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Team Lotus, Lotus Racing, Lotus and Proton Legal Action - Web Exclusive

Lotus Racing Chief Executive Officer Riad Asmat shed more light on why Team Lotus is coming back for the first time since 1994 in the 2011 Championship.

Sep 28, 2010

In an announcement made prior to the Singapore Grand Prix, Lotus Racing stated the team would be known as Team Lotus from 2011.

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"The migration from Lotus Racing to Team Lotus will take place over the coming months and the renamed team will be the direct successor to the iconic previous incarnation of Team Lotus when they take to the track in the 2011 FIA Formula One World Championship and beyond.

"Tony Fernandes and Kamarudin Meranun's Tune Group has acquired Team Lotus Ventures Ltd, the company led by David Hunt since Team Lotus was last on track."

They stated that through that agreement, Lotus Racing and Tune Group had "full ownership of the historic rights and goodwill of the Team Lotus brand and heritage."

Tony Fernandes stated: "Kamarudin, Nasa and I are absolutely delighted to have completed this transaction - It's difficult to express just what it means to us to now be able to say we are Team Lotus, one of the most iconic names in any form of sport worldwide, but we have been working very hard to make this dream come true, and today it has. My thanks go to David for looking after the Team Lotus brand so well over the period of his stewardship, and keeping the integrity of Team Lotus together. We are very excited about now taking over the brand and after our first year in Formula One, we believe we are ready to do justice to the legacy we have inherited. These are heady days for Team Lotus, and it will be a very exciting process for the team we have in place to help us achieve our goals, on and off track.

"It was always important to us that Lotus Racing and Team Lotus could be brought together to unite the past and the present, and now we have done so. We have enjoyed a successful first year as Lotus Racing, and our thanks go to Proton, Group Lotus and all our partners for the parts they have played in our year as Lotus Racing. But now we move on to a new chapter, and as Team Lotus we will be an even more potent force, both on and off track. Everyone associated with the team is looking forward to the challenges that lie ahead - even more so now we will be bringing back one of the most loved, revered and respected names in motor racing history. A new dream starts today - Team Lotus is back."

David Hunt, who had overseen the negotiations with Tony and his team, had apparently been Managing Director of Team Lotus since 1994. He revealed his feelings about returning Britain's greatest motor racing name to Formula 1, saying: "I'm delighted this day has finally arrived. In January 1995, when I had the simply awful task of making the loyal Team Lotus personnel redundant, I promised that somehow we would return Team Lotus to F1 in good order and properly funded. We had no idea of the huge difficulties we would have to overcome when I made that statement.

"Nevertheless, I simply would not allow the legacy of Colin Chapman's extraordinary achievements to die and I want publicly to thank the many loyal individuals who have worked to reach what sometimes seemed an impossible goal. The custodianship of the iconic brand and history now passes from me to Tony, Kamarudin and Nasa. In relinquishing this responsibility I am confident I am handing over to a team who have the financial resources, passion, energy, vision and long-term commitment to give Team Lotus the best possible chance of returning to the sharp end of the grid. I look forward to assisting the team towards scoring Team Lotus' 80th Grand Prix win - that will be the day when all the effort of the past 15 years will finally seem worthwhile.

A few days later, Proton (owner's of Lotus) responded to the announcement with its one statement for clarification of the purchase of "Lotus" brand by Tony Fernandes. It stated: "There is and always has been only one Lotus, the Lotus started by Colin Chapman. From the beginning Lotus made road cars and raced racing cars. Until 1994, Group Lotus, the road car manufacturer and Team Lotus, which operated the Formula 1 team, were in common ownership with common directors. In 1994, Team Lotus failed and Lotus has not raced since. Since 1994, David Hunt has claimed to have acquired assets of Team Lotus, including its name, from the liquidator. He has never raced as Lotus. Mr Hunt's attempt to acquire the name Team Lotus was ineffective. Group Lotus is the owner of all rights in the "Lotus" automotive brand including those relating to Formula 1.

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Last year, Tony Fernandes and 1 Malaysia Racing Team recognized this by taking a licence from Group Lotus to use the "Lotus" brand for the "Lotus Racing" team in the current Formula 1 season. With Proton's agreement, Group Lotus has now terminated its licence to 1 Malaysia Racing Team to use the "Lotus Racing" brand in the 2011 and future Formula 1 seasons as a result of the flagrant and persistent breaches of the licence by 1 Malaysia Racing Team, which were damaging to the "Lotus" brand.

"Following that termination, neither 1 Malaysia Racing Team, nor any other company associated with Mr Fernandes such as Tune Group Sdn Bhd or Team Lotus Ventures Limited, has the authority of Group Lotus to use any "Lotus" brand in the 2011 Formula 1 season. This includes the use of the brand "Team Lotus".

"Group Lotus understands that Mr Fernandes intends to rebrand the current "Lotus Racing" Formula 1 team to "Team Lotus" for the 2011 Formula 1 season. Mr Fernandes indicates that Tune Group has acquired the rights to the name "Team Lotus" from a business formerly owned by David Hunt called Team Lotus Ventures Limited. Group Lotus believes these rights to have no proper legal foundation, a fact of which Mr Fernandes was well aware when his company purchased them.

