Hamilton’s Departure Puts Mercedes Trade Secrets at Issue

Feb 23, 2024

By Kerri Cebula, JD

February 1, 2024 was deadline day for the January transfer window in world football (soccer).  But the biggest transfer news of the day came from the world of motorsport when word began to leak that seven-time Formula One World Champion Lewis Hamilton would be leaving Mercedes, the team he won six of those championships with, to drive for rival Ferrari starting with the 2025 season.  While this was a consistent rumor over the years, usually when Hamilton was negotiating a new contract with Mercedes, this time the rumor was confirmed via a statement from Mercedes late in the day.  One of the immediate questions to arise, other than why, is what would Peter “Bono” Bonnington, Hamilton’s long-time race engineer, do?  Would he stay at Mercedes and work with their new driver or would he follow Hamilton to Maranello?  At the time this article was written, there has been no news regarding Bonnington’s future, but his future does bring up questions regarding Mercedes’ trade secrets.

The United Kingdom and Germany (both home to Mercedes) and Italy (home to Ferrari are all signatories to the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)[1].  TRIPS defines undisclosed information, also known as a trade secret, as a:

“(a)  …secret in the sense that it is not…generally known or readily known among or readily accessible to persons within the circles that normally deal with the kind of information in question;

            (b)  has commercial value because it is secret; and

            (c)  has been subject to reasonable efforts to keep it secret.”[2]

Under TRIPS, those who hold undisclosed information must prevent it from being disclosed to, used by, or acquired by others without the consent of the owner of the undisclosed information.[3]  The 2024 Formula 1 Technical Regulations also allows for the protection of intellectual property, which includes trade secrets, know-how, and confidential information[4] and forbids competitors, including their employees, from directly or indirectly sharing any intellectual property[5] and forbids competitor teams from using movement of personnel to get around this directive.[6]

A vast majority of the information held by a Formula One team would be considered trade secrets.  First, the information is not generally known or readily accessible to those who deal with that type of information.  Formula One does have requirements that a car must adhere to, but unlike in other forms of motorsports, there is quite a bit of leeway for the teams to build their cars.  How the teams build their cars cannot be shared with those outside the team under the Technical Regulations.  Those secrets do have a commercial value – the prize money given at the end of the year, which is dependent on the team’s place of finish in the year-long Constructors Championship standings.  The question in Bonnington’s situation is how does Mercedes make reasonable efforts to keep the information that Bonnington has access to, and needs to have access to to do his job, a secret.

Most, if not all, of those who work for a Formula One team have an employment contract, particularly those who have access to sensitive information.  These contracts will typically include a non-disclosure clause and a non-compete agreement.  When those to have access to sensitive information leave a Formula One team for another, the employee is usually placed on what is called gardening leave.[7]  During this time, the engineer cannot work for their new team, but also does not work for their old team.[8]  In April 2021, Red Bull announced that it had hired Ben Hodgkinson from Mercedes to lead their new powertrain unit.[9]  Hodgkinson was placed on gardening leave and could not begin at Red Bull until May 2022.[10]  In April 2023, Ferrari’s Sporting Director Laurent Mekies was announced as the new Team Principal at the then named AlphaTauri and he would begin that role at the end of the 2023 season.[11]  In July 2023, Ferrari announced that Mekies had left his position with the team and it was believed that Ferrari and AlphaTauri agreed that Mekies would be on leave until beginning his position at AlphaTauri in January 2024.[12]  Both of these moves would ensure that Hodgkinson or Mekies had access to the most up to date sensitive information and could not take it  to their new teams.

This is more complicated with it comes to the race engineer.  A Formula One race engineer is the lead of the driver’s team, both in the race shop and at the race track.  At the track, the race engineer is the point of contact between the driver and the rest of the team.  This puts the race engineer in contact with the car set up, telemetry and other data, strategy, and a host of sensitive information.[13]  Off the track, the race engineer is responsible for testing and simulations, which also put them into contact with sensitive information.[14]  A race engineer is also involved in the development of the race car[15].  In short, race engineers have access to quite a bit of sensitive information, much of which can be protected as a trade secret.  If Bonnington decides to follow Hamilton to Ferrari, Mercedes will need to decide what to do with his access to sensitive information.

