Why a competing series within F1 is legal


Just 24-hours after FOTA announced that it would end its threat of a rival series to F1, FIA president Max Mosley sent a letter to the World Motor Sport Council saying that "it is possible that FOTA will set up an independent series."

He clearly had a crystal ball and that is little surprise since in his letter Mosley also indicated that he may do a u-turn on his plan to not stand again as FIA president - a condition which was critical to FOTA calling off its rival series. So F1 may still face this threat but, according to Pitpass' business editor Chris Sylt, that doesn't mean to say that it won't use F1 cars.

From the inception in 2001 of the manufacturers' group, the Grand Prix World Championship (GPWC), through to its later incarnation as the Grand Prix Manufacturers Association (GPMA), there was lively media speculation over what its rival series would be called if it went ahead. It was initially suggested that the new series could be called 'GP1' but in 2005 that word was registered as a trademark by Bernie Ecclestone's private company Formula One Promotions and Administration.

In February 2005, the Daily Telegraph reported that the GPWC, according to its spokesman, was "not excluding the possibility of using the Formula One name". Of course not only did it not do this but the threat of a GPWC series ended with an agreement under which the teams' prize money doubled to the current 50% of F1's profits. However the threat of a new rival series raises the naming question yet again, and, according to one very well-placed source, the manufacturers could have played an even stronger hand by calling the cars in their series Formula One cars. FOTA, take note.

Under an agreement with the European Commission in 2001, the FIA committed in principle to attaching its name to any series, if asked by organisers, promoting a definitive competition which is properly managed, sufficiently popular and developed. In short, the FIA can not favour the FIA F1 world championship over rival series. And apparently it goes far deeper than that.

"Had the GPWC called their cars 'Formula One' they would have been in quite a strong position if the cars were built to the then F1 regulations - if a car is a genuine F1 car, it is difficult to stop someone calling it that," says the source. There is good reason for this.

The technical regulations define what constitutes an F1 car just as many other devices have regulations which they must meet in order to be named appropriately. For example, if a lock is built with certain components, which are stipulated in safety regulations, then it can legally be known as a mortice lock (dead locks to you and I). Likewise, if cars are built to the F1 technical regulations then they simply are F1 cars - there are no two ways about it. The EC ruling ensured that neither the FIA nor Bernie Ecclestone's business had exclusive hold over cars being described as F1. In fact, the EC went one step further by concluding that as a result of its changes to the sport "competing events and series within the formula one discipline will be possible."

So far so good. However, simply because a FOTA-run series could use Formula One cars, this doesn't mean to say that it could be called F1. The source says that the manufacturers would have run "the risk that Formula One Management would sue them for passing off if they in any way described their series (as opposed to their cars) as Formula One. For example a 'Formula One World Series' would have been at risk but, then, what about a 'World Series For Formula One Cars'? A lawyers' feast."

Ecclestone's ability to object comes from the fact that his Formula One series has 60 years of reputation behind it and so he could say that the rival is passing off as this. However even this has been questioned.

'Formula One' defines a class of motor racing judged according to engine size, weight and fuel capacity. However, brands which are protected by trademark law are not supposed to be descriptive of the goods or services but be distinctive of them. As a result of this, Ecclestone has failed in cases against companies which have used the F1 name.

In 2000 FOL filed a complaint to the World Intellectual Property Organisation (WIPO) about the company Formula 1 Internet which registered the 'F1.com' domain. Ecclestone claimed the company had "no rights or legitimate interests" in the domain. However, WIPO ruled against FOL saying its "complaint offers no evidence of trade mark registrations for 'F1' by itself."

This defeat didn't stop Ecclestone. He issued further court action claiming trademark infringement but the company retaliated by bringing an anti-trust lawsuit which Ecclestone unsuccessfully attempted to block by applying to have it dismissed. One month before the legal battle was due to commence in February 2002, Formula 1 Internet accepted a $10m settlement offer from Ecclestone to buy the company.

The same year, Ecclestone crashed out of another case this time against a company called ChannelF1 and, in his ruling, George Salthouse, comptroller general of the UK trademark registrar, said that Ecclestone's companies have "shown no goodwill or reputation in Formula 1 or F1 as trade marks or trade names."

Most recently, in 2007 the news organisation Racing-Live successfully blocked Ecclestone's company from getting exclusive rights to the 'F1' abbreviation. UK Trademark Registry official David Landau ruled that simply because Ecclestone's company was the only business organising F1 races "does not mean that the public will perceive F1 as a trademark. It just means that currently it enjoys a monopoly on the races. However, if private owners of F1 cars race them on a friendly basis is that not an F1 race, if not on a commercial basis?"

Powerboats and air racing, among other sports, all have 'Formula One' vehicles. There is even a 55-year-old stock car series in the UK called BriSCA Formula One (www.brisca.com) which demonstrates that the name is not exclusive to Ecclestone's racing series. However, Ecclestone does have an arsenal of trademarks covering 'Formula 1' so FOTA would have to be prepared for a fight if it wanted to use this term in the name of its series.

Calling its cars Formula One cars would of course require FOTA to build them according to the 2010 F1 technical regulations but on 17th March these were agreed by the teams. The only element they disagreed with was the voluntary budget cap but this would not be an issue in their own series since all the participants would be in agreement not to race under it. However, in order to have any say in the regulations affecting their cars FOTA would have to also run 'B' teams in F1. The FIA should not set regulations which favoured the FIA F1 series but that doesn't mean to say that they would suit FOTA.

The source adds that "by threatening a series from within, using F1 cars and with all the FIA facilities (circuits, personnel, medical, safety, marshals, etc) at their disposal, their credibility would have been much higher."

Interestingly, FOTA was clearly leaning in this direction as Ross Brawn stated on 21st June that a rival series "would need a regulatory body...In fact ironically I think the agreement with the European Commission is that the FIA have to offer to do that to any competitive series that wants to set up...they may not be the body that sets the rules, they can be determined by some other mechanism. But if you want, the FIA can run the series for you. They can provide the stewards, the scrutineers and things of that nature. So that's available if FOTA wanted to take it up."

We my never find out if it would have done this and, likewise, the name of Sylt's source will also never be printed since he spoke under condition of anonymity. Suffice it so say that even some F1 insiders might be staggered if they knew who it was.

Article from Pitpass (http://www.pitpass.com):

Published: 05/07/2009
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