In Nanjing Automobile (Group) Corporation, Nanjing Automobile Corporation (UK) Ltd and MG Motor UK Ltd v MG Sports & Racing Europe Ltd and William James Riley  EWHC 270 (Ch), Sir William Blackburne (sitting as England and Wales High Court judge) decided in favour of Nanjing Automobile for registered trade mark infringement and passing off.
In July 2005, Nanjing entered into an agreement with MG Rover and through its administrator acquired most of MG Rover's assets and trade marks, including a large number of Community and UK trade marks consisting of the MG marks and the octagonal logo. It was agreed that very substantial goodwill and reputation subsisted in the marks in question.
In 2007, MG Sports and the second Defendant, (its majority shareholder and managing director) made and sold cars depicting the letters MG and MG X POWER. Nanjing sued for trade mark infringement and passing off, seeking injunctive relief and orders that MG Sports cease the use of the letters MG in its company name and domain name.
MG Sports’ defence was that it was entitled to use the mark pursuant to an agreement dated 27 June 2007 under which it acquired certain assets from MG Rover including the MG X POWER-branded business. MG Sports claimed that the MG X POWER UK and Community trade marks had not been assigned to Nanjing under the 2005 agreement, but had been assigned to MG Sports under the 2007 agreement. MG Sports counterclaimed for revocation of 32 MG registrations in Nanjing's name.
Sir William Blackbourne held in favour of Nanjing and granted an injunction to restrain MG Sports from passing off and from trade mark infringement. His view is summarised as follows:
- On the proper construction, the 2005 agreement transferred the right to the MG X POWER marks to Nanjing.
- The 2005 agreement has a very wide definition of “intellectual property” and hence all MG Rover's trade marks passed to Nanjing in 2005.
- Since Nanjing was the rightful owner of the MG marks, MG Sports could not have acquired them in 2007 from MG Rover as that company did not own them.
- The Court also found the second Defendant jointly liable with his company as his conduct in relation to MG Sport's activities, "went far beyond his purely constitutional role in the governance of the company".
- The revocation actions failed and MG Sports was ordered to change its name and to transfer to Nanjing any domain names comprising the MG mark.
- As MG Sports was never the registered proprietor of either the MG or the MG X POWER trade marks, it could not avail itself to the defence of "use of one's own trade mark" defence under the Trade Marks Act 1994, Section 11(1).