Haas F1 vs Guenther Steiner: Breach Of Employment Code & Trademark Infringement

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For hardcore Formula One and motorsport fans worldwide, the name Guenther Steiner (GS) is synonymous with the word legendary. Even among the casual F1 fans, GS has gained remarkable notoriety due to his over the top ‘personality’ which was elevated by Netflix’s award-winning series ‘Drive to Survive’.

At some point through his exceptional career, GS became a household name and one of the most notable ambassadors of the high-octane motorsport we all call F1, which predominantly has a major fan following in Europe. Through GS’s constant effort and perseverance, F1 has a rapidly growing interest and fan following in the US. Perhaps what stood out the most in GS’s illustrious career, was his vision and ambition to build an American F1 team, which he was able to build with the help of Gene Haas, who was looking to expand into F1. With Gene’s help, GS built the Haas Formula One team from the ground up and has helped shape the team’s success by serving as its Team Principal for almost a decade.

In 2024, after almost a decade, Haas Formula decided not to renew GS’s employment contract due to the team’s lacklustre performance over the years and failure to move up the grid, which is crucial in a hyper competitive sport like F1. This was greeted with mixed emotions of sadness and shock for many of GS’s fans who wished for him to continue in the sport. Things took a turn for the worse, when GS initiated legal proceedings against Haas Formula, for breach of contract by alleging non-payment of owed commissions by Haas Formula as well as unauthorized use of his name, image, likeness and reputation by Haas Formula.

The lawsuit was filed by GS in State of North Carolina, County of Mecklenburg in the General Court of Justice, Superior Court Division. It is worth noting that F1 is one of the most expensive sports in the world and running an F1 team requires unimaginable amount of investments, resources and talents to succeed in this hyper competitive sport. Keeping this in mind, it is only natural that the commissions which GS is alleging he is owed would be redacted after GS’s attorney filed a motion asking for portions to be sealed. Some sources claim that the alleged unpaid commissions are linked to sponsorship deals which GS brokered for Haas Formula using his reputation, experience and deep connections within the sport.

The second claim pertains to GS’s personality rights, wherein GS is alleging that Haas Formula continued to sell merchandise with his likeness on it and promoting the Haas Formula brand using GS’s name and image on promotional material as well as website, without his authorisation. According to GS, his name, likeness and reputation are unique to him and highly valuable, marketable and worth significant financial benefit to any person or entity who uses the said attributes to their commercial advantage. Interestingly, North Carolina law recognises unauthorised appropriation of a person’s name and likeness for commercial advantage as a tort. According to GS’s Attorney, Haas Formula’s refusal to pay GS any royalties or compensation for usage of his name, image and likeness for their own commercial advantage is without justification.

What is interesting is that a few days after GS filed his lawsuit, Haas Automation (the parent company of Haas Formula) sued GS and his publisher, Ten Speed Press, over alleged trademark infringement. The lawsuit was filed in the Central District of California (Western Division), wherein Haas Automation is alleging that GS unlawfully used and displayed and continues to display the Haas Automation trademark and trade dress in GS’s publication titled ‘Surviving to Drive’ for his own personal financial gains and illicit profits. Based on the information gathered by Haas Automation’s lawyers, GS’s publication had generated at least $4.5 million in revenue, which prompted Haas Automation’s four claims of relief which included trademark infringement, trade dress infringement, false designation of origin and California common law unfair business practices. Haas Automation are seeking damages and a trial by jury, and it would be interesting to see how the jury considers GS’s usage of Haas Automation’s trademark and whether the same would fall under the infamous US law doctrine of ‘fair use’.

From a layman point of view, it seems both GS and Haas Automation has been trying to derive benefits and commercial gains from each other, although GS’s claim for unpaid commissions seems to be a contractual right under the employment agreement, the exact quantum of such commissions are not public at the moment. It is safe to state that the claim amount exceeds $25,000 since the lawsuit was filed by GS in Superior Court Division, which would otherwise not have jurisdiction to address the controversy. Lastly, the most interesting aspect of the whole dispute is how GS and Haas Formula agreed to toll the statute of limitation relating to GS’s claims for a period of 60 days which was later extended multiple times which allowed GS enough time to file the present lawsuit. This concept of stalling and putting a pause on the statute of limitation is a very interesting concept because it allows the parties to try to settle the dispute amicably without foregoing on their legal remedies. One can only wait to see how the lawsuits will develop, although there is a high chance it will be settled between the parties given the long-standing relationship between GS and Haas Formula.

 

Author: Amartya Mody & Shaanal Shah


Lawyers.

Interns and Paralegals.

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