Monday 6th October 2003

Cobra Wars?

AC in trouble? Shelby on the offensive again?

---

Rumours are circulating this morning that AC Cars has been thrown into crisis with staff being laid off. The factory isn't answering its phones and the suggestion is that legal issues over the rights to build Cobras may have halted production.

Last year Carroll Shelby pursued a US Cobra manufacturer through the courts arguing that the shape and design of the car was his intellectual property and was not open for copying.

An out of court settlement was finally reached with Factory Five Racing that let them continue production but they agreed not to describe them as Cobra replicas.

The intellectual property is the subject of much wheeling and dealing and in June this year Shelby sold "Carroll Shelby Licensing Inc." and "Shelby Automobiles Inc" to a company by the name of Ginseng Forest who subsequently renamed themselves as "Carroll Shelby International Inc."

With the AC Cobra originally being based on the AC Ace the bloodline of the Cobra certainly belongs with AC. It would be a perverse piece of justice if production was indeed halted by an argument over ownership. It could also have far reaching implications for the many UK manufacturers of Cobra replicas.

Links :

• www.shelbyautos.com
• www.accars.co.uk
• Cobra Story
• Cobra Links

[skid]

Bit disappointed I suppose.

CS is/was a geat man but if you read the Shelby website AC isn't even mentioned once. Any novice would think he single-handedly invented the wheel and saved the world in his re-written history.

Doesn't that sound like familiar Yank style when you think of WW2??????

WA*KERS.

Mark
(thank god mine is on the road before the lawyers kill everything)

[jam1et]

I think its such a shame when companies have to rely on chasing out of court setlements or damages from the infringment of copywrites/patents etc. This usually happens when the company isnt generating enough revenue from it's usual sources and needs to please shareholders. Happens all the time in the IT industry. They have every right to do this but I believe it can be done in a much more dipolomatic ways.

[sel4.5]

Even the link above - accars.co.uk is for sale !

[dandarez]

...and another one bites the dust...(again in this case?) - but still no space for the longest surviving specialist Brit family)... When will the next marque (usually over-hyped) go? Not long I fear...

[dontlift]

Just followed the link to www.accars.co.uk and looks like this is up for sale aswell

[gnomesmith]

Today's Autocar reveals that AC Cars & Shellby have signed an agreement to co-operate in the development and sales of new cars.

[rutthenut]

Apparently there is an article in Autocar about this - as a press release from Shelby about how great it is for the AC Cobra.

I've not yet seen it, but there is nothing I can see on the autocar web site (autocarmagazine.co.uk).

If it is worded in such a way, it will be glossing over the effect of selling out the rights of production from the A.C.Cars company whilst they have a line of cars being built and ready to go. The staff certainly won't have seen any upside on their immediate exit.

Two questions:

(i) Does anyone know if AC and/or 'Cobra' is a trade mark, or registered trade mark for motor vehicles?

(ii) Is the Cobra bodystyle a registered design, in which rights have been licensed, or was this covered by simple unregistered copyright?

I realise that Ford use the Cobra name in the US, but may not have it registered for their exclusive use. And if the Cobra design was only covered by copyright, it would be at serious risk of being classed as 'public domain' due to the numerous Cobra clones wordlwide, so buying rights to this design may be a pointless exercise.

My guess is that the name of 'AC' is the part with any intrinsic value. If not, the Kirkham/Hawk 427SC cars would be accepted by more purchasers as they are as good as (actually, the same as) the 'real thing' - whatever that is now!

[joust]

Cars I think are Class 12.

Unfortunatly there are 100's of them for all sorts of parts associated with cars (e.g. Cobra car alarms) but if you want to spend your time searching it's here

http://webdb4.patent.gov.uk/tm/text

The most interesting one is http://webdb4.patent.gov.uk/tm/number?detailsrequested=C&trademark=893168 which is actually licensed to the Ford Motor Company, and is dated 1966!

Given it covers "Motor land vehicles", whoever has the rights assigned by that Ford TM will have the rights to the Cobra name (adding "A/C" on the front won't change it as being "passing off").

