Team Lotus wins the right to use its name in Formula 1

Just over an hour ago the High-Court case between Team Lotus and Group Lotus reached its conclusion and as we expected Mr Justice Peter Smith made his verdict in favour of Tony Fernandes’ 1Malaysia Racing Team, who were judged to be the true owner of the ‘Team Lotus’ name and its iconic roundel.

However, if you were expecting this decision to diffuse the confusion of having two Lotus teams in Formula 1, then think again. Team Lotus are the only team entitled to use the Lotus name on their chassis, but Group Lotus are entitled to continue racing in F1 using the historic black and gold livery and use the Lotus marque on their road cars.

A spokesperson for Group Lotus, Sarah Price, Head of Legal, said shortly after the judgement, “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.” So it looks like there remain two interpretations of the truth… However the judge ruled that Group Lotus cannot enter F1 using the name ‘Lotus’ for a team, which it will now appeal against since it believes this causes confusion for spectators and customers.

No doubt Group Lotus will characterise this as a threat to the long-term viability its road car business and therefore try and use political leverage to stop Team Lotus from undermining this business on the world stage that is Formula One. But an appeal court judge might just say, they should have thought of that in the first place before terminating their relationship with Fernandes and 1Malaysia Racing in 2010…

Here’s the statement in full from Team Lotus…

Team Lotus is very happy that the court case concerning the rights to the Team Lotus name has today come to a positive conclusion and that the team can now focus its full attention on its long-term challenge for honours on and off track. The decision confirms that Team Lotus is the true owner of the full Team Lotus name and the iconic roundel, establishing in law that the Anglo-Malaysian team is the rightful heir to Team Lotus and all associated goodwill.

Team Principal Tony Fernandes gave his comments on behalf of his fellow shareholders Kamarudin Meranun, SM Nasarudin and the 250 strong workforce based in Malaysia and Hingham, UK:

“We are all pleased that it has been clarified that we are the rightful owners of Team Lotus. We have always been confident that the factual evidence we presented would lead to this decision and today’s judgment confirms that belief. We are of course disappointed about the decision that Group Lotus was entitled to end the our licence agreement in 2010.

We entered into that contract on the basis that we were beginning a long-term partnership with Group Lotus but unfortunately they then used technical breaches of the merchandising pre-notification process to bring the licence and our partnership to an end. However, my fellow shareholders and I are firm believers that when one door closes another door opens. In the early days of our agreement we realised its termination was inevitable and as events have unfolded the end of the licence has proved positive for us, with many new avenues being opened up as a result.

“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.”

…and this is what Group Lotus had to say

Group Lotus Wins On Key Issues In Formula 1 Naming Dispute

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.”