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AT&T's race car logo lawsuit crashes and burns

Wanted - wireless brand to go fast for a change

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A federal appellate panel in the US brought AT&T's fight to display its logo on a race car to a screeching halt last week, ruling that the telecomm giant did not have standing to challenge a NASCAR decision refusing to allow the company to place the logo on the car.

The dispute arose after NASCAR, the sanctioning body of US stock car racing, decided that it wasn't going to allow AT&T to replace the Cingular spread-eagled inkblot-man logo on the Number 31 car with AT&T's death-star logo after AT&T decided to phase out the Cingular brand once it completely bought the wireless carrier.

NASCAR has an exclusive $700m sponsorship deal with Sprint Nextel for its premier race series that prohibits any Sprint Nextel competitor from sponsorships or advertising associated with the premier series.

Cingular had sponsored the No. 31 car since 2001, and had been allowed to continue its sponsorship despite the Sprint Nextel arrangement because of an exception in the exclusive deal that approved of pre-existing sponsorships by Sprint's competitors. NASCAR and Richard Childress Racing (RCR), the owner of the No. 31 car, had added a grandfather clause to their racing contract that met the terms of the exception.

Once AT&T decided to kill the Cingular brand and swap logos, however, the situation,er, spun out of control. NASCAR blocked the logo change, arguing that the terms of the grandfather clause only applied to the Cingular logo, not the AT&T logo.

AT&T then sued NASCAR for breach of the grandfather clause, and asked the court for a declaration that it could use its logo on the car, driver uniforms and merchandise. The district court initially granted a preliminary injunction preventing NASCAR from interfering with the logo switch, after finding that AT&T was an intended beneficiary of the grandfather clause contained in the RCR-NASCAR contract.

A panel for the Eleventh Circuit Court of Appeals disagreed with the lower court, however, and vacated the injunction. The court held that AT&T did not have standing to challenge NASCAR's decision, disagreeing with the district court's determination that RCR and NASCAR intended to benefit AT&T through the grandfather clause.

This decision would seemingly doom AT&T's hopes of keeping its logo on the No. 31 car, but the company doesn't appear too worried. According to a local news report, a company spokesman has expressed confidence that the logo will be on display for an upcoming race at the Michigan International Speedway on Sunday.

This probably signifies that the company plans to appeal the decision to the entire Eleventh Circuit, which could then overrule the panel's decision and reinstate the lower court decision.

The judicial panel apparently anticipated this reaction, and issued a companion order arguing against an en banc review. The court stated that the proper way to challenge its decision, since it was based primarily on an interpretation of state contract law, is to petition the original panel for a review of its ruling.

Either way, AT&T can move for a stay of the case while it asks for a review of the panel's decision, which would allow it to keep its logo on the car at least temporarily.

The only way to know for sure what will happen is to watch the No. 31 car on Sunday to see if the AT&T logo accompanies driver Jeff Burton around the Speedway track.

AT&T might be able to keep its logo racing for a few more days, but these legal developments are rapidly closing the door on the company's attempt to associate its wireless division with high speeds.

The EDGE network isn't getting the message out there, that's for sure. ®

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