Chinese car maker wins MG trademark battle

19/02/2010 - 12:13:56

A Chinese manufacturer won its British High Court battle today over one of the most famous names in British motoring history.

Judge William Blackburne said the Nanjing Automobile Corporation (NAC) acquired the rights to the MG trademarks and logos when it bought the assets of the failed MG Rover from administrators in 2005.

He ordered a company in Worcestershire to stop using the famous octagonal logo and name on its MG X POWER supercar.

The judge ruled that Sports and Racing Europe, based in Tenbury Wells, was infringing the marks and had no entitlement to them.

He rejected argument by the British company that the trademark rights for its car had never been acquired by NAC.

"As William [ie Mr Riley] will confirm on Tuesday, we would now like to conduct due diligence, on the Dutch administrator's MG IP including European marks, selling rights in various countries, etc. With a shrewd down payment on our purchase, we could begin to shut both Nanjing and Caterpillar [another entity] down with threatened injunctions - and secure good terms for buying Caterpillar Logistics business ($75m per year)."

Mr Riley sought to distance himself from the stratagem outlined in this e-mail. But a fax dated 18 October 2007 from the lawyers acting for the Dutch administrator of MG Rover Nederland to NAC's Dutch lawyers suggested that Mr Riley had purported to act on behalf of the parties to the so-called Framework Agreement (of August 2006) in acquiring the Dutch rights and that, after agreeing a price of £4 million for those rights, had since "disappeared in thin air". Mr Riley denied that he had purported to represent NAC China in his negotiations with the Dutch administrator (about which NAC knew nothing at the time) or that he had subsequently disappeared. It is therefore a mystery how, if Mr Riley's denial is to be accepted, the Dutch administrator could have come to think that Mr Riley had acted in this way. It is not a matter that I can (or need) resolve.

In an e-mail to Mr Bilewycz (with a copy to Mr Riley) dated 8 June 2007 Mr Davis - the same Mr Davis of Davis Capital LLC and, according to a company search, a director of MG Sports and Racing Europe Ltd between November 2007 and January 2008 - wrote to say that: ...

It was Davis Capital that signed the original Letter of Intent with Nanjing Automobile (Group) Corporation [NAC} in February 2006; and helped to facilitate the “Due Diligence” Memorandum of Understanding with Oklahoma investors and NAC to create MG Motors North America, Inc (MG Motors).

1. 4.The first defendant, MG Sports & Racing Europe Limited ("SREL"), was incorporated in this country in January 2007. It carries on business as a manufacturer and supplier of cars. The beneficial ownership of its modest issued share capital and the make-up of its board of directors are far from clear. It is not in dispute, however, that its moving spirit, managing director and majority shareholder is the second defendant, a great-grandson of the William Riley who founded the Riley Cycle Company which later became the Riley Motor Company. Like his forebear Mr Riley is a sports car enthusiast. He has had very many years of experience in the car industry, initially as a design engineer and later in various capacities on the automotive engineering side

15. The business now in SRL was conducted from a shed at MG Rover Group's Longbridge premises.

23. Mr Purvis described the contention as a "complete red herring."

36. Under the column headed Country/Register five of the entries relate to Taiwan,

The actions of Natalie Atkins

96. On 10 January 2007 a Mr He Xiaoqing, a vice-president of NAC China