Proton say Lotus Racing has no right to use “Team Lotus” name

Heikki Kovalainen, Lotus, Spa-Francorchamps, 2010

Group Lotus owners Proton have denied that Tony Fernandes has the right to re-brand his team as “Team Lotus”.

In a statement released today the company said:

Proton will support Group Lotus in taking all necessary steps to protect its rights in the “Lotus” name, including resisting any attempts by Mr. Fernandes or his companies, or any other unauthorised person, to use the “Lotus” name in the 2011 Formula 1 season.

Update: Lotus Racing bringing High Court action over right to use ??Team Lotus?? name

Here is the full statement from Proton:

There is and always has been only one Lotus, the Lotus started by Colin Chapman. From the beginning Lotus made road cars and raced racing cars. Until 1994, Group Lotus, the road car manufacturer and Team Lotus, which operated the Formula 1 team, were in common ownership with common directors. In 1994, Team Lotus failed and Lotus has not raced since. Since 1994, David Hunt has claimed to have acquired assets of Team Lotus, including its name, from the liquidator. He has never raced as Lotus. Mr. Hunt?s attempt to acquire the name Team Lotus was ineffective. Group Lotus is the owner of all rights in the “Lotus” automotive brand including those relating to Formula 1.

Last year, Tony Fernandes and 1 Malaysia Racing Team recognised this by taking a licence from Group Lotus to use the “Lotus” brand for the “Lotus Racing” team in the current Formula 1 season. With Proton?s agreement, Group Lotus has now terminated its licence to 1 Malaysia Racing Team to use the “Lotus Racing” brand in the 2011 and future Formula 1 seasons as a result of the flagrant and persistent breaches of the licence by 1 Malaysia Racing Team, which were damaging to the “Lotus” brand.

Following that termination, neither 1 Malaysia Racing Team, nor any other company associated with Mr. Fernandes such as Tune Group Sdn Bhd or Team Lotus Ventures Limited, has the authority of Group Lotus to use any “Lotus” brand in the 2011 Formula 1 season. This includes the use of the brand “Team Lotus”.

Group Lotus understands that Mr. Fernandes intends to rebrand the current “Lotus Racing” Formula 1 team to “Team Lotus” for the 2011 Formula 1 season. Mr. Fernandes indicates that Tune Group has acquired the rights to the name “Team Lotus” from a business formerly owned by David Hunt called Team Lotus Ventures Limited. Group Lotus believes these rights to have no proper legal foundation, a fact of which Mr. Fernandes was well aware when his company purchased them.

Proton will support Group Lotus in taking all necessary steps to protect its rights in the “Lotus” name, including resisting any attempts by Mr. Fernandes or his companies, or any other unauthorised person, to use the “Lotus” name in the 2011 Formula 1 season.

Dato? Sri Mohd. Nadzmi Mohd. Salleh, Chairman of Proton Holdings Berhad and Group Lotus commented, “We believe the Lotus brand to be one of the most valuable brands in Formula 1 today. We are the owners of this brand, and will take all necessary steps to protect it. Tony Fernandes has no rights to use the Lotus brand in the 2011 Formula 1 season, and we will strongly resist any attempts by him to use our brand without our permission and will withdraw our sponsorship of the Lotus Racing team.”

??To put it simply, Group Lotus is everything Lotus. The fact that 1 Malaysia Racing Team entered into an agreement with Group Lotus to use the brand means that both Mr. Fernandes and 1 Malaysia Racing Team recognises and acknowledges Group Lotus? rights,?? he added.

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75 comments on Proton say Lotus Racing has no right to use “Team Lotus” name

  1. thats not good…

    it was better that we had Lotus in F1.. now we will have Malysia 1… ;(

    • macahan said on 27th September 2010, 15:48

      What gets me is all the goodwill and cooperation that been done between the car company and the racing team, putting together the show earlier this summer and the visits from the Chapman family and the good words from said family, not to mention the token gift of the “historical” cap at the beginning of the year.

      Why this sudden melt down? Is it because he acquired the “Team Lotus” name while they wanted to get it for themselves and make the F1 team part of the Lotus household and Tony had no interest in it?

      Just seems odd all in all with all the good words that come out from the Chapman family and the car manufacturer since the inception of Tonys Lotus team?
      It all seems to now blown up with the acquisition of the team name from Hunt?

      • I sure looks like Lotus Cars (and its Management of former Ferrari guys) are heading on a confrontation course with Fernandez over the rights and convinced their owners to back them.

