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Both sides claim victory in Force India vs Caterham IP case
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Darren Heath
Posted By: James Allen  |  22 Mar 2012   |  10:27 am GMT  |  45 comments

A judgement has come out in the Force India legal case against Caterham over alleged intellectual property theft – and both sides are claiming a win.

Force India issued a statement this morning saying that the judge had found “Team Lotus (now known as Caterham) and Aerolab liable for copyright infringement and using confidential information respectively. Some parts created using Force India confidential information were used on the Team Lotus race cars in the early part of the 2010 season.” Force India has referred the judgement to the FIA, who fined McLaren $100 million for taking Ferrari Intellectual Property in 2007.

The case relates to the development of the 2010 Team Lotus car (the previous name of Caterham team) and work carried out by wind tunnel company Aerolab, which had previously worked with Force India. It started when Aerolab sued Force India for unpaid bills and Force India countersued for “misuse of confidential information relating to the design of a wind tunnel model as well as claims for infringement of copyright.”

This related to CAD designs for a wind tunnel model. Force India was seeking £15 million in damages, reduced to £13 million during the trial, but has ended up with substantially less than this; €25,000. Aerolab accepted that some of their employees had copied some of the Force India designs and offered to settle the case before it came to court with a payment of €250,000, but Force India declined the offer.

The judge ordered Force India to pay Aerolab €846,230 in respect of the claim for unpaid bills.

Force India believed that Team Lotus/Caterham engineers had copied files on a large scale, but the court found only that some copied files were in a large batch of their own files given to them by Aerolab engineers.

Honourable Mr Justice Arnold decided that Aerolab had misused certain of Force India’s confidential information as a means of taking a ‘short cut’ to produce a wind tunnel model which could begin to be used for testing as soon as possible. He was also satisfied that a “small number” of components had ended up on the first Lotus/Caterham F1 car in 2010.

He said that Force India had come “nowhere near” establishing systematic copying of files and found Lotus/Caterham and its technical director Mike Gascoyne were not liable.

Aerolab, accepting that some of their CAD engineers had done the wrong thing, had indemnified Lotus/Caterham and Gascoyne in any case.

There is clearly considerable animosity between Gascoyne and Force India boss Vijay Mallya. Gascoyne sued the team for wrongful dismissal over his sacking as technical director and this case is the latest in the series of spats. Gascoyne was delighted with the judge’s ruling,

“Just to put the record straight I was totally cleared of any wrongdoing and all the claims made against me by Force India were dismissed,” he said on Twitter.

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45 Comments
  1. mattnz says:

    A bit hard to claim ownership of something you never paid for in he first place

    1. Kevin Green says:

      How do you mean? they both paid for it and at the same time both should not be using the name its a farce! there’s still a Lotus car company manufacturing cars but at the same time they are not involved in any way other than selling/leasing the F1 team naming rights!

      1. Euan Tyalor says:

        @Kevin I think you’ve been reading the wrong story.

      2. build says:

        EXCEPT !
        Mallya (Force India) still has not paid any money for work done by Aerolab.

      3. MattNZ says:

        @ kevin. Apologies, I may have been overly cryptic in my original message.
        @ build and euan. Thank you for explaining my meaning

  2. vvipkho says:

    Hopefully this case settle faster soon ..
    so every1 can focus in race..

  3. ian says:

    Whoever pays out most is the loser.
    We will know soon – I would not put much money on Force India coming out of it well.

  4. Paul H says:

    Seems like a very personal vendetta like you alude to at the end of the article. Mallya appears to have a number of financial issues and this hardly seems like a well thought out action. I’m going back a way but if my memory serves me correctly, didn’t Aerolab admit practically right away that some of FI data was mixed in with TL information as a result of the fast turnaround. At the same time wasn’t it stated that it was purely Aerolab people involved and that the actual amount of data was extrememly small and only of use if used in conjunction with the whole package?

    They say that parts found there way onto the TL car, is there any information as to what parts? Although the principle of IP theft remains the same, there is significant moral difference if, for extreme example, a diffuser design is used and if a mounting point bracket for the FOM camera mount is made use of. Reason I ask is that as team personnel move between teams, some IP will always transfer in such transitions whether intended or not. The extent is the key factor in determining the liability.

    How did TL respond at the time as I don’t recall anything other than denials of wrongdoing? Surely FIA should have sent in representatives to analyse data at the time to ensure no foul play and make a stand. That could set precedent though – daresay Torro Rosso would not want their parts bin comparing too closely to RBR’s. I find this whole thing raises a lot more questions rather than being the end of the story.

  5. matthew cheshire says:

    Isn’t there also some tensions between Mallya and Fernandes with their starkly differing fortunes in the Airline industry? Surely both have some competing goals to be the one to bring F1 success to Asia.

    If the animosity was just between Gascoyne and Mallya, would Fernandes not have just put and end to the issue before now?

  6. Dan Mawby says:

    Yes, Force India are clearly winners. They’ve been awarded 25,000 euros, but been ordered to pay the €846,230 and have to pay both sides legal costs for not accepting the earlier higher settlement offer.

