Formula One is a funny old business. Things from the past don’t necessarily stay in the past and nothing is certain. At the end of 2006, who would have thought that Michael Schumacher would ever comeback to F1? And who thought that Former Lotus driver Nigel Mansell would get his moustache back in the latest car insurance advertisement from Money Super Market?

The Lotus F1 team made a similar remarkable comeback this year under the ownership of Tony Fernandes who has made it his mission to take Lotus back to the top of the sport. To start with people didn’t think of the team as the same Lotus that had won 73 races and taken seven constructors championships in the past. However, the determination of Fernandes and Gascoyne’s squad, along with the support of the Chapman family started to change people’s minds, including that of the legendary commentator Murray Walker. For many people, Lotus was back and they were back to succeed. However, the news that Fernandez’s team would be re-named Team Lotus for 2011 and would no longer seek the support of the Proton (who owns the Lotus car company) changed all of that.

Fernandes’s case

Tony Fernandes bought the rights to the Team Lotus name from David Hunt earlier this year. Fernandes rightly believes that Team Lotus was a separate entity from the Lotus car company and therefore see’s no reason why he should need the support of the car company to use the Team Lotus name. This is based on the fact Team Lotus operated as a separate entity from the car company and that in its later years in the sport, didn’t receive any support from them, financial or otherwise. David Hunt bought the team prior to its shut down in 1994 (due to a lack of funding which had no impact on the Lotus car company), and therefore Fernandes believes that there is no reason why his team can’t operate in a similar fashion in 2011.

Proton’s case and potential aims

Proton now owns the Lotus car company, and rightly believes the Lotus trademark is something it owns. Proton were very happy to support Fernandes this year as he paid them for the right to use the Lotus name and Proton logos even appeared on the cars. Both parties were winners, as the Lotus brand name gave Fernandes a good start in the sport by providing him with a better chance to attract big sponsors and talented individuals already established in the sport than what other new teams had, while the Lotus brand benefited from some publicity. The trouble started because Fernandes claimed that his newly acquired Team Lotus brand is separate and therefore Proton’s co-operation was no longer required. This would mean that Proton would have no say in how its brand was presented to the world, which is obviously something that no company would find desirable. As was rightly pointed out in an earlier article on this topic on by John McGregor, at all other points in the past the Lotus team has operated with the co-operation of people owning the Lotus trademark, and that includes the 2010 season.

Lotus’s return to F1 this year also seems to have sparked Proton’s interest in high level motorsport. Proton offered support to the KV Racing Indycar team which ran Takuma Sato in Lotus colours this year and they have bought a stake in the ART GP2 team which will be re-named Lotus ART next season and will be competing against Tony Fernandes’s Air Asia team in the same category. Interestingly ART have previously made it well known that they have ambitions to enter F1 but have not had the financial support to be able to do so competitively. Proton is growing, with profits increasing by over 50% this year so far. With plans to increase profits to over £100 million per year in the next two years, it is possible that Proton could offer support to ART’s proposed F1 programme. It may well be that Proton’s concern over the Lotus name also stems from their interest in starting a Lotus F1 team of their own in the coming years with ART. It may be wild speculation, but there were rumours in the paddock at last weekends South Korean GP that Lotus ART were talking to Genii Capital (who own the Renault team) about becoming involved in the Renault F1 team in 2011 given speculation over the financial health of the outfit. This is the same company with whom Fernandes was negotiating an engine supply deal with for 2011. It could be the case that this was a business tacit to delay or prevent the Lotus Racing-Renault deal for 2011.

What is going to happen?

The Malaysian Prime Minister is believed to have taken a personal interest in this case, as it involves two of Malaysia’s biggest companies (Air Asia and Proton). It is therefore likely that the two will be forced to reconcile their differences and Fernandes recently hinted that much progress had been made.

However, it is difficult to see exactly what sort of arrangement the two will make. Proton’s plans to expand appear to be based on marketing the brand using motorsport activities such as F1, and therefore the company would have to be involved in the sport. However, buying a stake in ART suggests that the company has no desire to do so with Tony Fernandes’ F1 operation. A simple solution would be for Fernandes to relinquish some power in the team to ART-Proton, thus allowing ART to realise its F1 ambitions. However, this would not be the ideal solution for either ART or Fernandes who would both want complete control of their own team. There are therefore four possible scenarios’ that will play out:

  • Fernandes will be told be can’t use the Lotus name. Accepting defeat, he will team up with ART-Proton to run the team.
  • Fernandes will be told he can’t use the Lotus name, and the team will be re-branded Air Asia racing. Lotus could then enter F1 at some point in future by collaborating with ART.
  • Fernandes will be told he can use the Lotus name, and Proton will respond by entering F1 in collaboration with ART anyway. This would mean there would be a Team Lotus and a Lotus-ART team in F1.
  • Fernandes will be told he can use the Lotus name and Proton will simply have to accept it and decide to stay away from the sport with there own operation, benefitting from the increased publicity Fernandes team would bring.

It is impossible to call what is going to happen, and everything rests on the decision in court about the use of the Lotus name. However, one of the above four scenarios will happen. The good news for Lotus fans is that each scenario ends with there being a Lotus team, but surely this whole argument only goes to reinforce the fact that the old Team Lotus is gone and will never return. Therefore neither side has benefited from airing their dirty laundry in public as damage has already been caused to the Lotus brand in F1.

As a side note, the intellectual property office of the UK recognises Team Lotus ventures (now owned by Fernandes) as the owner of the legendary Green and Yellow Lotus livery used by the team this year. This is the same livery which Proton has used in its branding for the KV Racing Indycar team in 2010, which is possibly another trademark violation. However, that is probably a case for another court at another time once all this is over.

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