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”.
Keywords: Trade marks – misleading and deceptive conduct – interlocutory injunction – user of “SPORTSBET” seeks restraint on use of “SPORTINGBET” – characteristics of online betting market – admissibility of focus group report – prima facie case – previous co-existence of rival names – balance of convenience – need to find new name
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.
The Hon Peter Heerey, AM, QC, is a former Judge of the Federal Court of Australia. Mr Heerey graduated with degrees in Law (First Class Honours) and Arts from the University of Tasmania. After four years as a solicitor he commenced practice at the Victorian Bar in 1967. He was appointed Queen’s Counsel in 1985 and a Judge of the Federal Court of Australia in 1990. He served on the Court until retirement in 2009. On the Court his work at both trial and appellate level involved commercial law (intellectual property, competition law, corporate and contractual disputes) and public law (judicial review of administrative decisions, taxation etc).
While on the Court he also served as President of the Defence Force Discipline Appeal Tribunal, a panel of Federal Court and State and Territory Supreme Court Judges which hears appeals from Courts Martial and Defence Force Magistrates and as Deputy President of the Australian Competition Tribunal. Since retirement from the Court he has returned to the Victorian Bar practising in advice, arbitration and mediation.
In 2015, Mr Heerey was appointed by the Federal Minister for Employment to enquire into and report whether there was a reasonable basis for both Houses of Parliament to consider requesting the Governor-General to remove a Vice-President of the Fair Work Commission on the grounds of proved misbehaviour and incapacity. After provision of Mr Heerey’s report to the Minister, the Vice-President resigned.
Also since retirement Mr Heerey has served a term as Chair of the Australian Electoral Commission, the body responsible for the conduct of Federal elections in Australia. Mr Heerey chairs the Advisory Board for the Graduate Program in Intellectual Property at the University of Melbourne and is a member of the Advisory Board for the Competition Law Program at the University. He is an Adjunct Professor at the University of Tasmania.
Mr Heerey has published papers in Australian and Overseas professional and academic journals in the areas of corporations law, defamation, expert evidence, intellectual property, law and literature and Federation history and a collection Excursions in the Law (Federation Press, 2014) and an autobiography Can You See the Mountain? (Hybrid Publishers, 2017). In 2012 Mr Heerey was appointed a Member in the General Division of the Order of Australia (AM). He is a Fellow of the Australian Academy of Law. Contact Mr Heerey at pheerey@vicbar.com.au