    1. Pat M says:

      I am sure Force India do consider it a victory – they are awarded 25,000 euros and ordered to pay 846,000 euros…..but since they have a history of not paying their bills anyway, to Mallay it is just an extra 25,000 :)

      1. MattNZ says:

        Lol brilliant. Pat your humour is so on my wave length

  7. Ray says:

    No verdict over Caterham themselves, and coming out of it very much the financial loser. Not sure how Force India can claim a win there.

    Aerolab got back only money owed to them, faced a small fine, and admitted limited liability. Not exactly a win there, either.

    Caterham by all appearances seem to have been caught up in the middle, inadvertantly given a tiny amount of infringing info that they were found not guilty for. Won nothing, and were charged nothing.

    As the saying goes, the only winners were the lawyers.

    1. RickeeBoy says:

      We do not know that Caterham did not pay a huge amount of money to Aerolab for Models / mounting points etc etc ( and I’m sure Caterham would have had to pay – therefore Aerolab have charged for Force India’s I.P. so it’s still cloudy. I’m sure Tony F. lowered his invoice though.

    2. Dan Mawby says:

      I think Aero lab can claim a win. They offered to settle for 1/4 of a million and would have picked up both sides costs at that point.

      To only have to pay 25,000 and no costs (not even their own) is surely a win in anybody’s book.

    3. Gabriel says:

      Spot on re the lawyers, sadly. Always a true statement.

  8. Richie Hezz says:

    Hi James,
    Was it ever made clear just how much IP of Ferrari’s McLaren used/had access to? And if so, might the FIA be obligated through precedent to punish Caterham?

    1. forzaminardi says:

      The McLaren precedent didn’t apply to Renault who got a slap on the wrist for pinching another team’s I.P. after the McLaren case. The fact of the matter is that McLaren were heavily punished not because the evidence was strong or because they were shown to have used Ferarri’s I.P. in a systematic way but simply because Max was and is jealous of Ron Dennis.

    2. ian says:

      Well they didn’t punish Renault for having McLaren computer disks.

    3. AndyFov says:

      My memory’s blurry, but I seem to recall that precedent get ignored when Renault were found with a competitor’s data on their server.

    4. David Ryan says:

      Mike Coughlan was reputed to be in possession of some 780 pages of Ferrari documentation, which depending upon what that equates to could cover anything from the workings of the suspension (for example) to the entire car. It would certainly suggest a considerable amount of IP changed hands in any event. In terms of precedent, Renault were also found guilty of possessing (somewhat ironically) McLaren’s design data for its 2006 and 2007 cars; however, they were not punished to the same extent. Insofar as how the FIA responds in this case, I would imagine it depends on how significant they judge the designs for a vortex generator, rear brake duct and mirror to be. For my part, I doubt a repeat of 2007 is on the cards.

    5. hero_was_senna says:

      Mclaren had a full 780 page dossier, which Mike Coughlan’s wife was photocopying in a Prontaprint.
      How much they used I would imagine was difficult to quantify, although I remember details which the test and race team used regarding what gas Ferrari used inside the tyres for optimum performance.
      Other features, which the FIA insisted Mclaren take off their 2008 design, were the brake cooling systems etc because the brakes temperature impacted tyre performance significantly.
      Pat Symonds, in an interview during 2007, spoke in veiled terms about only one team that had run Michelins the season before, had designed a car which worked on Bridgestones immediately, something no-one else properly got a handle on till 2008.

      Beyond these 2 issues, I don’t know how much Mclaren copied Ferrari, but $100,000,000 fine which was paid and not contested, would seem to suggest some admission of guilt.
      I also believe Max Mosley absolutely lorded over the fact that he was “screwing” over Ron Dennis. It always felt as if the punishment outweighed the crime…

      Off subject James, would Ferrari ever consider Briatore or Pat Symonds to run the team? Recent media speculation has Horner apparently being offered a role as team director there.
      I just know Briatore has been successful with F1 whenever he ran the Benetton/ Renault teams, and Alonso was always close to Symonds.

  9. Rob Eke says:

    James, what do you think the FIA’s take on this will be? The judge only found that the designs of the vortex generator, an element of the rear brake duct and the rear-view mirror were infringements of copyright.
    I appreciate that the FIA’s approach to the use of information may be different to the Court’s, but do you have an idea of how significant would they consider the information used in handing out a penalty (if any)?

    1. Adam says:

      The McLaren verdict by the FIA meant that court action was nearly impossible for Ferrari and they promptly settled out of court. Even in Italy the size of the fine imposed by the FIA could have made a verdict almost impossible to result in any action in Italy, especially under appeal. A long protracted battle in the EU could have resulted in the FIA being slapped down for egregious punishment and being unable to regulate the sport going forward. McLaren backed off from fighting this because they did not wont there name muddied anymore.

      It is a near universal law for double jeopardy. I am sure the smart lawyers at the FIA will look at this and say that is a reason not to touch this or get anywhere close.

