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Congratulations FFR, the battle
is over and you reign Supreme!!
This Just In! 2/18/2002
Factory Five Racing Victorious as Shelby Loses Bid to Protect Shape
of Cobras
FACTORY FIVE RACING SUCCESSFUL REPLICA
Mark and David Smith of Factory Five Racing, Inc. with their successful
replica. (PRNewsFoto)[TK]
BOSTON, MA USA 02/16/2002
BOSTON, Feb. 16 /PRNewswire/ -- The following
release was issued today by
Factory Five Racing, Inc.:
The world's largest manufacturer of Cobra replicas,
Factory Five Racing
reached an agreement with Ford Motor Company and Carroll Shelby in the
two-
year long battle for the name and design of the legendary cars.
(Photo: http://www.newscom.com/cgi-bin/prnh/20020216/HSSA011
)
Factory Five Racing won the shape of the car, Shelby
and Ford keep the
names:
In conclusion to the case all sides agreed to a
consent judgment that was
entered on Monday Feb 11, 2002. The specifics of the agreement are
as
follows:
1. Shelby agrees to dismiss (with prejudice)
all claims to the shape of
the car. By giving up
claims to "Trade-dress". Shelby acknowledges
that the Look, Feel and
Spirit of the cars made by Factory Five are
not his. The judgment
with prejudice means that Shelby can never
again contest the rights of
Factory Five to produce it's current
production car kits which
Shelby asserted were replicas of the 1965
Cobra 427 SC and Daytona
Coupe automobiles.
2. In return, Factory Five merely agreed to not
use the contested marks.
Factory Five Racing principles Mark and David Smith
agreed to not use the
Ford Cobra and related Shelby marks for the following reasons ...
First, Factory Five Racing was not using the marks.
Second, the Company felt that the marks Cobra and 427
SC had become so
generic over the years (with the proliferation of
thousands of Cobra
replicas) that there was little specific value in
using them.
Lastly, the Company felt that despite claims by Ford
or Shelby, the words
are a small part of what has become an entire genre
of American hot rods.
The versions and styles of Cobra replicas are similar
to the phenomenon of
street rods that replicate 32 Ford roadsters.
The facts of the case were never ruled on as the
consent judgment was
executed before the beginning of the trial. The agreement was
consent by and
among the parties to resolve the case.
Minutes before opening arguments on Monday Feb. 11,
Judge Zobel ordered
Ford, Carroll Shelby and Factory Five to mediate the differences in
front of
Justice Mazzone of the first circuit.
The only matter ever adjudicated in the entire case
was when Shelby lost a
bid to shut down Factory Five last October during a motion for a
preliminary
injunction. The motion was dismissed outright and that losing
verdict for
Shelby spoke to the lack of legal merit of Shelby case (injunctions are
typically granted when there is a likelihood of success and a party can
show
harm).
Shelby had originally sought 10 million dollars in
damages and wanted the
destruction of the tooling and molds used to build the Factory Five
kits.
Shelby said previously, in an interview with Automobile magazine's David
E.
Davis that he would also seek $10,000 per vehicle from owners of
replicas.
Shelby's claims to registration, rights and ownership
of the design of the
Cobra through the U.S. Trademark Office is simply false. Shelby
has attempted
recently to register for the rights to the shape of the car, but the
application has not been approved and is being aggressively contested in
court. His agreement with FFR giving up his claims to the shape
further
undermines any credible claim he can make to others regarding any
supposed
trade dress rights. Most automotive enthusiasts readily admit that
the
original Cobras were modified AC chassis.
"With respect to Shelby's claims that the FFR
product is inferior to his
own current kit version of the Cobra ... Carroll has the right to
believe
whatever he wants about our product but the fact is the overwhelming
success
of the FFR kit means the marketplace has made up it's own mind ...
"
David Smith
Factory Five Racing
"Despite the tempest in a teapot that Shelby
excels at creating, the facts
are quite clear. This was a big win for our company, our customers
and
obviously the industry of kit makers. Shelby's claims of victory
are hollow
as we continue building what is now rightfully recognized as our own
designs,
whether they are inspired by vintage cars or not. If this is
indeed a win for
Shelby, I wish him many more similar victories in the future."