All on-line - all free

J

Edited to add

So to answer the questions

1) is answered above - Ford own the rights in the UK (and almost certainly world wide)

2) Shapes have only recently been able to be registered, but *can* be backdated (the coke bottle is the most famous case). However that was thrown into dissaray last year (see http://news.bbc.co.uk/1/hi/business/2052274.stm for details) - so, don't know!

J

>> Edited by joust on Tuesday 7th October 18:35

[grahambell]

rutthenut said:

Does anyone know if AC and/or 'Cobra' is a trade mark, or registered trade mark for motor vehicles?

Remember speaking to someone at AC some time ago, who said that Ford bought the rights to the Cobra name from Shelby many years back.

Also remember that when Cobra replicas started to appear in numbers (around mid-eighties) that Ford made an official statement saying they had no objections to companies making replicas of the Cobra shape but they couldn't use the name.

And while AC Cobras might be the real thing, some of the top replicas like Gardner Douglas are probably better cars.

[joust]

grahambell said:

Remember speaking to someone at AC some time ago, who said that Ford bought the rights to the Cobra name from Shelby many years back.

- see above

grahambell said:

Also remember that when Cobra replicas started to appear in numbers (around mid-eighties) that Ford made an official statement saying they had no objections to companies making replicas of the Cobra shape but they couldn't use the name.

That would figure. I've played a bit more and can't find the cobra shape registered anywhere.

grahambell said:

And while AC Cobras might be the real thing, some of the top replicas like Gardner Douglas are probably better cars.

- although there is something emotive about the "real thing". MoleV have an AC at the moment and I'm trying my hardest not to keep on going back....

J

[gnomesmith]

As the Cliff Davis owned Tojero Special from which the original AC Ace was derived cribbed heavily from the Ferrari Barchetta it would be somewhat ironical if Mr Shelby or the Ford Motor Co had registered the body design.

What fun the legal types could have.

[gt5s_1985]

Here's the official press released mentioned above:
Shelby and AC Once Again Make Automotive History
October 07, 2003 09:04:00 AM ET


Shelby and AC Strategic Alliance Paves the Way for the Next
40 Years and Beyond

LOS ANGELES, Oct. 7 /PRNewswire-FirstCall/ -- Carroll
Shelby International Inc. (OTC Bulletin Board: CSBI), and
AC Motor Holdings Ltd. announce today that a strategic
alliance has been formed between the two companies, thus
repeating history by bringing these two hallmark automotive
brands back together again. This historic strategic
alliance effort is being led by Carroll Shelby
International Inc.'s Chairman and Director Carroll Shelby
and AC Motor Holdings Ltd.'s Chairman and CEO, Alan
Lubinsky. Under this collaboration the two companies will
begin working together in all areas of marketing, sales,
manufacturing, distribution, and product development.
Details of this collaboration will be forthcoming.

The discussions with AC, Britain's oldest surviving car
maker, comes on the heels of the announcement that Carroll
Shelby has formed an historic partnership with the Ford
Motor Company to offer his expertise to Ford Performance
Group in a project to jointly develop specialty niche
performance products.

About Carroll Shelby International, Inc.

Carroll Shelby International, Inc. is the parent company of
Shelby Automobiles and Carroll Shelby Licensing.

Shelby Automobiles Inc. is manufacturing high performance
Shelby vehicles under the guidance of the legendary Carroll
Shelby and will be involved in prototype manufacturing,
design and engineering projects; and plans to increase
production and availability of these Shelby products
through an expanded dealer network and direct sales under a
license agreement with Carroll Shelby Licensing Inc. For
more information, call 702/325-4851 or visit the company's
web site at www.shelbyautos.com .

Carroll Shelby Licensing Inc., founded in 1988, is the
exclusive holder of automotive manufacturer and
entrepreneur Carroll Shelby's trademarks and vehicle design
rights, which include some of the world's most famous
muscle cars and high-performance vehicles, including the
car that brought home to the U.S. its first and only FIA
World Manufacturers Championship in 1965, the famous Shelby
Cobra Daytona Coupe. It also holds trademark rights for
Shelby- branded apparel, accessories and collectibles. For
additional information about the company or licensing
opportunities, call [phone], or fax [phone]
or write to Carroll Shelby Licensing, Inc., 11150 West
Olympic Boulevard, Suite 1050, Los Angeles, CA 90064 or
visit www.carrollshelby.com .