One thing Mercedes could do is leave Bonnington out of the discussions for the 2025 car.  Theoretically, Bonnington would still be able to perform his duties in 2024. When Mercedes reserve driver Esteban Ocon was leaving to join Renault, Mercedes began excluding Ocon from meetings about developments that would impact the car for the following year and kept from him anything that the team deemed to be sensitive information.[16]  The team did allow him to continue working on the current season’s car.[17]  While Bonnington could, theoretically, be left out of the discussions on the 2025 and still be able to perform his duties in 2024, Formula One regulations will be undergoing a significant change in 2026 with changes to both the power unit and the chassis, leaving the regulations for 2024 and 2025 relatively similar.  By virtue of working on the 2024 car, Bonnington could have knowledge of Mercedes’ 2025 plans.  Because of this, Mercedes may want to place Bonnington on leave for the season.  But there is also the human side; placing Bonnington on gardening leave for the 2024 would leave Hamilton without the engineer who was with him for the six World Championships he won at Mercedes and may sour the end of the working relationship between Hamilton and Mercedes.  And if Bonnington decides to stay, then none of this will matter to Mercedes.

[1] Agreement on Trade-Related Aspects of Intellectual Property Rights, Apr. 15, 1994.

[2] Agreement on Trade-Related Aspects of Intellectual Property Rights part II 7, Apr. 15, 1994.

[3] Id.

[4] Federation International de l’Automobile (FIA), 2024 Formula 1 Technical Regulations Issue 3, https://www.fia.com/regulation/category/110

[5] Id.

[6] Id.

[7] See Adrian Newey, How to Build a Race Car, 228 – 229, 2017.

[8] Adrian Newey, How to Build a Race Car, 228 – 229, 2017.

[9] Mercedes engine head Hodgkinson to join Red Bull in May after teams agree release date, Formula 1 (Jan. 21, 2022), https://amp.formula1.com/en/latest/article.mercedes-engine-head-hodgkinson-to-join-red-bull-in-may-after-teams-agree.4bHccF9rWnF7KXBe7wY6t9.html

[10] Red Bull lure experienced engineer away from Mercedes to head up new powertrains division, Formula 1 (Apr. 23. 2021), https://www.formula1.com/en/latest/article.red-bull-lure-experienced-engineer-away-from-mercedes-to-head-up-new.1S2OASlXqJd5FAdTpdGKWi.html

[11] Jake Boxall-Legge, Ferrari’s Mekies to replace Tost as AlphaTauri F1 team principal at end of 2023, (Apr. 27, 2023, 6:26 am), https://www.autosport.com/f1/news/mekies-to-replace-tost-as-alphatauri-f1-team-principal-at-the-end-of-2023/10460888/

[12] Filip Cleeren, Ferrari appoints new F1 sporting director as Mekies departs, Autosport (Jul. 27, 2023 7:42 am), https://www.autosport.com/f1/news/mekies-leaves-ferrari-role-ahead-of-alphatauri-f1-switch/10500638/

[13] Insight: the trackside engineers, Mercedes AMG Petronas Formula One Team, https://www.mercedesamgf1.com/news/insight-the-trackside-engineers

[14] Principessa, The role of the F1 race engineer, F1 Technical (Aug. 3, 2006, 3:46 pm), https://www.f1technical.net/features/3645

[15] What does an F1 race engineer actually do?  Bono & Riki explain!, YouTube (May 23, 2020), https://www.youtube.com/watch?v=UlYqi8_GtiE&t=616s

[16] Mercedes to phase out Ocon’s role to protect ‘sensitive’ information, Formula 1 (Sept. 14, 2019), https://www.formula1.com/en/latest/article.mercedes-to-phase-out-ocons-role-to-protect-sensitive-information.3LkCElsm1dwj4BwItEIGWF.html

[17] Id.

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