Prima facie case
84 The principles applicable to ss 18 and 29(1) of the Australian Consumer Law are well established. For present purposes, it is sufficient to focus on s 18. Conduct will be misleading or deceptive if it has a tendency to lead into error: Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640 at 651. It is not sufficient that conduct is likely to produce confusion: Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 at 210. Whether particular conduct is misleading or deceptive is a question of fact to be determined in the context of the evidence of the alleged conduct and the relevant surrounding facts and circumstances: Parkdale at 198-199.
85 It is necessary to consider the effect of the conduct or representations upon ordinary and reasonable members of the relevant class: see Campomar Sociedad, Limitada v Nike International Ltd (2000) 202 CLR 45 at [102]-[103]; Google Inc v Australian Competition and Consumer Commission (2013) 249 CLR 435 at [7]. The "reasonable members" of a class include the inexperienced as well as the experienced, and the gullible as well as the astute: Shape Shopfitters Pty Ltd v Shape Australia Pty Ltd (No 3) [2017] FCA 865 at [102]. The question is whether a not insignificant number within the class have been misled or deceived or are likely to be misled or deceived: Shape Shopfitters at [102].
86 In TPG Internet, it was said at [50] that a contravention may occur, not only when a contract has been concluded under the influence of a misleading advertisement, but also at the point where members of the relevant class have been enticed into "the marketing web" by an erroneous belief engendered by an advertiser.
87 In Bohemia Crystal Pty Ltd v Host Corporation Pty Ltd (2018) 354 ALR 353 at [312], Burley J said:
In the case of a descriptive or generic word, for an applicant to make good an allegation of affiliation it may need to demonstrate that the word has acquired a secondary meaning and become distinctive of the applicant's business. Whether a secondary meaning exists is a question of fact to be determined having regard to all the relevant contextual circumstances. It may be difficult to establish that a descriptive name (or, in the present case, an apt geographical name), as opposed to a concocted or invented name, has become distinctive of the applicant's business; Hornsby at 229-30; ALR 647-8.
See also REA Group Ltd v Real Estate 1 Ltd (2013) 217 FCR 327 at [116]-[118], [121]-[122].
88 In the present case, there is no real dispute as to identification of the relevant class. The class consists of consumers who wager in relation to events including sporting events, or who may in the future do so, in Australia. This class includes a significant cross-section of the public. Importantly, it includes many people who are new to betting, and many people who are young adults and only started betting in recent years.
89 The evidence establishes that the SPORTSBET mark is distinctive of Sportsbet's business and offering, notwithstanding its descriptive aspect. There is very high brand recognition of SPORTSBET. I infer that brand recognition of SPORTSBET has increased markedly in the last three years, as a result of the substantially increased marketing expenditure during this period.
90 In considering the effect of the proposed conduct upon ordinary and reasonable members of this class, it is important to have regard to the context in which the proposed conduct would occur. Thus it is important to have regard to the market in which Sportsbet and the respondents are operating, and the way in which online betting transactions take place. These have been described above.
91 Having regard to this context, and the similarity between SPORTSBET and SPORTINGBET, I consider that Sportsbet has made out a prima facie case (in the sense explained in Beecham at 622-623) that, if the respondents were to commence trading using a SPORTINGBET trade mark, then a substantial number of bettors would be likely to be led into error, in that they would be likely to access the respondents' platform and join and place bets with the respondents rather than with Sportsbet in error, or be likely to assume a trade association between SPORTINGBET and Sportsbet. Moreover, I consider Sportsbet to have made out a strong prima facie case.