Certain statements in this news release may contain
forward-looking information within the meaning of Rule 175
under the Securities Act of 1933 and Rule 3b-6 under the
Securities Exchange Act of 1934, and are subject to the
safe harbor created by those rules. All statements, other
than statements of fact, included in this release,
including, without limitation, statements regarding
potential future plans and objectives of the company, are
forward- looking statements that involve risks and
uncertainties. There can be no assurance that such
statements will prove to be accurate and actual results and
future events could differ materially from those
anticipated in such statements.

About AC Motor Holdings, Ltd.

The history of AC dates back more than a century to 1901,
when British entrepreneur John Portwine and engineer John
Weller designed and built a four- seat touring car, which
they exhibited at the 1903 Motor Show at the Crystal Palace
in London. Their second effort was a three-wheeled delivery
vehicle in 1904 -- the Auto Carrier. By 1907, their first
successful passenger car, called the Sociable, was created,
bearing the now famous AC emblem. In the 1950's the AC Ace
was conceived and many people felt was the nicest British
sport car of its time. In the 1960's AC assisted Carroll
Shelby in realizing his dream of creating one of the most
famous sports cars of the 20th century, the Shelby AC
Cobra. To this day the AC brand is well known for its
craftsmanship. In 1999 AC produced the largest one-piece
carbon fiber automotive body that was used on a production
car, the AC Cobra CRS. It weighed about 22 kg without the
closures. AC has recently agreed to open a research and
development center in Malta and will also be producing
certain of its future model range at a facility in Malta.
www.acautomotive.info

© 2003 PRNewswire

[rutthenut]

Re. trademark/copyright/design rights

Thanks for the specific details on the Cobra name, etc. I had tried searching for design rights (and trademark) but had not found anything at the time.

Re. press release

Strange that this mentions 'AC Motor Holdings Ltd', as there is no UK company registered with that name! See www.companieshouse.gov.uk/info to search

Is it South African? If so, the press release is guilty of more than a little bit of spin when referring to the history of AC.

The web link to acautomotive.info does show the web site content that was previously accessed at accars.co.uk - although the UK domain name being offered for sale (legimately or not). The registrant for that domain name is Sine Equinon, via CSL Technologies Ltd.

If that name was registered on behalf of AC Cars Ltd (the company based in Frimley) then it should form part of the business assets of that company.

[liszt]

Hmmm been reading that website. Does sound fishy?
Why are prices in US dollars?
Why is there no mention of the Carbon body?

Saw a documentary on the Cobra a little while back. Ford where bank rolling Shelby to beat Ferrari because Ford were wanting to buy Ferrari but pulled out at last moment. So Uncle Henry said "humiliate them on the track"

I think.

[t1grm]

So cutting through the corporate BS what does this all mean? It sounds to me like the US Shelby company has bought AC cars in the UK and plans to shut down it’s operations in the UK set up it’s own production facility in Malta and then just badge the results as AC’s. Am I right?

[joust]

rutthenut said:

Strange that this mentions 'AC Motor Holdings Ltd', as there is no UK company registered with that name! See www.companieshouse.gov.uk/info to search Is it South African? If so, the press release is guilty of more than a little bit of spin when referring to the history of AC.

Nope...

www.cipro.gov.za is the equivalent - can't find any AC Motor Holdings there at all.

J

[rutthenut]

I'd say that Shelby haven't bought 'AC Cars' (the company) in the UK to shut them down, they have simply done a deal with Lubinsky for the supposed rights to the name and design, which AC Cars believed they had sole use of through an earlier agreement with Lubinsky. If so, he appears to have reneged on this deal (which was a verbal contract, backed up by the ongoing business of AC Cars) so that the current 'AC Cars' are left with either no rights to manufacture and sell the cars, or an expensive legal challenge to maintain their claim.

The result is that AC Cars, who weren't doing entirely well on the cashflow front, have been well and truly shafted and more than likely will have to go to the wall since they cannot even sell the cars they have on the shop floor.