        But their claim that Hunt never had the rights has already been denied by the british courts several years back.
        A pretty big mess this is.

    • Uncle Bob said on 27th September 2010, 16:14

      Bringing the Lotus name into F1 was only a cheap marketing exercise in the first place. Hope this embarassing gaff signals the end to the use of such a wonderful name.

  2. Group Lotus challenged this decision in the courts in 1998 – after the Proton takeover – and lost. Thus Group Lotus has no real legal claim on Team Lotus, based on the decisions made up to now.

    • Chris P said on 27th September 2010, 13:59

      Now that sounds interesting. Why on earth would they persist with this then?

      • bosyber said on 27th September 2010, 16:21

        They seem to be claiming the trademark has been unused, has thus lapsed, and since they are Group Lotus car manufacturers, they should have the right to Lotus names in relation with Autosport at this time.

        Might even work, I think, except that Lotus was never really away, of course, in our minds.

        • Well it was not completely gone from racing/motorsport as Clive Chapman used the Team Lotus Classics branding (probalby with Hunts consent).

    • This statement actually shows the shaky ground of Proton as ‘Until 1994, Group Lotus, the road car manufacturer and Team Lotus, which operated the Formula 1 team, were in common ownership with common directors’ is factually incorrect. I was a (very small) shareholder in Group Lotus in the 70’s and 80’s and so was part owner of Group Lotus, but I never had any shares in Team Lotus which was a private company and which was kept very separate. The reports and accounts of Group Lotus at the time made that very clear. Although some of the directors were the same on both companies, many were not. Chapman had a core of directors that he used on all his companies including Mico Light aircraft and speed boats etc, Proton have never claimed ownership of those just because some of the directors were the same.

      I’ve followed Lotus for decades and was always intrigued by Chapman’s convoluted company set ups mainly designed to keep the tax man at bay and him in personal control. I can see why Proton are doing this but I think they are unlikely to succeed.

  3. Chris P said on 27th September 2010, 13:58

    I can’t see this mess getting sorted any time soon.

    I hope the name of Team Lotus does return to the F1 paddock along with confirmation of the rights to use the name.

  4. I’m not great with the legal stuff, but if Hunt “acquired assets of Team Lotus, including its name, then how is his “attempt to acquire the name Team Lotus was ineffective”.

  5. gpcampbell (@gpcampbell) said on 27th September 2010, 14:07

    Fernandes hinted at this in the Monza F1 forum.

    He said about the guy from lotus car company wanting to think its like Ferrari. According to Fernandes they have always been seperate legal entities.

    Furthermore note they’ve never bothered to challenge this till now.

    I tell you what tho, this is one strange situation. I actually supported the new lotus as lotus because it was the car manufacturer’s entry. I always found that quite easy to swallow, I was aware as a fan of the difference between the two.

    • Actually they did challenge it, and lost. See Apex comment above.

    • Do you mean you were *not* aware of the difference?

      I think Fernandes’s team has been a great addition this year. Proton obviously want some of the kudos…

  6. They could be called “team Banana” and it would make no difference to me.

  7. To me, this is Group Lotus trying to jump in on the great success Lotus Racing has been this year, the amout of respect and goodwill they seem to have garnered and really have established themselves as belonging on the grid.

    The statement above states “…flagrant and persistent breaches of the licence by 1 Malaysia Racing Team, which were damaging to the “Lotus” brand.” I’m sorry Group Lotus, but the only organisation damaging the Lotus brand here is Group Lotus itself.

    • bosyber said on 27th September 2010, 16:36

      That part indeed seems rather hard to match with what we have seen of the team and Lotus.

      • Sush Meerkat said on 27th September 2010, 17:46

        I think by success he means by winning the hearts and minds of the F1 circus.

        They started off getting butchered by some established teams but they very quickly settled in, and even Ferrari haven’t said a bad word about them in a while.

        Apart from acid tongued Mike Gasgoyne they seem to be a lovable bunch of people.

  8. Why does Tony Fernandes want to use the Lotus anyway?

    • Himmat said on 28th September 2010, 9:23

      Well, he’s a businessman.

      The thing is, had he taken on a new team name such as AirAsia which he could have easily done at the start of this year, the team would be alien to much part of the world.

      But with the name Lotus, the team has gained respect almost instantaneously. Now, if he can complete the set by getting full rights of Lotus’s racing arm (Team Lotus), then team Lotus will be directly linked to its heritage of the yesteryears.

      I’d say there is so much more economical gains by attaching the team to Lotus instead of any other brand. And Tony ain’t no quitter.

