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Fernandes: Team Lotus don’t need to change the chassis name
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Fernandes: Team Lotus don’t need to change the chassis name
Posted By: James Allen  |  30 May 2011   |  12:59 pm GMT  |  37 comments

Tony Fernandes says that following the judgement delivered last Friday on the Lotus vs Team Lotus row, he has no need to change his chassis name, as his rivals claim.


The judge in the High Court ruled that Team Lotus, owned by Fernandes’ consortium, had the right to race in F1, and that their rights came with the logo and the goodwill. However he also ruled that they are not to use the name “Lotus” on its own.

Rivals from the Group Lotus-sponsored Renault team, claim that this means Fernandes will not be able to continue to use Lotus as his chassis name in the official entry list. But speaking to me from Bali by phone yesterday Fernandes said that this was part of the goodwill of the team,

“We own the goodwill of Team Lotus and the team has always raced with the chassis name Lotus, ” he said. “We don’t have to change it.”

This is an important point because Concorde Agreement rules state that a team’s chassis name is the most important identifier (team names change with sponsors and so on) but if a team wishes to change its chassis name it needs support from the F1 commission, which is made up of all the teams, plus some sponsors, promoters, FOM and FIA. If it doesn’t have that support, it can still change the name but it must forfeit its prize money for the season.

Team Lotus would be likely not to have the support of Virgin and HRT as they would stand to benefit from the forfeited money. And of course Renault wouldn’t go out of their way to help either.

But another team principal indicated to me that if everyone else on the F1 commission voted with Fernandes, he would probably have enough votes to make the change.

Time will tell if it comes to that.

Group Lotus have said that they will appeal the judge’s ruling, so things stay as they are for the moment. Fernandes doesn’t believe however that there is the stomach for an appeal in Malaysian government circles.
“For an appeal to succeed they need something fundamental to change, ” he said. “The judgement is clear. I don’t know if Proton (Group Lotus’ owners) has the stomach to go on. I’m not concerned anyway.”

Fernandes’ original plan was to race under a licence from Group Lotus, establish the Lotus brand in F1 and then reverse take-over the car company. The arrival at Group Lotus of Dany Bahar stopped that plan in its tracks.

Bahar terminated the licence, citing a breach of its terms in relation to some merchandising that Fernandes’ team had produced – “We were sloppy on that,” admits Fernandes.

This termination was ruled valid by the judge in his verdict on Friday, as was Lotus Renault’s right to race in black and gold livery (Fernandes claimed that this was part of Team Lotus’ goodwill)

There will be some damages to pay there by Fernandes’ side.

Faced with his licence being terminated, Fernandes had to activate plan B last September, which was to acquire the rights to Team Lotus, which David Hunt had owned for some time. However this move lost Fernandes the support of the Champman family, who sided with Bahar at this point, saying that Fernandes had promised them he would not revive Team Lotus. This was also a clause in the licence agreement.

Fernandes says now that Group Lotus’ mistake was in not buying up the Team Lotus rights from Hunt when they had the chance. “If they’d done that we’d have been toast,” he said.

I asked Bahar several months ago why he hadn’t done this and he said it was because they believed that the Team Lotus rights didn’t have any value to them.

Although many observers feel that Fernandes does not yet have a clear mandate to press on, while an appeal is pending, he considers the judgement to be clear and now plans to push the marketing button on the Caterham side. The team is likely to become Team Lotus Caterham shortly.

“This is the final piece of our strategy jigsaw now. We have the Team Lotus name, we have the F1 team, we have goodwill, we have the roundel and we have the jewel in Caterham, ” he said.

“This decision gives us the strategy to move forward, which we are very, very happy about. We will use the F1 team to provide the car company with exposure, and we are looking at bringing out a couple more brands.

“I’m philosophical about it; the irony is that if we hadn’t had this case I would never have bought Caterham.”