That Shelby put out a press release referring to a similar-sounding company name is definitely glossing over the effect and the way in which this has been done. There is/was certainly some underhand activities going on. Whatever the verbal contract was for AC Cars to manufacture AC Cobras, it would be entirely unreasonable for any rights to be granted without a termination period that at least covers the time taken to produce the cars. But without a written contract, verbal contracts are much harder to resolve in cases of dispute, so AC Cars appear to well and truly f***ed.

Shelby of course has just done what he could view as a perfectly sensible business deal, getting legitimate (rights) to the AC Cobra name and design - which he had always claimed as his without having a legal backing to his claims. I'm sure he would be well aware of the situation with AC Cars Ltd, but that isn't exactly going to be any concern of his, especially as he has already set up a ghost company that will presumably take on a similar sounding name in the near future.

Cheers all.

[joust]

Why wouldn't AC just rename it? It's not as if anyone is that fussed if it's called a Cobra or a Rattlesnake is it - it's the shape and engineering people buy into at that high end of the market.

Don't buy that - I'd think it has more to do with pure economics - AC have hardly been the most profitable company lately!

J

[rutthenut]

It seems that 'AC Motor Holdings Ltd' is a Maltese company, so the press release is really pulling a fast one with its reference to AC the manufacturers, et al...

Also, the word (or name) 'AC' is a registered UK trademark (from 1924) that is apparently owned by 'AC Car Group Pty' of NSW, Australia. So too is an early AC logo, or 'stylised word' that has the letters in a curved design, without the circular border that is now more familiar. That was registered in 1946 and is also now owned by the Aussie company mentioned above.

Both of these were originally registered by AC in Surrey, but the rights were sold in 1996/1997, which is how they have ended up in different hands as the AC company has closed down and restarted under various names over the years - albeit with a lot of the original employees (some go back 35 years with AC, and are now out on their ear).

There are later registrations, I think for EU trademarks, with 'AC' and the AC logo in a circle both being granted as trademarks in 1997, for use in automotive manufacture, clothing and toys (i.e. cars and merchandising). These two are owned by 'AC Car Group Ltd'.

There is a UK company by that name, which is currently operating under a CVA agreement (one step before administration or liquidation). I would presume it is this company that has sold or licensed the rights to Shelby for use of the AC trademarks. So long as that sale was for the benefit of its creditors, that should be legal. But if not done correctly, that could be a problem for someone.

It's already a problem for AC Cars Ltd, who have been told they can no longer manufacture and sell cars under the name 'AC'.

Any lawyers out there who specialise in insolvency and intellectual property? Try to unravel the processes involved in this on a no-win, no-fee basis! I somehow doubt that AC Cars Ltd can afford a legal challenge otherwise. It is clear that they do not own the actual rights, but were operating under a verbal contract that gave them permission to use these trademarks. That the verbal contract was broken, without notice, is something they really should be able to fight.

That's my few pence worth on the subject anyway.

If there are any innaccuracies in my descriptions above, please advise me and I will be more than happy to retract any incorrect comments. I'd also like to know more about the actual details if anyone can share them.

Cheers,
J.R.

[rutthenut]

AUTOWEEK Article (clearly from a further Shelby press release)

A carbon fiber-bodied AC Ace with U.S.-supplied power will be the first fruit of the recently announced alliance between Carroll Shelby and British nameplate AC (AW, Oct. 6). Rolling chassis of the two-seaters with steel-tube space frames will be shipped to the States, where Shelby’s engineers will install an engine and gearbox, mirroring the deal that created the original Cobra. This time around, though, the rolling chassis will be built on the Mediterranean island of Malta, where AC is due to open a satellite factory Nov. 15.

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At least this is a bit more honest than the previous press release, since it mentions the Malta factory. Albeit with further spin on it being a 'satellite factory' (sounds like a replacement factory, going offshore, to me).

If you know anything of UK Cobra Replicas, you can probably guess who has made the fibre Ace bodyshells (hint, AC did not do this in-house).

What a mess of double-dealing going on here!

J.R.