The era was the 1920s in Europe. As cars started becoming common among the rich, car races gained popularity. Different racing events were held across Europe in different countries and were called “motoring contests.” In 1950, the Fédération Internationale de l’Automobile (FIA, the governing body for world motorsport) organised the first-ever Formula One World Drivers’ Championship in response to the World Motorcycling Championship. The word “Formula” in “Formula One” indicates the rules and regulations the teams must adhere to, to participate in the championship. In a nutshell, ten teams compete to make the best possible car, better than their rivals, which favours its drivers to win the races throughout a season and culminate in winning the world championship at the end of a racing season.
Today, Formula One is more than just fast cars cruising around a circuit, team rivalry and passionate fanbases. From the moment it’s “lights out and away we go” until the chequered flag comes out, the adrenaline rush is unparalleled. But the process of making and putting a car on the circuit is as interesting as watching the race. There is a deeper technical and legal aspect to what goes before the race. Teams need to build their cars from scratch with a fixed budget and adhere to a set of rules and laws given by the FIA. This enables them to come up with unique innovations that can be cost-friendly, rule-conforming and a hundredth second faster than the other cars. It also gives rise to many intellectual property elements and battles involved that not just influence innovation but determine the strength of a team.
Patents, trademarks, industrial designs and copyrights are the main elements of Intellectual Property that can be found in Formula One. With innovations and inventions like hybrid engines, halos (titanium bars installed to protect the driver’s head in case of a crash) and DRS (Drag Reduction System), it would make sense for teams to file millions of patents every season of the game. But that is not the case. Most Formula One teams including the FIA are not keen on filing patents. The main reason behind this is that patent applications take years to get processed. During that period, the FIA could come up with new rules and regulations causing the teams to change their inventions or innovations. Thus, the whole point of a patent is lost when the invention itself is altered significantly and swiftly. The FIA restricts the filing of patents that limit the level playing field of teams. Then how do Formula One teams protect their inventions? The answer lies in Trade Secrets. Trade Secrets, unlike Patents, require no registration. Non-disclosure or Confidentiality clauses in the contracts of engineers, scientists and researchers can include high indemnity for breach of confidentiality, thus enforcing trade secrets. The employment or NDA agreements with engineers working on the technical aspects can include what inventions comprise trade secrets thus ensuring that the invention or innovation is kept secretive and not infringed. Another added advantage in choosing a trade secret would be that the invention or innovation procedures need not be disclosed in the public domain, hence keeping it away from the prying eyes of the rival teams. This gives the teams an upper hand over the other teams wherein they need not disclose the invention and hence have no fear of another team imitating it but also hold people infringing the trade secrets liable. A win-win situation! Additionally, to ensure full protection for the cars, a patent application must be filed in every country where the race is held which is a tedious task. However, patents for technology or simulations used outside the F1 car are mostly filed. The best example of this is the recently filed patent by Ferrari for a driving assistant system that helps drivers determine the position and the orientation of the car.
In 2007, the F1 team Ferrari alleged a senior engineer and a former employee of leaking trade secrets to team McLaren. Consequently, McLaren was fined $100 Million. This was called the “Spygate” scandal which demonstrated the way compensation could be enforced in case of a trade secret breach. But there are a few grey areas wherein it is difficult to protect trade secrets from getting infringed. For instance, in the 2023 Monaco Grand Prix, during practice, a Mercedes car crashed and was being lifted by a crane, leaving the floor of the car exposed. The same happened with a Red Bull car during the race, exposing its underbody while being lifted. The photos of the floor and underbody of the crashed cars were for the world to see and study. This provided teams with useful information and could not strictly be construed as a trade secret leak.
Trademarks form an integral part of Formula One. Logos, colours, taglines, track names and team names are covered under the ambit of trademarks. Unlike patents in Formula One, trademarks are taken quite seriously and registration of necessary trademarks takes place religiously. Team names like Scuderia Ferrari, and Williams Racing; driver names like Max Verstappen, and Lewis Hamilton (which was cancelled later); race names like Las Vegas Grand Prix are granted trademarks. Furthermore, the name for the unique celebration of winners drinking champagne from their shoes, Shoey, has also been trademarked in Australia!
Trademark disputes in Formula One are commonplace. The most notable trademark dispute would be Haas v. Guenther Steiner, wherein the team Haas sued former team principal Guenther Steiner for still using the team’s trademarks. Haas alleged that Steiner was profiting from the team’s branding and intellectual property. Steiner released a book in 2023 titled “Survive to Drive” which contained images and logos of Haas. But since there wasn’t any misleading information concerning Haas in the book and under the fair use doctrine, a Californian Court ruled in favour of Steiner.
Industrial Design Protection is another way of safeguarding the visual components of an F1 car. The chassis, materials used, and other aesthetic components of the car that are not technical or functional in any way and do not constitute an invention can be classified as Industrial Design and if granted registration, can be protected. This means, no other team can copy the visual aesthetics specifically attributed to or associated with a particular team. For instance, Ferrari has registered the steering wheel design and McLaren has registered its colour scheme.
A notable case of Industrial Design infringement is the infamous “Pink Mercedes” case. In 2020, team Racing Point revealed its new car, RP20, which had a striking resemblance to Mercedes’ 2019 model which caused a huge controversy. It was called the “Pink Mercedes” because the Racing Point RP20 was painted pink to align with the colour palette of their sponsor, BWT. Every season, the FIA releases a list of parts that the teams must design or outsource themselves. However, teams can exchange information on non-listed parts. After an investigation, it was found that Racing Point had cloned a majority of the listed parts from Mercedes, including the brake ducts. Racing Point was held liable for a breach of FIA’s regulations and this qualifies a case study for Industrial Design infringement.
Copyright in Formula One protects data, broadcasting rights, and 2D designs of cars amongst others. With the growing popularity of the sport, digital infringement on the broadcasting of races also rises. Many YouTube channels face cease-and-desist or takedown notices by the FOM (Formula One Management) for broadcasting races without a license.
In the case of Force India Formula One Team Ltd v. Malaysia Racing Team SDN BHD & Ors., Force India alleged that Aerolab and FondTech misused confidential information and infringed on its copyright by copying the team’s car designs. The England and Wales High Court found Aerolab and FondTech guilty of copyright infringement and awarded Force India with a compensation of £ 25,000. This encapsulates the landmark case concerning copyrights in Formula One.
While many may find it bizarre that millions find it amusing to watch race cars zoom past them in a repeated fashion, it is an undisputed fact that Formula One is a growing sport. It forms a unique arena where engineering, science, design, law, technology and, of course, drama, amalgamate. It becomes imperative to maintain a level playing field and safeguarding intellectual property is one of the ways to do it. Thus, intellectual property laws don’t just act as a set of rules but act as the backbone of preserving innovation while keeping healthy competition intact.
Authored by: Chinmayee Hegde
Blogger, The IP Press
Penultimate year law student at PES University
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