Showing posts with label Motor Racing. Show all posts
Showing posts with label Motor Racing. Show all posts

Thursday, 6 August 2015

History lesson: Design protection in motor racing

An assignment I am busy with at the moment has reminded me of the 1978 case, Nichols Advanced Vehicle Systems, Inc. v Rees, Oliver and others [1979] RPC 127 (Chancery Division, Templeman J as he then was), on appeal [1985] RPC 445. (As the dates indicate, the appeal concerned various delays that had taken place in the proceedings.) It could alternatively be called Shadow v Arrows. Several disgruntled employees, and their financial backer Franco Ambrosio, left Shadow (whose debut in Formula 1 I remember, though I can't put a precise date on it from memory - in the early seventies - 1973, it turns out) and set up their own team, making up the name from the initials of their surnames, including that of their financial backer (Ambrosio, ReesOliver, Wass and Southgate completing the set. Alan Rees had been one of the founders of March a decade earlier, and that company also formed its name from the initials of its founders, the "M" being Max Mosley, but no intellectual property point arises from that coincidence). Unfortunately, they made up the design of their first car, the FA1, from the design of the Arrows DN9, and intellectual property points did arise from that.

I was delighted to see (not having appreciated it before) that the trial judge was Templeman J. A few years later, "Syd Vicious" was one of the Lords of Appeal who dealt BL a major blow in their litigation with Armstrong Patents Ltd - knocking a huge hole in copyright protection for designs, and paving the way for the New Deal in the Copyright, Designs and Patents Act 1988, the introduction of design right (now necessarily referred to as UK unregistered design right) and the near-exclusion of copyright from the designs field. But the reasons that drove the BL judgment, about spare parts, were not relevant to the Shadow case: there was no issue about the spare parts market.

The DN9 had been designed by Tony Southgate, who had been BRM's designer in their golden period between 1970 and 1972. The BRM P160, designed by him, held the distinction for 30 years of winning the fastest Grand Prix ever (Italy, 1971, driven by Peter Gethin, still the closest-ever finish) and exactly the same car (chassis no 1) also won the following year's Monaco Grand Prix, driven by Jean-Pierre Beltoise, who died last January. That remains, I think, the third-slowest grand prix since the advent of the World Championship in 1950, save for recent rain-delayed races where waiting for the rain to stop destroys the average speed. In 1972 the rain didn't delay the start, only the finish ...

When Mr Southgate designed the Arrows FA1, he reproduced the drawings he had made for the DN9 and the judge held (in what must have been a fairly easy case to decide) that the differences between the designs were insufficient to provide a defence. The defendants argued that they were innocent infringers, and should not be liable to damages, but the judge observed that to sustain this argument they had to believe that they were not infringing, and in fact they only hoped that they weren't. Actually, because of the flagrancy of the infringement, he awarded additional damages, as well as an inquiry as to damages and an injunction which effectively obliged Arrows to produce a new car. Fortunately for them, they had foreseen the outcome of the case and designed and built a complete new car in 53 days, launching it only three days after the judgment, so didn't even miss a race. I suppose that back in the bad old days of Cosworth-Hewland kitcars that was possible, but still impressive.

Several years later, the inquiry as to damages having proceeded at a very leisurely pace (partly, no doubt, because Shadow had folded in the meantime), the matter came to the Court of Appeal: but that's another story, and not one that involves intellectual property.

Tuesday, 31 May 2011

Which is the true successor to Lotus?

The delightful Mr Justice Peter Smith - one of the very few High Court judges with whom I have had more than a passing encounter, chatting to him over a glass of wine at a reception a few years ago and successfully avoiding any mention of Da Vinci, Jackie Fisher, or other topics that might have proved contentious - has now decided grand prix motor racing's biggest dispute: Group Lotus Plc and another v 1Malaysia Racing Team SDN BHD and others [2011] EWHC 1366 (Ch). It was always going to be a bit of a disaster, having two teams using the name, but at least it was one of what is still referred to as the new teams against one of the second-tier teams, the group following in the tyre tracks of Red Bull, McLaren and Ferrari. There's a precedent, of sorts, in the form of Red Bull and Toro Rosso, another pair of teams that only occupy the same piece of track when the one is lapping the other, but Lotus and Lotus - even if, strictly speaking, it's Lotus Renault GP and Team Lotus. The issue is compounded by Team Lotus using Renault engines, and it's customary to include the engine-maker in the full name of the car - or at least it used to be, not necessarily as far back as Brabham-Repco, Eagle-Westlake, Cooper-Maserati and the like. Even Lotus-BRM, using the fantastically mad, incredibly complicated and phenomenally unreliable H16 engine.


In the mid-eighties Lotus used Renault engines, so there is some historical precedent for that connection - although none of the named parties seems to have much to do with the holders of the name back then. Team Lotus and Lotus Engineering were split as long ago as 1954, so there have been two entities using the Lotus name for a good while, and the relationship between them has been complicated to say the least - many of the 388 paragraphs of the judgment are devoted to tracing the history, with the assistance (heavily discounted by the judge, though I think without casting aspersions on their integrity) of several motor racing journalists and writers including my old friend Karl Ludvigsen. So probably best not to spend much time on the history here - read the judgment or one of the many histories of Lotus (or Colin Chapman: Inside the Innovator by Karl Ludvigsen (Haynes, 2010)).


The case has a lot more to do with the facts than with the law, but it does serve as an object lesson in how to create problems. The judge held, in summary:

  • Team Lotus Ventures Limited (TLVL, the second defendant) owns the goodwill associated with the Team Lotus name and roundel
  • Group Lotus's claim to the name should be dismissed
  • TLVL's trade marks be revoked for non-use since at least 2003, when TLVL was not involved in Formula 1 racing
  • TLVL was entitled to register new trade marks for its name and the roundel device (so in due course it will have a statutory defence to an infringement claim again)
  • TLVL's use of its name did not infringe Group Lotus's trade marks in the name Lotus 
  • 1Malaysia (the first defendant) was not to be restrained from using the name Team Lotus by reason of a licence agreement between it and Group Lotus in 2009
  • 1Malaysia had been in breach of the licence agreement in failing to obtain approval for the manufacture and sale of 'Lotus Racing' merchandise in 2010, this licence having been validly terminated by Group Lotus in September 2010
Having started out sympathetic to to Team Lotus, whose efforts on the track so far have been pretty impressive, I am persuaded in particular by the evidence about the breach of the licence agreement that I should stick with Renault, whose factory I had the pleasure of visiting a couple of years ago. The judgment relates how the first defendant's director of marketing, Mr Choy, was denied sight of the licence agreement - a strange way to deal with your own director of marketing:
302.When he finally saw the Agreement in June 2010 he sent an email ...stating:-

"We have breached every clause in this Agreement there is to be breached".
303. In that he is correct.
    That brings to mind some classic lines from the Da Vinci Code case, and certainly doesn't suggest an approach to business that one might admire.

    The judge also expressed regret that the parties should have chosen to fight their differences out in the courts not on the racetrack. I dare say the defendants would be only too pleased to get within reach of the claimants - perhaps they will sometime. As it was, on Sunday, they managed 13th and 14th places, while the claimants got 8th place with their other car finishing in the barriers (through no fault of theirs, or the driver's, who ended up in hospital though evidently not injured). Both teams are adding significantly to the entertainment value of the racing this year: a pity litigation has to cast a shadow over that. Still, another interesting addition to the Formula One IP Casebook.
     

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