FEDERAL COURT OF AUSTRALIA Sportsbet Pty Ltd v Crownbet Pty Ltd [2018] FCA 1045 File number: VID 744 of 2018 Judge: MOSHINSKY J Date of judgment: 11 July 2018 Catchwords: PRACTICE AND PROCEDURE – application for interlocutory injunction – where applicant offered betting services to Australian consumers under the name SPORTSBET – where respondents proposed to commence offering betting services under the name SPORTINGBET – where applicant alleged that the respondents' proposed conduct would contravene s 18 of the Australian Consumer Law – whether applicant had made out a prima facie case – whether balance of convenience favoured the grant of an injunction – interlocutory injunction granted Legislation: Competition and Consumer Act 2010 (Cth), Sch 2, Australian Consumer Law, ss 18, 29 Evidence Act 1995 (Cth), s 135 Racing and Betting Act 1983 (NT) Cases cited: Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57 Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640 Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618 Bohemia Crystal Pty Ltd v Host Corporation Pty Ltd (2018) 354 ALR 353 Campomar Sociedad, Limitada v Nike International Ltd (2000) 202 CLR 45 Google Inc v Australian Competition and Consumer Commission (2013) 249 CLR 435 NWL Ltd v Woods [1979] 1 WLR 1294 Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 REA Group Ltd v Real Estate 1 Ltd (2013) 217 FCR 327 Samsung Electronics Company Ltd v Apple Inc (2011) 217 FCR 238 Shape Shopfitters Pty Ltd v Shape Australia Pty Ltd (No 3) [2017] FCA 865 Taco Company of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 Date of hearing: 9 July 2018 Registry: Victoria Division: General Division National Practice Area: Intellectual Property Sub-area: Trade Marks Category: Catchwords Number of paragraphs: 117 Counsel for the Applicant: Mr CD Golvan AM QC with Mr CH Smith and Ms CI Cunliffe Solicitor for the Applicant: Corrs Chambers Westgarth Counsel for the Respondents: Mr A Ryan SC with Mr PH Wallis Solicitor for the Respondents: Arnold Bloch Leibler ORDERS VID 744 of 2018 BETWEEN: SPORTSBET PTY LTD Applicant AND: CROWNBET PTY LTD First Respondent TSG AUSTRALIA WAGERING PTY LTD Second Respondent JUDGE: MOSHINSKY J DATE OF ORDER: 11 JULY 2018 UPON the applicant and Paddy Power Australia Pty Ltd, by the applicant's counsel, undertaking to submit to such order (if any) as the Court may consider to be just for the payment of compensation, to be assessed by the Court as it may direct, to any person, whether or not a party, adversely affected by the grant of the interlocutory relief, THE COURT ORDERS THAT: 1. Pending the determination of the proceeding or further order, the respondents and each of them whether by themselves, their directors, officers, employees or agents or otherwise howsoever, be restrained from offering betting or wagering services using the name SPORTINGBET. 2. Each party's costs of the application for interlocutory injunctive relief be its costs in the cause. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT MOSHINSKY J: Introduction 1 The applicant, Sportsbet Pty Ltd (Sportsbet), offers betting services to Australian consumers under the name SPORTSBET. The overwhelming majority of Sportsbet's revenue is generated through online betting. Sportsbet offers betting services across all three racing codes (thoroughbred, harness and greyhound racing), a wide variety of sports (including Australian Football League, rugby, basketball and soccer) and a selection of general entertainment and political events, such as the outcome of reality television programs and elections. Sportsbet is the largest non-retail corporate bookmaker in Australia. In the years since 2012, and particularly in the years 2015 to 2017, it has spent very large sums each year on advertising. The evidence demonstrates that it has very high level of brand recognition. Sportsbet is the registered owner of a number of trade marks for the word SPORTSBET. 2 The first respondent, CrownBet Pty Ltd (CrownBet) also offers betting services to Australian consumers. It offers such services under the name CROWNBET. The second respondent, TSG Australia Wagering Pty Ltd (TSG Australia), is a wholly owned subsidiary of CrownBet. 