A dispute over team names between a Northern California cycling club and the domestic elite team of US criterium champion Dan Holloway has been settled out of court, scuttling the team's future and forcing the wheel company that sponsored the team to change its name.
The Alto Velo Racing Club of San Jose initially filed suit earlier this year against Rouleur Sports Group and Bobby Sweeting, claiming Alto Velo p/b Seasucker, which was owned by Rouleur and sponsored by Sweeting’s Florida-based Alto Velo wheel company, infringed on the club’s rights to the name.
In September, a California judge quashed a request for a default judgment against Rouleur and Sweeting, ultimately dismissing Sweeting from the suit entirely, because the club had failed to show irreparable harm or a sufficient likelihood of success on the merits.
“It was great,” Sweeting recently told Cyclingnews. “We won on all counts, I believe, and I was dismissed from the complaint and it ended up being a lawsuit just against Rouleur Sports Group. We were really excited to end it there.”
Sweeting said he and his partners planned to disband Rouleur Sports Group and offered to remove Alto Velo as the team's title sponsor for three years, hoping the offer would be enough to avoid further litigation and more legal fees.
The club's attorney, Jeffrey Fillerup of Dentons law firm, which is currently listed as a club sponsor, moved at that point to include the Alto Velo wheel company in the suit, however. At that point the start-up company determined it could no longer afford to fight further legal battles, choosing instead to reach a settlement that requires the company to change its name.
“We were very disheartened when we realized they weren't done with the litigation process,” Sweeting said. “They said they weren't going to be happy until Alto Velo changed its name. They filed to bring Alto Velo into the lawsuit in California, because at that point we had sold wheels in California, so they had a legitimate claim of jurisdiction at that point.”
Sweeting told Cyclingnews that the Alto Velo wheel company will change its name to Alto Cycling and operate as Alto, but the money his company spent to defend itself against the initial lawsuit scuttled its ability to keep the team afloat.
“The general sense of it was that we will win, we have the case to win. That's no problem. But it will be $500,000 to play in that arena. They have the free attorney and they can run us in circles as much as they can. We win, but two years from now it will be a half million dollars. Or the other option is that we basically give up and talk about what we can do in terms of a name change and ask for a little time to do it. So that's the route we went.”
As part of the settlement, Alto Cycling will be allowed to sell its remaining Alto Velo-branded inventory until it is gone or until December 31, 2017, whichever comes first. The company will also be allowed to continue using Alto Velo-branded display materials, manufacturing equipment and vehicles “through the end of their useful life” but not past December 31, 2017.
“I found that to be a small victory in this whole thing,” Sweeting said. “The fact that they didn't demand a name change tomorrow of everything, I was certainly appreciative of. They did give a bit on the timeline, and that will help us make the transition, for sure.”
Although Sweeting said the wheel company will ultimately be able to absorb the extra costs and legal fees, the real result of the lawsuit is the shuttering of a top US team.
“We had a lot of success this year; we were the winningest team in the US,” he said. “It was really successful. We were immediately known as an international brand and it provided a lot of product testing for us. We would love to continue, but we just don't have the money for it now.”
Sweeting said the loss of another team is especially disappointing in the current environment, where many US teams are struggling to find and keep sponsors in order to stay afloat.
“I personally struggle to understand why this was necessary. Like what damages were there and what did you get out of this? Why was this necessary?” Sweeting asked of the club, which is sponsored by Sunpower and whose members compete in USA Cycling events as the Sunpower Racing Team.
“All we did was release these riders to the market and hope they find jobs,” Sweeting said. “The wheel brand is going to be fine. The club is going to be fine. Everything is going to be fine except for the team. The team is gone, and that sucks.”
Correction: An earlier version of this article incorrectly stated that the Alto Velo cycling club filed a second suit in October. The October lawsuit was filed by Alto Velo wheel company in an attempt to have the case litigated in Florida rather than California. The settlement resolved both the California and Florida suits.