92 In reaching the above conclusion, I have had regard, in particular, to the following aspects of the context and the way in which online transactions take place: the large number of consumers who gamble on events, including sporting events, using a website or a mobile-based app; those consumers will range across a spectrum from highly informed frequent gamblers to infrequent uninformed gamblers; every year, a significant number of consumers commence gambling on an online or mobile-based platform for the first time - this includes those who have recently turned 18 and have become lawfully able to bet, as well as older people who have developed an interest in online betting; the evidence indicates that the most significant reasons that new customers choose a provider of wagering services are because it is a well-known brand and because of word of mouth - these factors are unsurprising since the nature of the service is one requiring a significant level of trust; very significant proportions of consumers find their way to the Sportsbet app or website via organic searches of the App store, through paid search engine advertisements and through organic internet search results; the majority of customers visit the Sportsbet website and place bets using a mobile device; the interactions with Sportsbet (and, it may be inferred, other wagering providers) can often be quite spontaneous in nature; and a new bettor is able to sign up within only a couple of minutes and will often place their first bet soon after registration.
93 The type of error discussed above is likely to occur in a number of different scenarios. For example, there will likely be customers who, in seeking to rely on a word-of-mouth recommendation to use Sportsbet's services, confuse SPORTSBET with SPORTINGBET and, as a result, either search for SPORTINGBET, or use that name as the URL that they enter to access the website.
94 It can be seen from the evidence that even conducting a Google search for the term SPORTSBET results in, not only the Sportsbet website being presented as a sponsored link, but also sponsored links for the websites for two of its competitors, Ladbrokes and Bet365. It can be expected that a SPORTINGBET link might similarly appear in those results if the respondents are not restrained, both:
(a) as an organic result (given the use of SPORT and BET in SPORTINGBET and the ability of the respondents to optimize their platform for organic searching); and
(b) as a paid result (given the ability for the respondents to pay for their platform to be returned as a paid result on searches for SPORTSBET).
95 It is likely that some consumers will select that link, thinking they are selecting Sportsbet's business or a business associated with Sportsbet and instead access the respondents' platform.
96 There will likely be customers who conduct an internet search using a search term such as "AFL + betting" and who will be presented with either a sponsored search result, or an organic search result, for the respondents' SPORTINGBET website, and who will select that website because they mistakenly think it is the website of the Sportsbet business that they have had recommended to them, or that they have otherwise heard of, or that it is the website of an associated company.
97 There will likely be customers who search for an app on the App store who are presented with either a sponsored or an organic search result for the SPORTINGBET app, and who will select that app because they mistakenly think it is the app for the Sportsbet business that they have had recommended to them, or that they have otherwise heard of, or again mistakenly assume has a commercial association.
98 The likelihood of consumers being led into error will be even higher for those who access betting services through mobile devices, whether apps or mobile websites, where the display screen is smaller, and differences will be less easy to distinguish. As referred to earlier, a very significant number of consumers access betting services through mobile devices.
99 The likelihood of consumers being led into error will also be enhanced for those who decide to place a bet in a busier, more distracting environment, such as a social setting, or among a crowd at a significant racing or sporting event. I infer from the large proportion of users who place bets using mobile devices, and from the large proportion of users who place bets during major sporting events that are often enjoyed as social occasions (such as the Australian Football League Grand Final and Melbourne Cup) that a significant number of consumers fall into this category.
100 The respondents submit that: CrownBet's predecessor used the SPORTINGBET trade mark extensively in Australia for a period of at least 13 years up until at least as late as August 2016 (albeit less extensively in the period from February 2015 to August 2016), in competition with Sportsbet for at least 11 of those 13 years, with no complaint from Sportsbet and little evidence of any confusion on the part of consumers between the Sportsbet and Sportingbet products; this concurrent use of the SPORTINGBET and SPORTSBET marks occurred in the context of the clear descriptive nature of the marks and in an environment where other players used similar marks, such as TAB Sportsbet and sportsbetting.com.au, to offer similar services; this suggests that any risk of confusion by reason of CrownBet reinvigorating the SPORTINGBET mark is low because consumers are astute to notice the difference between such essentially descriptive marks.
