Rising (and falling) from the steam – phoenix company liable for trade mark infringement

5th April 2024

Case Note: Steam Vac Cleaning Systems Pty Ltd v SV Equipment Pty Ltd [2024] FCA 68

Background

Steam Vac Cleansing Systems Pty Ltd (SVCS) owns a business that manufactures, sells, markets and distributes carpet cleaning equipment and apparatus in Australia. SVCS is the registered owner of 7 trade marks in connection with carpet cleaning machines and related goods, namely HP APOLLO, HP APOLLO, RD6, RD5, Vapourtech, SIZZLER and a Kangaroo logo (SVCS Marks).

SVCS alleged that the first and second respondents had, and the third respondent continued to, market and sell steam cleaning equipment using marks were substantially identical with, or deceptively similar to the SVCS Marks, namely Steamvac Apollo HP, Steamvac Apollo, Steamvac Avenger HP, Steamvac Avenger, Steamvac RD6, Steamvac RD5, Steamvac SV 220 Sizzler, Steamvac Sizzler, Steamvac VapourTech, Steamvac Apollo HP+, Steamvac RD6 Portable, Steamvac Apollo Portable as well as a caricature of a kangaroo wearing sunglasses which bore many of the elements of SVCS’ Kangaroo logo.

Proceedings were initially commenced in the Federal Court of Australia against the first and second respondents, which were placed into liquidation and deregistered respectively. The proceeding remained on foot against the third respondent, Steamvac Australia Pty Ltd (SVA). The evidence showed that the first respondent had ceased trading in or around April 2022 and SVA was incorporated on 12 April 2022. According to the liquidator, SVA may have been involved in potential phoenix activity as it had been utilising the premises and assets of the first respondent to operate a similar business for no consideration.

The three respondents, which were affiliated with the family of one individual (a Mr Mark Warren), filed cross-claims seeking cancellation of the SVCS Marks on the basis of invalidity.

The respondents did not appear at the final hearing. The matter proceeded with the SVCS’ claims undefended and the cross claims not prosecuted.

Was SVA liable for trade mark infringement?

Justice Wheelahan found that SVA was liable for trade mark infringement.

Pointing to various webpages from the websites <svequipment.com> and <steamvac.com.au> as well as copies of SVA customer invoices referencing various models of carpet cleaning machines, His Honour was satisfied that SVA had:

• since its incorporation, conducted, and continued to conduct, essentially the same business as was conducted by the first respondent, i.e. one involving the marketing and sale of steam cleaning equipment; and
• used as trade marks signs that were substantially identical with, or deceptively similar to, each of the SVCS Marks in relation to goods in respect of which the marks were registered.

His Honour made orders for an injunction to restrain SVA from infringing the SVCS Marks as well as delivery up of goods in SVA’s possession, power, custody or control to which the infringing marks were affixed (or otherwise, the obliteration of such marks).

The respondents’ cross-claims were dismissed

Conclusion

Despite the unusual set of circumstances, this case highlights that trade marks can be enforced against a party using the similar marks even where they have engaged in restructuring activity in a bid to avoid liability.