  9. Dingle Dell said on 27th September 2010, 14:14

    Screw the Proton company! Thank God i’m not buying a new Proton car while i’ve previously thought of getting one to replace my old car locally. Creep those guys should be ashamed of ruining the country’s reputation.

    1Malaysia F1 team? Yucks. Dream on, Malaysia Tak Boleh!

    • Prisoner Monkeys (@prisoner-monkeys) said on 27th September 2010, 14:21

      1Malaysia F1 is the name Proton use to refer to Lotus. They obviously can’t call Lotus “Lotus”, since that would be recognising that Lotus have the rights to the name, which is what Proton are trying to prevent. If Proton were successful in getting Lotus Racing to abandon their name – possibly with a view to using it themselves in future – it’s likely that Lotus Racing would be redubbed Team Air Asia. Air Asia was the jewel in Fernandes’ business crown (at least before Lotus Racing), is widely expected to sponsor Lotus Racing (possibly as title sponsor) in 2011 and is the name of Lotus Racing’s GP2 and GP2 Asia spin-off.

      • I agree with you on Lotus probably changing name to (Team) Air Asia (Racing) if they’ll have to change name, but let’s hope they don’t have to.

      • Red Andy (@red-andy) said on 27th September 2010, 18:02

        All this nonsense of “1Malaysia F1 Team” reminds me of those petulant Greek nationalists who don’t like the country immediately to the north of them being called “Macedonia,” and so refer to it as “The Republic of Skopje,” or whatever. I know this case is more complicated with the various copyrights and trademarks floating around, but it nonetheless strikes me as, ultimately, being down to nothing more than petulance.

    • US_Peter (@us_peter) said on 27th September 2010, 19:43

      DD, I’ve considered buying a Lotus in the past as well. I won’t again. If anyone’s damaging the Lotus brand, it’s Proton, not Fernandez.

  10. Prisoner Monkeys (@prisoner-monkeys) said on 27th September 2010, 14:18

    This is odd. I can’t think of a possible motivation for Group Lotus to do this. One could theoretically argue that they are disappointed with Lotus Racing’s performance this year, but Lotus have dominated the new teams and will easily coast to tenth place overall barring a race of attrition.

    I find it suspect because of their joint operations with ART Grand Prix. Lotus ART came without precedent, and with the first talk of legal action against Team Fernandes. I was reading this versy story on Autosport, and I found this odd quote:

    “We believe the Lotus brand to be one of the most valuable brands in Formula 1 today,” he [Proton's chairman whose name I can't pronounce] said. “We are the owners of this brand, and will take all necessary steps to protect it.”

    If Group Lotus believe the name is so valuable, why are they so eager to protect it? What does it need to be protected from?

    I’m beginning to suspect that Group Lotus have realised that the Lotus name is very valuable, and may be looking to put together a team of their own in 2011 (or, more likely, in 2012). After all, they have an alliance with ART, who had previously tried to enter for next year, but withdrew because they didn’t have the budget. I think we’ll find Group Lotus have seen Lotus Racing has created a niche in the market and want to fill it.

    • I agree with this post.

      It seems like Group Lotus were keen to have the Lotus name in F1, but they didn’t want to take on the risk, so they let Fernandes take the risk instead.

      If it failed, Group Lotus wouldn’t have lost anything (in fact, they would’ve still made money from licensing the name) and the loss to prestige would be lower because they could blame Fernandes.

      Now that the F1 team hasn’t collapsed in financial ruin, Group Lotus wants in, so they are applying pressure to Fernandes to gain leverage in negotiations.

      Whether or not David Hunt has the rights to the name isn’t going to matter. Group Lotus is trying to corner Fernandes in a corner by leaving him few options (1. Use a non-Lotus name; 2. Face a lengthy legal battle; 3. Let Group Lotus take a stake in the team). Options 1 and 2 could potentially be costly for Fernandes, so Group Lotus wants him to be pragmatic and give them a slice.

      Quite evil.

      Mind you, this is all mere speculation on my part.

      • Prisoner Monkeys (@prisoner-monkeys) said on 27th September 2010, 15:15

        I doubt Group Lotus would want to buy a stake in the team. Especially if they want the name for their own. The key here is the Malaysian government, who own a stake in both Group Lotus and Lotus Racing. Whoever they support in this will win the battle. The problem is that the government in Kuala Lumpur has invested far too much in both ventures; Lotus Cars because it is a marque owned by Proton, diversifying their share in the car market, and Lotus Racing because it was partially created as a platform for promoting the country through the 1Malaysia marketing campaign. Both are heavily subsidised by the government – but I’m willing to bet the government will back Lotus Cars, simply because they’re bigger and more important to the Malaysian economy. The only way Fernandes can fight that is in a court; even if Kuala Lumpup back Group Lotus, a legal judgement declaring them to have ownership of the Lotus name is the only thing that will trump Kuala Lumpur’s support for Lotus Cars.