3 CrownBet proposes to commence offering betting services under the name SPORTINGBET at the end of August 2018. In brief terms, the background to this is as follows. In December 2017, it was announced that Crown Resorts Ltd had entered into an agreement to sell its 62 per cent interest in CrownBet. As part of the sale arrangements, CrownBet must cease using the CROWNBET brand on or before 26 August 2018. In March 2018, CrownBet acquired William Hill Australia Holdings Pty Ltd (William Hill Australia), which offers betting services to Australian consumers under the name WILLIAM HILL. Under the sale arrangements, Crownbet must cease using the WILLIAM HILL brand by 22 October 2018. CrownBet needs, therefore, to replace both the CROWNBET name and the WILLIAM HILL name in the very near future. 4 As part of the acquisition of William Hill Australia, CrownBet acquired a number of trade marks, including for the word SPORTINGBET and two other similar trade marks. While this name had been used extensively prior to February 2015, at about that time William Hill Australia rebranded its SPORTINGBET offering as WILLIAM HILL. 5 In these circumstances, CrownBet proposes to replace both the CROWNBET name and the WILLIAM HILL name with SPORTINGBET from the end of August 2018. CrownBet's proposal became publicly known in early to mid-June 2018. 6 On 21 June 2018, Sportsbet commenced this proceeding. By its originating application, Sportsbet seeks both final and interlocutory relief. In its statement of claim, Sportsbet alleges that the respondents are threatening to engage in conduct in the course of trade or commerce in Australia that is misleading or deceptive, or that is likely to mislead or deceive, in contravention of s 18 of the Australian Consumer Law, being Sch 2 to the Competition and Consumer Act 2010 (Cth). Sportsbet also contends that the respondents are threatening to engage in conduct that would contravene s 29(1) of the Australian Consumer Law, which deals with false or misleading representations about goods or services. Further, Sportsbet alleges that the respondents are threatening to infringe Sportsbet's trade marks. 7 Pursuant to orders made by the docket judge, Sportsbet's application for an interlocutory injunction came on for hearing before me, as duty judge, on 9 July 2018. Sportsbet seeks an order that, pending the determination of the proceeding or further order, the respondents and each of them whether by themselves, their directors, officers, employees or agents or otherwise howsoever, be restrained from offering betting or wagering services using the name SPORTINGBET. For the purposes of the application for an interlocutory injunction, Sportsbet relies solely on its causes of action under the Australian Consumer Law. An undertaking as to damages has been proffered, both by Sportsbet and its parent, Paddy Power Australia Pty Ltd. There is no question as to the ability of these companies to satisfy the undertaking. 8 For the reasons that follow, I consider it appropriate to grant an interlocutory injunction substantially in the terms sought by Sportsbet. Applicable principles 9 The principles applicable to interlocutory injunctive relief are well established. When considering an application for an interlocutory injunction, the Court must address itself to two main inquiries, namely whether the applicant for relief has made out a prima facie case, in the sense explained in Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618 at 622-623, and whether the balance of convenience favours the grant of an injunction or the refusal of relief. The requirement of a "prima facie" case does not mean that the plaintiff must show that it is more probable than not that at trial the plaintiff will succeed; it is sufficient for the plaintiff to show a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial: Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57 at [65]. How strong the probability needs to be depends upon the nature of the rights the plaintiff asserts and the practical consequences likely to flow from the order the plaintiff seeks: Beecham at 622. In Samsung Electronics Company Ltd v Apple Inc (2011) 217 FCR 238, the Full Court of this Court said (at [67]): "The question of whether there is a serious question or prima facie case should not be considered in isolation from the balance of convenience. The apparent strength of the parties' substantive cases will often be an important consideration to be weighed in the balance". At [73] of Samsung, the Full Court quoted with apparent approval from NWL Ltd v Woods [1979] 1 WLR 1294 at 1307, where Lord Diplock said that "[w]here ... the grant or refusal of the interlocutory injunction will