David Smith
The best summary of this two-year legal battle comes
from Mark Smith who
said, "We used to make replicas ... Now all we make are
originals."
Mark Smith
Owner FFR
There is still action pending against Superformance
(another maker of
Cobra replicas) on the same issues.
Here is the Latest as of 2/13/2002
WAREHAM --
Ford Motor Co. and Shelby American Monday night settled a trademark
infringement lawsuit against local kit-car maker Factory Five Racing
before the case even went to trial.
No details of the in-court settlement are available.
"The parties have agreed not to release any information to the
press for a week from the day of the settlement," said Randall T.
Weeks, Factory Five attorney, yesterday.
While no details of the settlement are available, Factory Five was open
for business yesterday and still rolling out the do-it-yourself Cobra
assembly kits at the center of the question. By staying open, the local
business, located on the Wareham industrial park on Kendrick Road, keeps
about 40 people on the job.
The settlement was reached Monday around 6:30 p.m. after court-ordered
mediation between the parties.
Judge A. David Mazzone mediated the settlement.
The trial of the kit-car maker accused of unlawfully reproducing Ford
trademarks was scheduled to start Monday at 9 a.m. at U.S. District
Court in Boston.
But as attorneys for Factory Five and Ford dragged about 60 boxes of
documents to the courtroom, Judge Rya W. Zobel ordered parties back to
mediation, citing the magnitude of the trial.
Witnesses from several parts of the country were also on hand to testify
in the case.
Closed-door negotiations ensued for the better part of the day and the
parties involved often met in the hallways and discussed the case.
Ford was seeking statutory damages and an injunction against Factory
Five for the use of the "Cobra" name and logo.
Automotive legend Carroll Shelby -- on hand Monday at the trial -- was
also suing the company for $10 million for allegedly counterfeiting the
Cobra design.
While a non-jury trial on the Ford suit was scheduled to start Monday,
the jury trial on the Shelby's suit was still pending.
Both suits were resolved Monday night.
Mr. Weeks had said last week that he was confident about his client's
chances regarding the Ford suit.
Factory Five had argued in court that Ford abandoned the Cobra name and
logo when it failed to use the marks in commerce and actively police the
marks.
It had also argued that Mr. Shelby abandoned his rights to the design
and Cobra name, in part by not trying to stop other companies from
copying it for 30 years. The Wareham company said the design had become
generic.
However Ford and Shelby attorneys had said that even though production
of the Cobra car stopped in 1997, Mr. Shelby continued to use the Cobra
name through licensing agreements and such side products as toy models.
Mr. Shelby has gotten 14 injunctions protecting his trademark in other
states and has fought trademark violations for years.
Ford owns the rights to the Cobra name and design, and Mr. Shelby uses
them under license.
Ford obtained the trademark from legendary Mr. Shelby as part of a
sponsorship agreement in 1965, when he raced in the World Manufacturers
Series.
Mr. Shelby created the Cobra legend by dropping a powerful Ford Mustang
engine into the body of a British-designed AC Ace roadster. He sold the
cars until 1967.
The cars quickly became the icon of an automotive era and have been
widely replicated for the last 30 years.
Mr. Shelby restarted manufacturing his original Cobra in the 1990s after
a long litigation with Ford.
Factory Five is the biggest kit-car maker in the world, producing about
500 kits a year.
The Factory Five Racing kit retails for $10,990, but a new Shelby Cobra
427 SC costs $59,000 to $90,000.
Kit-car customers have to provide an engine, chassis and other
mechanical components, bringing the total cost of the car to $16,000 to
$40,000.
This is the official Statement from FFR:
"Thank
you for you patience and understanding.
To all of you...
We trust you realize that while we have been anxious to talk about the Shelby
action, we have avoided doing so to ensure that we don't in any way compromise
our legal position.
As this matter
unfolds, we'll be posting updates to our website www.factoryfive.com.