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37 Comments
  1. Sam Laird says:

    From my reading of the Decision, Mr Justice Smith did not concern himself with chassis names at all. He says (para 36) that “There has never been a car racing in F1 under the name Group Lotus or just Lotus”. This must mean that he is talking about team names and trade marks only, as Team Lotus chassis were of course called Lotus. Sounds like Tony is right.

    1. DMyers says:

      I agree. Joe Saward and Autosport.com reported that the judgement confirmed Team Lotus’s right to call the car a Lotus.

  2. PaulL says:

    “This is the final piece of our strategy jigsaw now. We have the Team Lotus name, we have the F1 team, we have goodwill, we have the roundel and we have the jewel in Caterham, ”
    “We will use the F1 team to provide the car company with exposure, and we are looking at bringing out a couple more brands.”

    Evidently, there isn’t a part of the Fernandez described picture that includes results and pure sporting ambition. He’s come into F1 with a modest pedigree in lower formulae, put on the Team Lotus badge and milked it until the corporate teet dropped off, all for the purposes of gearing towards the marketing of a car company.
    It is the antithesis of the bona fide Team Lotus and Chapman heritage. A true fan of Team Lotus will repudiate these [mod].

    1. tennis says:

      What ‘modest pedigree in lower formulae’ would that be? Fernandes link to F1 comes via a long running sponsorship between Air Asia and Williams.

      Many would argue that Group Lotus’s sponsorship of a Renault car is actually the antithesis of Lotus F1 history…

  3. Rohan says:

    Fernandes is correct in that the judgement is clear. However, it’s clear that the judgement is against him and Team Lotus. How he can continue to claim that Team Lotus “won” the case is baffling when veryone else can see that it was Group Lotus that won.

    1. Sam Laird says:

      The action was brought by Group Lotus (the “Claimant”) to stop Team Lotus (the “Defendant”) racing under the name Lotus or Team Lotus. The claim failed. Would Group Lotus be talking about an appeal if they had won?

      1. T128 says:

        Group Lotus didn’t win the case. They immediately appealed the decision, something a winner would never need or want to do.

        Group Lotus’ ultimate aim was to stop Fernandes’ team racing under the Team Lotus name. They lost. The licence issue was the only thing they actually won, which of course was nothing near the main issue of the case.

    2. David Hodge says:

      So if Group Lotus won, what are they appealing? First time I think I have ever heard of a winning claimant launching an appeal.

      1. James Allen says:

        Read the full judgement – it’s very interesting. Link above in one of the reply posts

    3. Dave Myers says:

      It’s unusual for a winning party in a court case to appeal the result (which is what Group are doing). Given the judgement upholds Team Lotus’s right to use their name, they have won their part of the case.

  4. Dave says:

    Hi James. Do you know the detail of Fernandez’ merchandising error which breached the licence agreement please? Be interesting to know. Thanks

    1. AnDrOiD says:

      I don’t know much, but some time last year, if you travel from Kuala Lumpur to the airport, you will see a big billboard that advertised an energy drink called LR8, Lotus Racing drink. Which I think they are not licensed to do.

      http://thestar.com.my/sports/story.asp?file=/2010/4/2/sports/5979428&sec=sports

      1. Dave says:

        Thanks for that. Much appreciated

      2. wolf says:

        Yeah that just seems greedy and stupid. I expect to see Team Lotus Caterham soon, sporting green and yellow merchandise of all kinds under the Caterham name in the Team Lotus colours.

    2. toleman fan says:

      Look at the original ruling here:

      http://www.bailii.org/ew/cases/EWHC/Ch/2011/1366.html

      and look at paragraphs 298 – 313.