have the practical effect of putting an end to the action …, the degree of likelihood that the plaintiff would have succeeded in establishing his right to an injunction if the action had gone to trial is a factor to be brought into the balance by the judge in weighing the risks that injustice may result from his deciding the application one way rather than the other". See also Samsung at [74] and [87]. Evidence 10 Sportsbet relies on the following affidavits: an affidavit of David Fixler (a solicitor) dated 21 June 2018; an affidavit of Barnaby Evans (the Chief Executive Officer of Sportsbet) dated 29 June 2018; and an affidavit of Nathan Arundell (the Chief Financial Officer of Sportsbet) dated 5 July 2018. The respondents rely on an affidavit of Nicholas Tyshing (the Chief Operating Officer of CrownBet) dated 3 July 2018. There was no cross-examination. The affidavits contain some material that is commercially confidential. I will avoid referring to the confidential material in the reasons that follow, so as to facilitate public access to these reasons, but I note that I have had regard to the confidential material in my consideration of the issues. 11 There was one objection to the affidavit material, namely an objection by the respondents to [86] of the Evans affidavit and the annexure referred to therein. I indicated that I would rule on the objection at the time when I gave judgment. Paragraph [86] of the Evans affidavit deals with a focus group report prepared in 2012 for Sportsbet by an independent market research company, Cognition. The annexure referred to in [86] is a copy of the report. This material is objected to on the basis that it is hearsay and on the basis of s 135 of the Evidence Act 1995 (Cth). In particular, it is submitted that the material is unfairly prejudicial because the participants in the focus groups are not identified, the questions put to those participants are not identified and the answers are not identified. It is therefore said that there is no way of understanding the statements that are made in the document. Insofar as the objection is based on the material being hearsay, such material is admissible on an interlocutory application. Insofar as the objection is based on s 135 of the Evidence Act, the materials relied upon on both sides contain much other market research material. Some of that other material, including that relied upon by the respondents, is of a similar character to the focus group report. I am not satisfied that the material should be excluded under s 135. However, I consider that only limited weight can be given to this document, for the reasons advanced on behalf of the respondents. 12 In addition to the affidavits a small number of documents were tendered. Background facts Sportsbet 13 Sportsbet is licensed as a corporate bookmaker in the Northern Territory under the Racing and Betting Act 1983 (NT). Sportsbet offers betting services online through its website www.sportsbet.com.au and its mobile app (on iOS and Android) as well as by telephone. The overwhelming majority of Sportsbet's revenue is generated through online betting. Sportsbet does not offer retail outlet or on-course services (on-course services being services offered at racing or sporting events). 14 Sportsbet offers betting services across: (a) all three racing codes (thoroughbred, harness and greyhound); (b) a wide variety of sports (including Australian Football League, rugby, basketball and soccer); and (c) a selection of general entertainment and political events, such as the outcome of reality television programs and elections. 15 The types of wagering products offered by Sportsbet are described in the Evans affidavit at [21]-[23]. Sportsbet offers a range of special offers and features as described in [24] of the Evans affidavit. Sportsbet also offers live streaming of all Victorian and South Australian thoroughbred racing, through its website and mobile app platforms. 16 Although the name SPORTSBET can be traced back to 1991, it is sufficient for present purposes to start in 1999. In that year, Sportsbet (at the time, named Consolidated Sportsbet Pty Limited) registered the domain name www.sportsbet.com.au. 17 In October 2003, Sportsbet started to offer its services online via a website at the URL www.sportsbet.com.au (previously, the website had only been used to promote Sportbet's services). 