strides in the growth of Lotus Racing, and now it?s all about Team Lotus.

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36 comments on Lotus Racing bringing High Court action over right to use “Team Lotus” name

  1. ‘When we signed our licence to compete as Lotus Racing with Group Lotus, they were very clear that we could not make any reference to Team Lotus as they had no rights at all to the Team Lotus name or its rights.’

    Nail. Coffin. Hopefully this is resolved swiftly in 1Malaysia’s favour.

  2. Chippie (@chippie) said on 27th September 2010, 18:38

    This reminds me of the situation in swiss army knives: There are two competing companies, one company calls its product ‘the genuine’ and the other calls its product ‘the original’.

    As a Lotus fan I suppose I’m gonna have to take a side here and so I’m gonna support Fernandes ie: ‘the genuine’

    • Uncle Bob said on 27th September 2010, 19:28

      neither are genuine! They’re about as genuine as the current Mini! At least that pile of crud will still be built in the UK next year.

      • bosyber said on 27th September 2010, 21:04

        For me those “genuine” or “original” usually are the thing that alerts me someone bought a brandname but does not have any actual connection to the original manufacturers of the product.

        Of course, Lotus Racing started that way, but Fernandes has been working hard to build a connection, so now I feel he is justified in using the Team Lotus name too. Clever guy, really.

  3. To me this seems to be a case of Group Lotus seeing how well Lotus Racing have done, and all the goodwill they have built up and are now trying to muscle in on it.

  4. All this comes down to knowing if the original Team Lotus operated under the license of the old Lotus group.

    • No it most certainly didn’t. When Group Lotus was created in the 60’s as a public limited company, Chapman went to great length to ensure that his passion the racing company was kept separate. He didn’t want shareholders interfering with his racing… exactly as is happening now. Group lotus has never ever owned any part of Team Lotus….

  5. How much is Group Lotus worth? Maybe Tony Fernandes should just buy them up and have done with it!!

  6. It might not fit into their strategy (for the Ferrari guys now heading Lotus Cars) and Fernandez might be with people in Malaysia who are not supportive of their strategy of putting effort of a struggling car company into racing instead of building on a production platform. But it does make a lot of sense to just lift along for Lotus and get their car brand image improved for free.

    I wouldn’t be supprised if this costs the current Group Lotus their heads in a few months time.

  7. This explains the history nicely:

    http://www.vivaf1.com/blog/?p=4824

  8. Sparks are just about to fly!!!

    And, personally i can see 1 Malasia leaving the Malasian motorsport body for the UK body, posibly making it the 4th UK team on the grid.

    We will see what the High Court says in time, and im pretty sure that it will come down on Mr Fernandes side.

    • Himmat said on 28th September 2010, 9:06

      I don’t think that’ll happen. Why? Because Tony has made a promise to make this team Malaysia. And I believe he will deliver on that promise of his.

  9. All is not as simple as it seems.
    As you go in the site entrance at Hethel, just as you stop to have your cameras and phones confiscated, you will see Lotus World Champions” and a list of dates (now way in the past) up on a big board. This is the entrance to Lotus Group, Lotus Cars and Lotus Engineering, they claim an attachment to the “Team Lotus” image because they Lotus Cars make the sports cars we know (Elan, Esprit, Elise Exige etc) and used to make the VX for GM Vauxhall. Lotus Engineering design and prototype bits of cars for other people they are run as a separate company and almost everything they do is top secret.
    The Lotus image automatically in the, public eye associates the name Lotus with sports cars (and hi-tech engineering for some of us).
    Lotus Group will claim that the use of Team Lotus is “passing off”, invoking a mental association with the products of Lotus Group. They may be successful, they may claim that an unsuccessful “racing Team Lotus” will be defamatory to the Car brand.
    The association is strong, I still want to own KAR120C the “Prisoner’s” Lotus Seven but this (actual car) and the Seven brand have been owned by Caterham Cars for millenia, but you still think Lotus if you see one on the road.

    On the other hand David Hunt was the clear owner of the Team Lotus brand and logo/wordmark, he sold it to Tony and it could be claimed that Group Lotus would benefit from the exposure/free publicity that an inferred association would bring, indeed they may already have raised the Lotus brand awareness.

  10. verstappen said on 27th September 2010, 20:31

    Maybe I’m too much into F1, but I don’t see the added value for a racing team to use an old name with which it has nothing to do.

    You might argue sponsorship, but I found that hard to believe. The real money comes from Fernandes and Malaysia, not from the other partners.

    And money follows results.

    And if you really want a link with a car manufacturer, why not use Proton?

    Or maybe the partnership with NAZA group could be used. NAZA is the dealer for the koenigsegg… Now that would be an exciting teamname!

    • verstappen said on 27th September 2010, 20:33

      * forgot to mention that that using proton is now probably a dead end…*

    • I don’t see the point either, other than on the level of superfcial marketing interests.

      At least with fairly recent teams like Red Bull and Virgin, the marketing angle is obvious and authentic.

      In the case of Lotus, as much as I love the historical brand and the current livery, it’s obvious that the relationship between the current team and the name is purely commercial. There is no real lineage or racing heritage that justifies the name.

      I’d be happier if they let the name go and found real success under a more authentic branding.

  11. As a Lotus fan I hope the court finds in Fernandes’s favour. I am surprised that group lotus are doing this as for them it was free publicity. I suppose they have seen that it’s is not going to be a flop and now want in on the team without having to take the risk of starting up a new team.

    • actually I suspect the opposite. Group Lotus are partnering with ART in lower formulae, I suspect they eventually want to enter F1, for which they will need the Lotus name for themselves.

      If they wantd in on the current Lotus team they would have bought in and extended the license for the name. They’ve done the opposite, withdrawn the license and fighting to prevent any association between Lotus (team) and Lotus (cars).

  12. JPedroCQF1 (@joao-pedro-cq) said on 27th September 2010, 22:11

    I hope this ends well for Tony Feranndes. The last thing I want to see is the best of the new teams (it’s mine consideration, doesn’t matters who will be nr.10 team) going away of Formula One because of a guy that doesn’t knows even what’s Formula One (I’m refering to the Proton president).

  13. 1 With Chapman’s family backing Fernandes, Lotus Group should just loose their rights to use ACBC in the Lotus logo. :)

    2 But now the weird thing will be to hear the Malaysian anthem for the first Team Lotus win.

  14. sam crawford said on 28th September 2010, 2:33

    Ban them all from having names, just give them numbers and allocate each team a colour:

    Ferrari – Red
    Red Bull – Blue
    Mercedes – Grey
    McLaren – Orange
    Renault – Yellow
    Force India – Green
    Toro Rosso – Purple
    Sauber – White
    Virgin – Pink
    Lotus – Black
    HRT – Brown

    No sponsors, no names, just cars racing hard :D

    (don’t take this seriously btw)

  15. Alternation said on 28th September 2010, 4:47

    This Team Lotus ‘might not’ be of the Chapman’s Lotus but with Tony at helm, he could very much bring it to new era of glories. Proton certainly expect that and wanting a bigger bite.

    If the case is taken to a UK court then Proton will lose but the same cant be said if in Malaysian court due to gov influence and favor to Proton.

    • George said on 28th September 2010, 9:42

      Proton wouldn’t have the grounds to take the trial to Malaysia. Team Lotus Ventures Limited is a UK company and so the British courts would decide who owns the brand.

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