Intellectual Property Law Update - CrownBet loses legal wager over Sportingbet name to rival Sportsbet

Intellectual Property
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The Hon Peter Heerey, AM, QC, a former Judge of the Federal Court of Australia, discusses the recent Federal Court case of Sportsbet Pty Ltd v Crownbet Pty Ltd [2018] FCA 1045 where an interlocutory injunction was granted to restrain CrownBet from offering betting or wagering services using the name “Sportingbet”. 

The applicant has since 1999 marketed online betting services under the name SPORTSBET, first as part of a registered domain name and, since 2004, as the subject of a number of registered trade marks on sports and “a selection of general entertainment and political events” (presumably mutually exclusive activities).

From 2001 to 2015 the respondent used the SPORTINGBET brand and trade marks extensively in the course of its online wagering business.

In March 2013 the respondent was acquired by William Hill plc. In September of that year the respondent announced it was discontinuing the use of the SPORTINGBET brand because there was some confusion in the market between that brand and the rival SPORTSBET.

In January 2015 William Hill announced that customers would be moved from SPORTINGBET and certain other brands to the WILLIAM HILL brand. There was subsequently some limited use of the SPORTINGBET brand between February and  August 2016, but none since the latter date.

The present litigation arises from the proposal of the respondent to commence offering betting services under the name SPORTINGBET from the end of August 2018.

This proposal is a result of contractual obligations in the course of corporate ownership changes which require the respondent to cease using the names WILLIAM HILL and CROWNBET by, respectively, 26 August and 22 October 2018. So a new name will be needed. Hence the plan to resurrect the formerly used SPORTINGBET.

On 11 July 2018 Moshinsky J, upon the usual undertaking as to damages,  granted an interlocutory injunction against the use of the name SPORTINGBET by the respondent.

His Honour applied the well-established authorities on the grant of interlocutory injunctions and s 18 of the Australian Consumer Law. Particular features of the case are worth noting.

There was no cross-examination of substantial affidavit evidence from both sides. The only admissibility objection was to the report of a focus group prepared by an independent market research company. This was said to be inadmissible hearsay. His Honour held that the report was admissible on an interlocutory application. However, the respondent had argued that the report was prejudicial because the participants were not identified, nor were the questions put and the answers received. His Honour considered that for those reasons only limited weight could be given to the report (at [11]).

Prima facie case

The respondent pointed out that the SPORTSBET and SPORTINGBET brands had been used by trade rivals for some fourteen years (2001 to 2015). There was only limited evidence of confusion.

Further, both names were clearly descriptive of the business of the rivals, viz betting on sport. There was need to demonstrate the word had acquired a secondary meaning distinctive of the applicant’s business: Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216 at 229-230, Bohemia Crystal Pty Ltd v Host Corporation Pty Ltd (2018) 354 ALR 353 at [312].

The proposed use of SPORTINGBET would be in a different font and colour (purple v blue and yellow).

Nevertheless his Honour found not just a prima facie case, but a “strong” one (at [91], emphasis in original).

In doing so, his Honour relied particularly on an analysis of the nature of the online betting market, including the importance of new bettors being young unsophisticated adults, and often likely to make decisions in social groups, such as Grand Final and Melbourne Cup barbecues. (The present writer notes that TV betting advertisements often feature cheerful male groups in a social setting while anti-betting promotions show a miserable lonely figure looking at a laptop.)

Also mentioned by his Honour (at [92]) are the importance of word of mouth knowledge, and the very significant number of consumers who find their way through paid search engine advertisements or via organic searches of the App store. Many will use mobile devices where “the display scene is smaller, and differences will be less easy to distinguish”. (at [98])

His Honour noted (at [94]) that even now conducting a Google search for SPORTSBET results not only in the applicant’s website being presented but also sponsored links for the websites of two of its competitors: Ladbrokes and Bet365.

However, the comment might be made that all these hazards of the internet world existed throughout the fourteen years when the highly descriptive names SPORTSBET and SPORTINGBET were used by trade rivals, with very little solid evidence of confusion, still less of misleading of consumers, and certainly no recourse to litigation.

Perhaps related to this is, as his Honour noted (at[81]), “the SPORTINGBET brand has been out of use for some time, and... [has] nil value for goodwill in the accounts of [the applicant].”

Balance of Convenience

While this is of course the conventional title for the second step in the interlocutory injunction process, “convenience” is perhaps used in a somewhat technical sense, suggesting something more serious than “agreeable to the needs or purpose” (Macquarie). The concept might be better captured by enquiring as to the “lower risk of injustice”: Bradto Pty Ltd v Victoria (2006) 15 VR 65, [24]-[35].

His Honour accepted that if an interlocutory injunction were granted but the applicant failed at trial it would probably not be feasible for the respondent to rebrand a second time, and therefore they would “in a practical sense” have lost the opportunity to use SPORTINGBET. This made the degree of likelihood of success a relevant factor in balancing the risks. His Honour in that context therefore relied on his finding that a “strong” prima facie case had been made out. (at [107])

On the alternative scenario, his Honour said that if an injunction were refused but the applicant succeeded at trial there would be “enduring confusion in the marketplace”, loss of goodwill and damage which would be difficult to quantify. However, as already noted, his Honour had pointed out that the applicant had placed no value on such goodwill in its books.

Peter Heerey Headshot
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The Hon Peter Heerey AM QC is a former Judge of the Federal Court of Australia

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