101 I do not accept these submissions. First, the present circumstances are materially different from those that existed prior to February 2015. In particular, as indicated earlier, I infer that brand recognition of SPORTSBET has increased markedly during the last three years, as a result of the substantially increased marketing expenditure. In these circumstances, I consider there to be a significantly greater prospect of consumers falling into error. Secondly, although the evidence of confusion in relation to the pre-February 2015 period may be limited, there is evidence of some confusion. One notable example in the evidence was the Northern Territory Revenue Office mistaking Sportsbet and Sportingbet - it thought that Sportsbet had made a payment twice, when in fact one payment was from Sportingbet. There may well have been confusion during that period, even though the evidence is, at present, limited. Thirdly, I do not accept that consumers would be "astute to notice the difference between such essentially descriptive marks". While it is true that in some contexts, a small difference in a descriptive mark may be sufficient to differentiate it from another product or service, it all depends on the context. In the present context, I consider that it would be quite easy for consumers to mistake SPORTINGBET for SPORTSBET, notwithstanding the descriptive aspect.
102 The respondents submit that the factual matrix means that there is no significant risk of consumers being in any doubt at all that services offered under the SPORTINGBET trade mark will be provided by a different entity to that which provides services under the SPORTSBET trade mark. The respondents rely on the following matters:
(a) the level of sophistication of consumers of sports betting services;
(b) the prominent distinctive features of CrownBet's proposed get up (especially its prominent use of the colour purple and more subtle use of aqua for the letter 'O' as well as font styles);
(c) CrownBet's proposed brand positioning in the premium/sophisticated sector of the market;
(d) CrownBet's proposed extensive marketing campaign to educate consumers that SPORTINGBET is the new brand for CrownBet and William Hill Australia which will include the use of longstanding ambassadors of the CrownBet brand; and
(e) the information conveyed to consumers when they sign up to use CrownBet's services for the first time, or when they are migrated across to the SPORTINGBET branded products, and when they place bets,
103 I do not accept these submissions. I do not consider the matters referred to by the respondents to be sufficient, whether considered individually or together, to avoid the likelihood of error. The respondents rely on the level of sophistication of consumers of sports betting services. While this is undoubtedly true of some, perhaps many, there are also many who are unsophisticated. The evidence demonstrates that there are many new bettors, many of whom, it may be inferred, are unsophisticated. The respondents emphasise the features of the CROWNBET get up, in particular, the colour purple. I do not consider that this overcomes the risk of error. While some, perhaps many, consumers may be familiar with the colour scheme of CROWNBET, and some, perhaps many, consumers may be familiar with the blue and yellow colour scheme of SPORTSBET, there are likely to be many other consumers who are not. They may have heard the name SPORTSBET and not seen the colour scheme. Or they may have seen the colour scheme and forgotten it by the time they decide to register and place a bet. In any event, I do not accept that the colour scheme and other features of the CROWNBET get up, assuming they would be adopted, would address the likelihood of error. The respondents rely on their proposed premium brand positioning. It is doubtful that this will be enough to avoid the sorts of errors I have described earlier. The respondents rely on their proposed extensive marketing campaign. The details of this are not yet finalised. Further, while the campaign will reach some, perhaps many consumers, there will still be many who it does not reach or for whom it is not effective to avoid error. Insofar as the respondents rely on the information conveyed to consumers when they sign up for the first time, it is difficult to see how this would alert a consumer who has mistaken SPORTINGBET for SPORTSBET to his or her error. In any event, this does not gainsay that the consumer has been misled, albeit that they realise the error before contracting.
104 The respondents in oral submissions sought to use Sportsbet's extensive marketing campaigns and budget to the advantage of the respondents, by contending that there is a high level of awareness of the distinctive get up of the SPORTSBET brand, including the blue and yellow colour scheme. For the reasons given earlier, I do not accept this submission. While some, perhaps many, consumers may be familiar with the SPORTSBET get up, there are likely to be many other consumers who are not.