      Because for a relatively trivial matter an appeal in the EU could find the FIA’s ability to regulate is not as strong as they think. IE a national court says a second punishment or even hearing is double jeopardy and leaves open a question of the legitimacy with which the FIA can impose punishment beyond reasonable limits on members.

      The second and most obvious out for the FIA is that the court looked at it and found Caterham and staff had done nothing wrong. Expect nothing to happen! Case is closed.

    2. CoolGav says:

      Perhaps the FIA will dock all of the points that TL scored in 2010!

    3. KGBVD says:

      Team Lotus should be stripped of all of their points from the 2010 season!

    4. James Alpen says:

      It impossible to say.

  10. Alex says:

    Intersting they chose to cite the Ferrari/McLaren case; wonder what Force India’s view on the Renault/McLaren case is…

  11. Andys says:

    So Force India didn’t pay Aerolab for there design work.
    Two days later Caterham start working with Aerolab.

    Aerolab can’t unlearn what they learned designing Force India car, So Caterham in my eyes haven’t done anything wrong, they paid for a design from Aerolab which so happens to have some parts similar to Force India design that the didn’t pay for or have I missed something?

  12. Andys says:

    So Force India didn’t pay Aerolab for there design work.
    Two days later Caterham start working with Aerolab.

    Aerolab can’t unlearn what they learned designing Force India car, So Caterham in my eyes haven’t done anything wrong, they paid for a design from Aerolab which so happens to have some parts similar to Force India design that the didn’t pay for in the first place or have I missed something?

  13. Nick says:

    Not the first time Mallya’s F1 team has been involved in a legal dispute that has got to trial. You might remember his attempt to sue Etihad some years back after they pulled their sponsorship when Mallya repudiated the agreement (just after he took over Spyker). Now this. He’s either getting some bad advice or doesn’t mind lining his lawyer’s pockets.

    1. MattNZ says:

      Maybe his lawyers pockets are not getting lined as quickly as you think. Their cheq could be in the same mail as Aerolab ;)

  14. Rich C says:

    The winners walk out laughing;
    The losers cry “deal again!”

    So I guess that would make FI the loser.

  15. Hmmm…there is a pattern here. Every time Force India ends up in court over a contractual or money matter, they lose badly financially. They are going to be out of pocket over a million once all of the court costs are added to their bill. They need to stop picking fights they cannot win.

  16. Gras Albert says:

    This is what happens when a rich man’s ego overtakes his common sense…

    Forced to pay Aerolab’s unpaid bill (€850,000) and his own plus Aerolab’s and Gascoyne/1Malaysia’s legal costs (estimated €5,000,000)

    Just who are we supposed to laugh at

  17. Stephen Hughes says:

    I guess this is a very tricky area when you use third parties to design parts of a car. You can’t expect an engineer to ‘unlearn’ something they have designed and developed. The whole motivation of being an engineer is to design the best item you can. If you work for one team and come up with one design then move to another team you are bound to refine the design you already have. The only way I suppose it could be controlled would be for a team to buy the services of a supplier beyond the point they stopped working with them so that any experience they had becomes out of date before someone else can benefit from it.

  18. Charlie says:

    I wonder what the real issue is here..?

    On the face of it designers at Aerolab took shortcuts or mixed up a few files, nothing significant, and it’s not as if TL were going to be any kind of threat on-track…
    …Aerolab held their hands up to ‘their mistake’ and were prepared to take their lumps…
    …how does any of this either adversely reflect on TL or indeed justify FI not paying their bills?

    If something doesn’t make sense then it’s time to ask ‘Where’s the money?’

  19. Steve Zodiac says:

    This was clearly( oops! sorry I mean’t apparently) a badly conceived vendetta on the part of Force India. They seem to have got themselves into a big hole and it’s probably time they stopped digging.
    Just how do people with such poor judgement become billionaires?

  20. Darren says:

    Mally is à cool

  21. db4tim says:

    This will end VJ’s roll in F1

  22. Dunky says:

    Good job Ron Dennis doesn’t own the team or we could be looking at a $50m fine at least.

  23. Adrian Newey Jnr says:

    The only winners will be the lawyers!

  24. Grant says:

    Does sound like a personal vendetta on the part of Mallya as I’m guessing he ignored the lawyers advise to settle before hand and it has now cost him dearly. There is obviously more to this case in terms of the legal arguments presented that can’t be summed up in a brief posting, but one thing certainty comes to mind would be the argument of IP ownership and when is the transfer of this ownership and associated CAD designs completed, given that there was outstanding payment for Aerolab. The case for Ferrari is certainty different as it had existing IP information already paid for and owned by the team that Mclaren were coping. Can Force India really claim any wrong doing to the FIA if they had in fact not paid for the services completed by Aerolab ?

  25. Andys says:

    Still at least something good came from all this……. Aerolab got paid :)

    1. Rich C says:

      I believe the Court *ordered them to pay.
      That’s ever so slightly different from *getting paid.

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