An official release should be there sometime today or tomorrow.
In the past we
have been open and honest with everything about our company. We will
continue to do so, but obviously there are some things we won't be able
to discuss. We'll tell you EVERYTHING that we can, but as we assume the
leadership of a fight that may ultimately affect many people, their
families and their livelihoods, we have to do so with the greatest
caution and sense of responsibility!
Regarding the
Shelby action: We plan to resolve the matter in Massachusetts court,
where it belongs, not in the press. The facts are on our side and
fortunately we have the financial means to see this case to it's
rightful conclusion.
Shelby's original
action was filed months ago, on March 3, 2000. The case is likely to be
heard sometime in late 2001 or 2002.
Our day to day
business remains unaffected and we won't let any press releases or media
spins from Shelby distract us from the important job at hand.
FACTORY FIVE
RACING, INC.
On a personal
note: Whether it makes you disgusted, laugh, cry, or want to scream,
enjoy the show. This truly is the final chapter of the Shelby Legacy. In
the end, if he decides to embrace his loyal fans, or to dismiss them,
the world will judge him accordingly.
Mark and Dave
Smith"
This is Shelby's Press Release:
BOSTON, July 17 /PRNewswire/ -- With backing from Shelby American
Inc., its equity partner, Venture Nevada, and together with Ford Motor
Company, automotive manufacturing and racing legend Carroll Shelby has
launched an aggressive lawsuit in Massachusetts Federal Court against
Wareham-based Factory Five Racing, Inc., asserting trademark
infringement, dilution and unfair competition claims. A parallel lawsuit
has also been filed by Ford in the same court.
The suit charges Factory Five with unlawful use of Ford and Shelby
trademarks and other intellectual property rights. Factory Five, a
rapidly growing, five year-old company, has manufactured and sold more
than 1,000 counterfeit copies of the famous Shelby 427 S/C, according to
the suit.
In an effort to curtail the misuse of the Shelby® and Cobra®
trademarks, Shelby has for years tried diplomacy and negotiation, and
such previous efforts have resulted in numerous licensing agreements
covering a wide range of products. However, Shelby contends that several
large replica manufacturers, including Factory Five, seem determined to
continue their counterfeiting operations, unless they are stopped by
Federal Courts.
The suit claims that Factory Five and others sell packages featuring
bodies that copy Shelby's famous roadster. The companies then market
their packages as ``faithful reproductions'' of the 427 S/C while
frequently marking the cars with the Shelby®, Cobra® and Ford®
trademarks. This increasingly artful deception misrepresents a
counterfeit as if it is an original, the suit further states.
The action by Shelby challenges Factory Five's operation as a willful
deception and unfair competition in violation of the Lanham Act and the
Massachusetts unfair trade practices law. The suit seeks damages and
attorney fees, which may exceed $10 million. Of critical importance to
Shelby, the suit seeks an order to seize and destroy Factory Five's
fiberglass molds, which it uses to fabricate the 427 S/C knockoff.
``We have filed this suit to make certain that credit is given where
credit is due,'' stated Shelby. ``The knock-off car manufacturers don't
deserve any credit for what my team and Ford were able to accomplish in
the 60's. I don't have much time left, but while I'm here I'll do
everything I can to protect the Cobra and Shelby names, and my companies
will carry on long after I've gone.''
According to Shelby, this lawsuit is the first of several which will
target the largest knock-off manufacturers. ``Enough is enough,'' he
stated.
This action comes after the conclusion of legal proceedings in 1997
in Los Angeles Federal Court, in which Ford obtained a judgment, which
recognized the Cobra trademark as the sole and exclusive property of
Ford Motor Company. As part of the final resolution of the case, Ford
granted Shelby an exclusive worldwide license to use the Cobra trademark
and snake designs in connection with all 1960s Cobra vehicles, which
Ford acknowledged were created by Carroll Shelby and manufactured by
Shelby American, Inc. -- the world recognized Manufacturer of Record.
SOURCE: Shelby American Inc.
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