      Here are some quotes:

      “it is clear that…Mr Fernandes decided not to comply with the obligations under the License Agreement and decided to ‘wing it’ …

      … This non compliance is shown by the refusal to provide a copy of the License Agreement without explanation to Mr Choy. He at that time was employed by 1MRT from January 2010 to set up the marketing division of which he was the director…

      …When he [Mr. Choy] finally saw the Agreement in June 2010 he sent an email to Nik Faruk on 18th June 2010 stating:- ‘We have breached every clause in this Agreement there is to be breached’. In that he is correct…

      … Ultimately Mr Fernandes’ attitude is summarised in his email of 4th August 2010 that he sent to Ms Bauer (GL’s Director of Merchandise):- ‘Stop treating us as lepers and stop harassing my staff. We have been so supportive of Group Lotus but quite the opposite from you guys. We will continue with this bag which is similar to the Classic but with a different logo. If you are unhappy sue us’. Well they did…

      …It is quite clear on the emails that 1MRT knowingly breached all the obligations as regards the merchandising from the start. It made no attempt to comply and then when it was challenged it adopted this belligerent attitude as exemplified by Mr Fernandes’ email …

      … I felt considerable sympathy for Mr Choy who was in effect put up to defend the indefensible and over a sustained period of cross examination was comprehensively destroyed by Mr Silverleaf QC. He was in effect left by the Defendants [TL] to hang out to dry.”

      Reading this, you may consider Mr. Fernandes’ description of this behaviour as “sloppy” to be somewhat casual. But, respect where it’s due, there was nothing sloppy about his response to GL when they complained about it.

  5. Gus82 says:

    As someone who supported Lotus/Team Lotus the first time round and is a fan of the car manufacturer of the same name, I’m just really fed up now. I think the lawyers on both sides have really messed up in not obtaining explicit clarification of the chassis naming issue, as frankly this is the most important point in deciding who is the proper ‘Lotus’ team in F1.

    I am a big fan of the Team Lotus team and how they go racing, but have concerns about their plans for the future diverging from the Lotus brand that I became a fan of, Group Lotus have plans for an exciting new Esprit, race in F1 in the very cool black and gold liveries and also race under a UK racing licence, however some of their new product looks very ambitious and not necessarily as true to Lotus as I would like and again I have concerns about their future direction.

    At this point I just hope the future direction of the teams and the manufacturer can be resolved soon, before the little brand equity that is left is completely destroyed.

  6. Sergio says:

    This new and the other: I break my pencil, are the hottest right now on the paddock. Sometimes a silence is more eloquent than 1000 words.

  7. Michael Prestia says:

    Call them whatever you like… this is not the same team nor do they have the same or close to the same results… will forever be a backmarker!

  8. Alexx says:

    The greed Tony F has is only going blossom!

    Green & Yellow are suitable colors!

  9. Ben G says:

    Weird.

    So Tony will now continue advertising his enemies for free, while trying to make something of his ‘Plan C’ brand few have ever heard of.

    According to the ruling, he can’t call his Caterhams ‘Lotus’ in any way outside F1.

    I don’t see why he doesn’t accept that his attempt to buy Lotus on the cheap failed, and move on.

    1. tennis says:

      Yes that obscure brand Caterham…

  10. MattB says:

    Other than proving a point and being belligerent (for which I don’t blame TF in the slightest!) I can’t see much point in him continuing with the Team Lotus name. Team Caterham F1 would be awesome.

    If the world was sensible and grown up GrpLot would buy TmLot and ensure TF’s team could change to a Caterham branded name without financial loss. One wonders if that will be cheaper than the eventual cost with more lawyers involved!

    1. Brace says:

      You can’t expect lawyers advising their clients to actually sit and talk like adults and make a sensible agreement. What’s in it for them? :)

    2. Els says:

      Honestly, I don’t know why they don’t do that as a compromise. Group buys the rights to Team, and forever unites the Lotus sibling brands.

      Tony can then absolutely focus on Caterham cars and Team Caterham F1. Spend attention on racing and not legalities, and truly build something in Caterham.

    3. T128 says:

      Don’t see any need for Fernandes to change his team name, especially now that he’s proved that he owns the name of his team.

      Group Lotus had well over a decade to try and buy the TL name. No doubt David Hunt would have been willing to sell to them, just as he later was to Tony Fernandes. They didn’t buy it, all they did was what they done this year, and that was to bring the issue to the courts. They failed this year and they failed then.