"Proton will support Group Lotus in taking all necessary steps to protect its rights in the "Lotus" name, including resisting any attempts by Mr Fernandes or his companies, or any other unauthorized person, to use the "Lotus" name in the 2011 Formula 1 season.

Dato' Sri Mohd. Nadzmi Mohd. Salleh, Chairman of Proton Holdings Berhad and Group Lotus commented, "We believe the Lotus brand to be one of the most valuable brands in Formula 1 today. We are the owners of this brand, and will take all necessary steps to protect it. Tony Fernandes has no rights to use the Lotus brand in the 2011 Formula 1 season, and we will strongly resist any attempts by him to use our brand without our permission and will withdraw our sponsorship of the Lotus Racing team."

"To put it simply, Group Lotus is everything Lotus. The fact that 1 Malaysia Racing Team entered into an agreement with Group Lotus to use the brand means that both Mr Fernandes and 1 Malaysia Racing Team recognizes and acknowledges Group Lotus' rights," he added.

Today, Lotus Racing responded with this statement: "SM Nasarudin, Kamarudin Meranun and Tony Fernandes, the three shareholders of Lotus Racing, announced on Friday 24th September that Team Lotus is back in Formula One from 2011. Lotus Racing has competed in the 2010 FIA Formula One World Championship under licence from Group Lotus parent company Proton, and today Lotus Racing Chief Executive Officer Riad Asmat shed more light on why Team Lotus is coming back for the first time since 1994 in the 2011 Championship.

Riad Asmat: "This has been an incredible year for everyone associated with Lotus Racing. Last week we brought Team Lotus back to the Formula One grid when we announced that we had bought Team Lotus Ventures from David Hunt, and would be racing as the successor to one of the most iconic names in world motorsport. This year, we have established ourselves as the leading new team in Formula One as a licensee of Group Lotus, and, although we all dreamt of bringing Team Lotus back to where it belongs, we could not do so in 2010 because those rights were owned by Team Lotus Ventures. As Tune Group has now bought Team Lotus Ventures it means we can now use the Team Lotus name for 2011 and beyond. We are all delighted we can go into 2011 with total confidence in what we own, and what we can take to the track.

"However, given that this is contested by Group Lotus we think now is the time to clear this matter up so there can be no further arguments. We have therefore today issued proceedings in the English High Court for a declaration that Team Lotus Ventures has the rights to use the Team Lotus name and everything associated with that brand in relation to Formula One.

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"Racing under the Team Lotus name from 2011 means our licence with Group Lotus has now come to an end. In reality, this has nothing to do with how we will go racing in 2011, as the ownership of Team Lotus has been clearly defined for many years. David was approached a number of times about selling the rights of Team Lotus Ventures, including one official offer from Proton/Group Lotus themselves. That must have been tempting for David, as the rightful owner of the Team Lotus brand and its rights. Oddly enough, Group Lotus also recently tried to revoke the Team Lotus trademarks at a hearing at the Trade Mark Registry, but they were unsuccessful. I suspect David's misgivings about their previous offer to buy were justified by that action.

"The licence debate really is a non-issue. It was a simple licence, attached to a one-year sponsorship deal with Proton for 2010 alone, and in fact for a tiny proportion of the amount invested by the shareholders into the team - approximately 1.5% of the total budget. Unfortunately, we never reached the point where we discussed extending that one-year deal. When we signed our licence to compete as Lotus Racing with Group Lotus, they were very clear that we could not make any reference to Team Lotus as they had no rights at all to the Team Lotus name or its rights. In fact, in the licence agreement between 1Malaysia Racing and Group Lotus, the use of the Team Lotus name is expressly prohibited as they had agreed contractually, as long ago as 1985, that they had no rights to use that name. That was obviously something we had enormous respect for, and made no attempt to change until we could do so rightfully, and with a very clear understanding of what we had acquired in Team Lotus Ventures. "So now the licence we ran under this year has been withdrawn by Group Lotus, and while we accept that this obviously means we have reached the end of that chapter, it opens up a new and very exciting one for everyone in our team. There will have to be some discussions with Proton and Group Lotus about the entitlement to terminate the licence. Frankly, they are trying to say that some very trivial points, including T-shirt design approvals of all things, gave them the right to terminate, but we thoroughly reject this.

"Now we look to the future. The details of what has been going on behind the scenes are coming to light, and that's good because it means the shareholders of Proton, the government, will now know the truth of what has been going on. However the important thing is to look at what we are doing to guarantee future success. We have already invested heavily in ensuring the Malaysian/ASEAN motorsports platform grows, something that cannot be said for our colleagues at Group Lotus. We created a world first when we ran Nabil Jeffri in our aero test earlier this year - the youngest ever F1 test driver. Fairuz has been gaining invaluable experience at the highest level by driving for us, and, through Tony and Din's AirAsia Driver Development program, we are giving young Malaysian/ASEAN talent the chance to reach the top. We are so proud to have laid the foundations for future success, and our fans acknowledge this every day. Personally I think it's odd that our colleagues at Group Lotus have not embraced what we are giving them - a global platform for creating huge awareness and great value for their operations, all at no cost to them. In one year we have made huge strides in the growth of Lotus Racing, and now it's all about Team Lotus."

We will continue to follow the story as it unfolds.

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