Friday, 26 February 2010

Not with a bang, but a whimper ...

The demise of the MG Rover Group - the last remnant of Britain's indigeous volume car industry - is an unedifying tale, but the latest instalment even less edifying than anything that has gone before. Nanjing Automobile Corporation v MG Sports and Racing Europe Ltd and Riley [2010] EWHC 270 (Ch) (noted a few days ago, where you'll find the link to the judgment) is a strange mixture of trade mark infringement and passing off, applications for rectifcation of the register, applications for revocation (of the same 32 marks in respect of which the same parties sought revocation), joint liability and even groundless threats.

The final stages of MG Rover's life were, to put it mildly, confused. Those of a suspicious turn of mind might say that the confusion was deliberately engineered, and certainly when the smoke cleared the one thing that everyone could be certain about was that the so-called Phoenix Four who had picked up the distressed remains of the British motor industry had made a tidy profit out of it. Particularly controversial was the sale of MG - a marque for which many enthusiasts have a particularly soft spot - to Nnanjing Automobile - who do seem to be making a sterling effort to make the most of it and keep the name going.

However, another part of the MG empire was flogged off to one William Riley, a name almost as revered in the British motor industry as MG: his namesake and (he claimed, though the family refutes the claim) great-grandfather had founded the Riley Cycle Company, later the Riley Car Company, eventually swallowed up into the behemoth British Motor Corporation, where most traces of heritage were removed and the Riley brand attached to bizarre Mini variants and slightly souped-up versions of cooking saloons - much the same fate as befell MG, in fact.

The denouement finally came before Sir William Blackburne, sitting as a judge of the High Court, who basically had little to do but construe two agreements - one from 2005 whereby certain assets of MG were sold to NAC, and one dated 2007 whereby certain assets associated with MG Sports and Racing Limited (notice the difference between teh name of this company and the first defendant, a differnt company). The construction argued for by the defendants was so unlikely that he didn't seem to have much difficulty, and indeed he was assisted by the fact that because the 2007 agreement could not be read the way the defendants wanted it to be read, there was hardly any need to look at the earlier one at all.

The defendants' case was that they had taken the trade mark MG X POWER under the second agreement, notwithstanding that many other marks (including MG and the octagonal badge) had passed to NAC under the first one. There appears from the judgment to be a great deal of confusion about what went on in the defendant company (effectively under the control of Mr Riley): it certainly had some part-finished cars (of a new model, one that had been planned at the time of the demise of the Rover Group). But imagining one would be able to use a trade mark like that one, when the only distinctive elements in it happened to coincide with trade marks owned by someone else, represents the supreme triumph (to introduce another famous name from British automobile history) of hope over experience. At one stage Mr Riley told NAC that they seemed to have some control over his trade mark portfolio, and he over theirs, which is hard to reconcile with trade mark law as it is known on this planet.

There is little, if any, interesting law, but there is an interesting story in the case. there are also several significant lessons. Precision in contract drafting is always essential, and here (partly because of a fairly large portfolio of trade marks) it was somewhat lacking. The evidence showed that the defendants seemed intent on creating confusion about what was going on with the trade marks, believing that it would work to their advantage. The fact that the sales involved administrators and liquidators cannot have helped, though they appear to have been well-advised and clear about what they were doing. Maybe the great lesson from a reading of this judgment is that if your case is that several extremely strange things have happened in the course of a couple of transactions, things that no rational person would have allowed to take place, the judge is probably not going to come down in favour of your interpretation. It all makes a depressing read for anyone who loved the Brisih motor industry.

No comments:


blogger templates | Make Money Online