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Lotus - What's in a name?

NEWS STORY
21/11/2010

Mat Coch writes:

They may have finished the season as 'best of the rest' in the championship however, the battle is only just beginning for Lotus Racing. Having announced in Singapore plans to rebrand the team in the image of the iconic Team Lotus it soon became clear that behind the PR smoke and mirrors all was not what it seemed.

A dispute erupted between Proton, owners of Lotus Group, and the 1Malaysia Racing organisation, who operate the Lotus Racing Formula One team. It surrounded the use of the Team Lotus name, which Tony Fernandes' company purchased from David Hunt, who had been custodian of the outfit since 1994.

Lotus, as a singular entity, was founded by Colin Chapman in the mid-1950's, though its origins can be traced back to Chapman's own club racing career in the 1940's. When Lotus began building customer racing cars the Englishman created two separate companies, Lotus Group and Team Lotus, the intention being to run each independently and mitigate the risks associated with the racing team; while Team Lotus went motor racing Lotus Group went about the business of building and selling road cars.

The arrangement worked well during Chapman's lifetime, though, following his death, and a number of different owners since, the exact role (and rights) of each company has become somewhat muddled.

David Hunt, brother of 1976 World Champion James, bought Team Lotus as the company was in the final throws of its Formula One life. This gave him the rights and goodwill of the Formula One team, though not the ability to produce road cars branded Lotus.

In 1996 Lotus Group was acquired by Proton, a car company part-owned by the Malaysian Government. Lotus Group is understood to be solely responsible for road cars, though it has been a sponsor of both Team Lotus and a number of other teams in various categories over the years.

Hunt suggests that, when the purchase was made by Proton in 1996, there was insufficient due diligence completed, so while Proton believed they were getting both the Lotus Group car company and Team Lotus racing outfit in reality they only got the former.

Soon after the Lotus Group purchase was complete Hunt and Proton spoke in relation to the possible sale of Team Lotus. The deal never took place, and Hunt remained in control of Team Lotus. During the intervening years very little changed; Lotus Group made road cars while Team Lotus continued to protect the legacy of the Formula One team, and look for a way to return it to Formula One.

Cue 1Malaysia Racing, who entered the fold in 2009 with a view to join the Formula One grid in 2010. Purchasing a license from Proton 1Malaysia Racing created the Lotus Racing outfit, with which it contested the 2010 Formula One championship. Owned by Tony Fernandes, Kamarudin Meranun and SM Nasarudin the 1Malaysia Racing team was created as a holding company for the racing team.

In Singapore it was announced that the 1Malaysia Racing run Lotus Racing would be renamed for 2011 to Team Lotus. Proton and Lotus Group were not impressed, and withdrew the license they'd issued to 1Malaysia Racing over unapproved merchandising, a point Tony Fernandes has claimed the team are pursuing the validity of. By revoking the license Lotus Group have attempted to ban 1Malaysia Racing from using the term 'Lotus', in effect preventing them using the Team Lotus name for 2011.

Since that time three further announcements have been made. The first came from Lotus Racing, or 1Malaysia Racing, stating that after conversations with Lotus Group there would be no further announcements on the dispute until a resolution was reached.

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