        Unfortunately, it’s very likely that if Lotus Car wins, Lotus Racing will die. The government would be forced to pull out of Lotus Racing, especially if Lotus ART want in. I don’t know if Tony Fernandes would be able to support the team all on his own; he might be known for turning Air Asia around, but very few airliners around the world regularly post a significant profit. It would be a shame if Lotus Cars’ attempt to take control of the Lotus name would destroy Lotus Racing, because they’ve clearly been the standout performers of the back half of the grid this season, and I think Tony Fernandes is exactly the kind of person Formula 1 needs.

        • Richard M said on 27th September 2010, 16:35

          “– but I’m willing to bet the government will back Lotus Cars, simply because they’re bigger and more important to the Malaysian economy”

          I was under the impression that Lotus Cars are loss making at the moment, but Lotus Engineering is profitable. In any case I expect Air Asia and 1 Malaysia (Tourism)contributes more to the local economy than Group Lotus.

          • Prisoner Monkeys (@prisoner-monkeys) said on 27th September 2010, 23:09

            But Group Lotus comes under the banner of Proton, who do contribute a lot since they’re pretty much Malaysia’s national car manufacturer.

        • I do think Fernandez has some very good political connections as well.
          It seems him turning Air Asia into the succes it is now has given him a lot of goodwill.

          And from the interview gpcambell refers to i got the impression that there is some discontent with the Ferrari guys installed at Lotus Cars in senior level Government as well (for going into racing when the car company is far from stable). A lot of politics going on.

  11. Tony joked about “Fernandes Racing” the other day.

  12. Keith Collantine (@keithcollantine) said on 27th September 2010, 14:28

    It’s all rather odd and tiresome. If Group Lotus were really so bothered about having the Lotus name in F1 against their wishes, shouldn’t this all have happened 12 months ago?

    • codesurge said on 27th September 2010, 14:42

      My suspicion is that Group Lotus didn’t realize the significance (and monetary worth) of the Lotus name in F1 back when they allowed Fernandes to dub the 1Malaysia team Lotus Racing. Now that they’ve seen the commercial value of having a Lotus team in F1, they want in on the act and aren’t willing to “share” it with Fernandes.

    • Prisoner Monkeys (@prisoner-monkeys) said on 27th September 2010, 14:53

      It should have – and that’s what I was talking about with the complete lack of apparent motive for doing it. All I can conclude is that they have seen the Lotus name still carries weight in the sport and they want to use it themselves.

      • US_Peter (@us_peter) said on 27th September 2010, 19:56

        I think that’s exactly what’s happened. They’ve seen the goodwill that Fernandes has received in F1 and want to jump on the bandwagon.

        If by some fluke they do legally acquire the rights to the Team Lotus name and gain an entry with ART either by selection or by purchasing HRT or Torro Rosso, I seriously doubt they would be received with the same goodwill that Fernandes has been.

  13. Icthyes (@icthyes) said on 27th September 2010, 14:33

    What a stupid mess. I never really considered Lotus Racing as “proper” Lotus but they won me over with time. Now Proton want to stop them from using any Lotus name at all. And if they had no right in the first place, why squawk about this all now? It’s easy to see through their rhetoric that this is some kind of pride-commerce issue; Lotus has come back and now Proton want that money for themselves.

    • US_Peter (@us_peter) said on 27th September 2010, 19:58

      I think what it amounts to is that Fernandes paid Group Lotus a license fee to use the name “Lotus Racing.” As soon as he secured the rights to the “Team Lotus” name, he would no longer be paying them a license fee, but instead pay Hunt. They realized that they’d be out of the loop and are now getting greedy about having a piece of the pie.

  14. Dany Bahar and ex-Ferrari guys arrived after Fernandes did his licensing deal – and sources say that on arrival, Bahar already wanted to scupper it.

  15. I’m confused, when Lotus Racing/1 Malaysia Racing Team was founded in 2009, I thought it had the same ownership as Group Lotus and Proton and they were all linked to the Malaysian Government.

    I thought Tony Fernandes was only brought in originally as a team principle for the F1 team not that he was the owner of the F1 team.

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