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ip @ ashurst 09 Oct 2018 Odds favour Sportsbet in interlocutory injunction over CrownBet's relaunch of SPORTINGBET brand

Sportsbet Pty Ltd v Crownbet Pty Ltd [2018] FCA 1045

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 What you need to know

  • In June 2018, CrownBet Pty Ltd (CrownBet) announced that it would be adopting the brand name SPORTINGBET, a name used previously by a subsidiary of CrownBet. This announcement was the result of a transaction which prevented CrownBet from using its CROWNBET name going forward.
  • On 21 June 2018, Sportsbet Pty Ltd (Sportsbet) sought an application for an interlocutory injunction to restrain CrownBet from offering betting or wagering services using the name SPORTINGBET. In July 2018, the Federal Court granted an interlocutory injunction in favour of Sportsbet.
  • Although the SPORTSBET and SPORTINGBET names had co-existed in the past, in the period since use of the SPORTINGBET name was discontinued, Sportsbet invested significantly in its brand awareness. As a result, it was found that a substantial number of bettors would likely be led into error by the two names, or be likely to assume a trade association between the parties.

What you need to do

  • If wishing to reintroduce a brand name or trade mark into the market, consider if there are any new traders or established traders that may have developed a similar brand name in that time.
  • A significant investment in advertising can increase brand awareness, even within a short period of time such as 2 to 3 years.
  • If reintroducing a brand name, consider the relevant customers and the growth of the market. If a large number of customers are new to the industry, it is likely that they may not be aware of brands that were used in the past.
  • If customers learn of a brand through word of mouth recommendations, chances of confusion between similar brand names is more likely when searching for these brand names.

Background

CrownBet

CrownBet, formerly BetEasy Pty Ltd, was sold by Crown Resorts Ltd in December 2017. In March 2018, CrownBet acquired William Hill Australia Holdings Pty Ltd (William Hill), which is the owner of a number of other wagering operators, including Sportingbet Australia Holdings Pty Ltd (Sportingbet Australia). As a result, CrownBet acquired a number of trade marks for SPORTINGBET. 

Through these transactions, CrownBet became the third largest online wagering operator in Australia. However, the terms of the sale of CrownBet and purchase of William Hill included that CrownBet was no longer permitted to use the CROWNBET or WILLIAM HILL brands in connection with its services.

Consequently, in June 2018, CrownBet announced that it would adopt the brand name SPORTINGBET for its business, which was used by Sportingbet Australia from 2002 to 2015. The SPORTINGBET brand achieved significant recognition during this time, however when acquired by William Hill, the SPORTINGBET brand was largely discontinued from around April 2015, and had not been used since August 2016. 

Sportsbet

Sportsbet is one of the largest online wagering operators in Australia. It is the owner of six registered Australian trade marks containing the word SPORTSBET, and operates its website at www.sportsbet.com.au. Sportsbet offers its betting services online through its website, its mobile App, and also by telephone. 

When certain regulatory restrictions were lifted in 2008, Sportsbet began promoting the SPORTSBET brand extensively throughout Australia, including online, television, print, radio, social media and sponsorship arrangements. Its marketing expenditure was substantial, and significantly, since March 2015, Sportsbet increased its marketing expenditure, partly due to the fact that the SPORTINGBET brand was no longer being used in Australia. Sportsbet was able to demonstrate that consumer engagement with its social media pages had increased over the last 5 years, and that its reputation was considerable. This included results of a survey that showed Sportsbet has the highest unprompted "top of mind awareness" in the online wagering or betting market amongst current bettors.

The online betting market

The evidence in the case of the online betting market demonstrated that there was a significant and large number of new bettors who had joined the market since January 2015. These numbers were so large that the "new bettors" population was a substantial portion of the overall active betting marketing in those years. Significantly, the evidence showed that a major proportion of the new bettors were young adults aged between 18 and 24 years. In addition, a substantial percentage of Sportsbet's new online customers were also in this age bracket. 

The evidence also demonstrated that customers chose Sportsbet based on word of mouth recommendations, and accessed Sportsbet via a mobile device (either through the App or mobile website). The evidence showed that this was because bettors are often betting in a group environment, and on special racing or sporting event days. This was important evidence because it came to show that there was an increased chance of confusion by customers who were undertaking searches for "Sportsbet" in a group environment on their phone.

Findings

The Court held that Sportsbet had established a strong prima facie case to grant an injunction. The Court found that there was a high brand recognition of the SPORTSBET name, and that this had increased markedly in the last 3 years as a result of substantially increased marketing expenditure. The Court held that a substantial number of bettors would be likely to be led into error that CrownBet's services were Sportsbet's services, or that there was a trade association between SPORTINGBET and SPORTSBET. 

These findings were based on a number of aspects of the online betting market, including that the online wagering business has grown significantly in recent years. In addition, many interactions with the Sportbet services are spontaneous and undertaken on mobile devices, meaning customers are less focused when undertaking this search, increasing the chances that customers would be confused by a company of a similar name.  

The Court considered the evidence submitted by CrownBet that the SPORTINGBET trade mark had been used extensively in Australia previously, including for 11 years during which it was in competition with Sportsbet, yet there was little evidence of any confusion between the brands. However, the Court considered that the current circumstances were materially different from those that existed prior to 2015, including that Sportsbet had significantly increased the brand awareness of its SPORTSBET name. 

The Court weighed up both parties' positions should an interlocutory injunction be granted or not. On the balance of convenience, the Court granted an interlocutory injunction due to the damage that would be caused to Sportsbet, which would be difficult to quantify, and also that there would be impact on consumers who would be confused by the similar brand names in the marketplace.

Outcome

As CrownBet was restrained from adopting the SPORTINGBET name, at the date of publication CrownBet announced it was adopting the brand name BETEASY, one of its previous brand names which was discontinued in 2015. 

 

Authors: Peter Chalk, Partner; and Hannah Rumble, Lawyer

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