The patent paradox
A granted patent gives its holder the exclusive right to use the patented invention for a significant period of time – usually 20 years from initial filing. However, the process of registering a patent can be lengthy: for example, in the UK and in the US a first substantive examination of a patent application takes on average more than 500 days. The fast pace at which F1 teams innovate and modify their cars means that technology may well have been superseded long before a patent has been examined, let alone granted.
This rapid evolution of technology is due in part to the FIA Sporting Regulations and the FIA Technical Regulations governing F1, which can (and often do) change each season, sometimes significantly. These changes are often in response to advantages that certain teams had gained in the preceding season, thereby seeking to maintain a level playing field. Patented innovations may therefore be rendered obsolete by changes to the Regulations, which in turn means there is little incentive for teams to invest in patent applications. For example, the rules governing the design of the cars’ floors were adjusted for the 2021 season, restricting the use of certain aerodynamic techniques that had enabled cars to generate significant downforce and improve grip. The technology had however made it difficult for cars to follow closely behind (hence reducing the amount of overtaking), and so the change was made principally to maintain competitiveness and spectator interest.
Patents for technology that is applied outside the F1 racing car itself (for example, in relation to simulators), and thus falls outside the Regulations, may have greater longevity. For example, Ferrari recently filed a patent for a driving assistant system to help train its racing drivers, with the technology in question determining the position and orientation of the car on the track and showing the driver the optimum racing line. Signals that could have previously appeared on the steering wheel, including prompts for acceleration, braking and steering input, now appear on the windscreen and can be used to optimize racing efficiency. The patent was published at the United States Patent and Trademark Office in March 2023 (see more here).
Another potential obstacle for teams heading down this route is patentability: it is not always straightforward for the inventions of F1 teams to meet the requirements for securing a registered patent. In particular, many of the innovations that are made will traverse the tricky “excluded subject matter” of software, mathematical methods and presentations of information. In addition, given that F1 teams modify racing cars incrementally on a race-by-race basis during a season, inventions may not always satisfy the novelty and inventiveness thresholds (explained in more detail here).
The requirement to publicly disclose information about the invention also acts as a deterrent to filing a patent application. In particular, the applicant must disclose sufficient information in the patent application for others to be able to put the invention into practice. As such, if the patent application does not ultimately proceed to registration, competitors are free to use the invention. Further, even if a patent is subsequently granted, competitors may steer their own R&D efforts to work-around the patent while nevertheless building upon the efforts of the patentee. For this reason, an F1 team will not necessarily file its patents in the name of its main operating company, but instead use multi-layered company structures and unrelated company names as a way of making it more difficult for rivals to identify them.
Taken together, these factors provide some explanation as to why patents do not appear to be at the forefront of the intellectual property strategies of F1 teams.
Nevertheless, it is more common for F1 teams (or their affiliates) to file patents that cover technology for use outside of the sport, particularly in road cars. For example, Williams Hybrid Power (previously a subsidiary of the company that owns the Williams F1 team) registered a patent for a unique version of the Kinetic Energy Recovery System used in F1. These systems convert a car’s kinetic energy into electrical energy as the car decelerates, allowing storage and redeployment of the energy to drive motors and boost the car’s acceleration and overall performance. This technology has since been used in road vehicles, including modern hybrid cars.
Trade secrets as an alternative
Whilst the use of patents to protect F1 teams’ key innovations may be limited, the laws which protect trade secrets provide a powerful alternative. Indeed, this is evidenced by a number of legal disputes between F1 teams.
Trade secrets (as well as confidential information and confidential know-how more generally) are protected under English law by the equitable cause of action for breach of confidence, which is supplemented by the Trade Secrets (Enforcement, etc.) Regulations 2018, which implemented the EU Trade Secrets Directive (Article 2(1) of Directive (EU) 2016/943). The position at law may also be clarified and supported by contractual terms agreed between parties when sharing confidential information with one another.
Relying on protection of innovation as a trade secret does not necessarily involve the time and cost taken to obtain patents and can therefore be a useful alternative for innovative F1 teams and suppliers. Indeed, F1 teams’ cars are held as closely guarded secrets and built in small numbers, such that competing teams cannot obtain access to them in order to extract components, analyse and reverse-engineer the technology (which is a common reason for needing patent protection to retain any control over use of the invention).
In practice, however, relying on trade secrets can be a precarious strategy for an F1 team, no matter how much care is taken. Information may be deliberately leaked by staff, or lost as a result of human error or factors outside of teams’ control, and once leaked it is usually impossible to retrieve. For example, at the Monaco Grand Prix in 2023, one of the Red Bull cars was craned to safety following a crash. Other teams were then able to analyse photographs of the underside of the car’s floor, which is a key area for technological innovation.
Further, F1 engineers frequently move between rival teams, meaning their knowledge and expertise may be transferred. F1 teams aim to mitigate these risks by including watertight confidentiality provisions, long notice and gardening leave periods in their employment contracts and equivalent non-compete provisions in consultancy and outsourcing agreements. Because knowledge and technology advances so quickly in F1, the rationale is that the knowledge held by the individual will be outdated and less valuable by the time they move to a competitor. For example, Mattia Binotto left his role as team boss at Ferrari in the 2022 season and will not return until the 2024 season due the operation of the gardening leave provision in his employment contract.
In a case between the then-rival F1 teams Force India and Malaysia Racing in 2012, Force India was held to be entitled to EUR 25,000 in damages from Malaysia Racing on the basis that Force India’s former employee (who had moved to Malaysia Racing) had misused Force India’s confidential information. However, the employee’s contract with Force India did not contain a restrictive covenant regarding future employment, and thus the employee was entitled to join Malaysia Racing immediately and to use the general skills, knowledge and experience learned during his time at Force India for the benefit of Malaysia Racing.
A further notable example of the value of trade secrets in F1 and the significant potential consequences of a finding of misappropriation was the 2007 “Spygate” controversy, where the Ferrari F1 team claimed that former employees had stolen its confidential information and used it to benefit the McLaren and Renault F1 teams. The FIA investigated the allegations and found that McLaren had gained a dishonest and fraudulent sporting advantage by collecting and holding information from Ferrari. The consequences were significant, including McLaren’s exclusion from the Constructors’ Championship and a record-breaking fine of USD 100m.
The same concerns around information sharing can arise when F1 drivers move teams. For example, it is likely that Mercedes will look to take greater care in sharing confidential information, such as designs, with Lewis Hamilton ahead of his move to Ferrari in 2025.
Consistent with common practice across the innovative industries, F1 teams also include robust provisions on ownership of IP in their employment and consulting agreements, to ensure that rights such as copyright and design rights (which may not necessarily contain confidential information, but nonetheless hold value) developed by an employee or consultancy in the course of their work, are owned and controlled by the team.
Closing thoughts
Whilst patents have a key place in protecting technical inventions, F1 serves as a reminder that different approaches may be required in certain industries. A unified IP strategy is crucial for managing these risks effectively.