  11. Jo Torrent says:

    I don’t understand why was Renault allowed to use TeamLotus black & gold livery ? If they were allowed, can they use the green yellow as well ?

  12. clyde says:

    I dont think too many people care about his case and who won ….they are backmarkers and hes just milking the once great lotus name ….Remember Lotus last won a gp in 1987 in detroit with Senna 24 years ago

  13. Baron Von Awesome says:

    I’m fed up with hearing Fernandes waffle on. The guy took all he could and used the Lotus heritage for all he could. How can he win if he doesn’t own Lotus? Answer – He can’t. He lost. It’s pointless being Team Lotus in F1 if you are not Lotus. It’s quite frankly utterly ridiculous that he continues down this road. If I never heard about him or his backmarker team again it would be too soon. I’ve actually grown to feel sorry for Bahar that he has to put up with Fernandes, he’s like some jilted lover that decides to stalk their ex and just doesn’t give up.

  14. Chris says:

    Tony Fernandes would rather stake a claim to brand that he did not create, rather than create his own brand and invest in the development of his car. He is just throwing away money through these court fees and licensing rights. For what? To claim he is racing in “the spirit of Colin Chapman’s Team Lotus?” BS! All modern F1 teams and cars on grid have taken inspiration from ACBC, yet they dont pretend to be founded by him. What a tool that Fernandes is. Neither modern Lotus team is Team Lotus, there is only Renault (or Genii now) and 1MRT. But at least LRGP has traditional manufacturer sponsoring unlike 1MRT whose only claim is they bought rights from a guy who bought it from a guy who bought it from Colin which was also in dispute!

    I hope the Judge comes to his senses and Group Lotus successfully appeal.

  15. Rich C says:

    Speaking of GL, does anybody know who is building the engines they will label “Lotus” for Indycars?
    Their logo is right up there with Honda and Chevy on all the advertising.

  16. martin g says:

    Wasn’t the black and gold colours of lotus simply the sponsorship colours of John Player Special cigarettes back in the 70′s and 80′s?
    Does this mean that a sponsor companies colours on a racing car become part of it’s goodwill?

    1. James Allen says:

      No, the judge was quite clear on that point.

      1. tennis says:

        But what might happen if Group Lotus decide to run in green and yellow – as that’s not a sponsor colour and is as close as you could get to Team Lotus’s traditional colour scheme – could that be why they are running in black and gold in F1?

  17. Martin Collyer says:

    James, can you clarify please?

    “But another team principal indicated to me that if everyone else on the F1 commission voted with Fernandes, he would probably have enough votes to make the change”.

    Does this mean that Fernandez does not need 100% support from the F1 commission members to make a chassis name change and keep the money? If so, what percentage support from the F1 commission members does he need?

    1. James Allen says:

      The TP in question said he needs 18 votes from 21 people, but I’ve not had that confirmed

  18. trevikins says:

    Any real connection with the Lotus F1 racing team of the past no longer exists. That team expired a long time ago. The current situation is a fight over “branding” rights.

    I understand the commercial logic of reviving the Lotus name and admire and respect the efforts of Team Lotus to move their team forward. Especially given that they are starting from scratch. But they are not the Lotus team of old.

    Group Lotus also have sound commercial reasons for wanting to get involved in F1, but their chosen method – taking over the well established Renault Team – doesn’t inspire the same admiration. Although I’m very glad to see the Renault team able to stay in F1 – they are a team with a real racing heritage and would be sorely missed – so I respect Group Lotus for that.

    It would seem to me that the current situation is a winner for all concerned.

    Perhaps most important is the chance to secure the future of Caterham Cars – they, and the people that work there, are real winners in the current furore.

    Team Lotus doesn’t need to be renamed with resultant loss of revenue.

    Group Lotus gets the increased benefit of having the Lotus “Brand” attached to two teams that generate positive feelings amongst F1 fans – this works fine for Red Bull!!!

    Further litigation risks the protagonists being seen as ego driven and eroding the “Brand” values that Fans don’t really care about anyway.

    Just a thought!!

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