18 In March 2004, Betcorp Limited, the ultimate owner of the business, applied to register the SPORTSBET.COM.AU trade mark. In August 2004, Betcorp applied to register the SPORTSBET trade mark. These trade mark applications were later assigned to Sportsbet. 19 In May 2009, Paddy Power plc acquired a 51 per cent stake in Sportsbet. Paddy Power plc subsequently acquired all the shares in Sportsbet. In May 2011, Paddy Power transferred the shares in Sportsbet to Paddy Power Australia Pty Ltd, which is now the owner of Sportsbet. Paddy Power and Betfair plc merged in January 2016. Sportsbet's ultimate parent is Paddy Power Betfair plc, a publicly listed company registered in Ireland. 20 Sportsbet is currently the owner of six registered Australian trade marks containing the word SPORTSBET. 21 The number of customers who bet with Sportsbet is very large. The figure for the 2017 year, which is confidential, is set out at [119] of the Evans affidavit. CrownBet 22 CrownBet is a licensed online and telephone based wagering bookmaker operating in Australia. CrownBet is licensed by the Northern Territory Racing Commission under the Racing and Betting Act 1983 (NT) to provide those services. 23 CrownBet was previously known as WG Technologies Pty Ltd. In March 2014, WG Technologies Pty Ltd purchased the assets of a wagering business trading as "Betezy" (www.betezy.com.au). Shortly thereafter, WG Technologies Pty Ltd was renamed "BetEasy Pty Ltd" and commenced using the Betezy domain name and operating under the Betezy brand. 24 In September 2014, the business was rebranded as "BetEasy". 25 In March 2015, following the purchase by Crown Resorts Ltd of a majority shareholding in BetEasy, the company was renamed "CrownBet Pty Ltd" and the BetEasy business was rebranded "CrownBet". 26 CrownBet only operates through online (digital) and telephone channels. CrownBet's licence does not permit it to conduct a totalisator or a betting exchange or retail, cash-based wagering. 27 Most of CrownBet's revenue is from wagering on racing, which includes the three racing codes (thoroughbred, harness and greyhound racing). CrownBet also offers wagering on a variety of sports, for example, Australian Football League, cricket and golf, and, to a lesser extent, wagering on general entertainment events, for example, who will win a particular award) and political events (for example, the outcome of an election). 28 All of CrownBet's branding and logos have, since first introduced in March 2015, used the colour purple to distinguish CrownBet's online wagering services from the rest of the market. This has been a deliberate strategy of CrownBet for the purpose of associating the colour purple with CrownBet's services in the minds of consumers to distinguish those services from other service providers. The CrownBet logo and the colour purple are used prominently on its advertising and marketing, as well as on the CrownBet mobile application and website, for that purpose. (In contrast, Sportsbet used the colours blue and yellow.) 29 As a result of the acquisition of William Hill Australia, CrownBet became the ultimate holding company of: (a) Sportingbet Australia Holdings Pty Ltd and its subsidiaries including Sportingbet Australia Pty Ltd (Sportingbet); (b) William Hill Australia, the registered owner of the domain names "sportingbet.com.au" and "sportingbetaustralia.com.au"; and (c) TSG Australia (formerly William Hill Australia Wagering Pty Ltd), the registered owner of three trade marks for SPORTINGBET. 30 The combined CrownBet and William Hill Australia entity is the third largest online wagering operator in Australia, behind only Sportsbet and TAB/Tabcorp Holding Limited (Tabcorp). Sportingbet 31 Sportingbet started offering online wagering to customers in the Australian market under the SPORTINGBET brand in about 2001. It was one of the largest online wagering operators in Australia until it was merged into the William Hill Australia business in 2015. 32 In around 2011, Sportingbet acquired Centrebet, but continued to operate the two businesses as separate wagering brands. Sportingbet and Centrebet were eventually acquired by William Hill plc in around 2013, together with the Tom Waterhouse business. 33 During the period from 2002 to 2015, Sportingbet Australia used the SPORTINGBET brand and trade marks extensively in relation to its business including: (a) on its online wagering platform (www.sportingbet.com.au); (b) on its mobile applications offered for iOS and Android phones from 2011 onwards; (c) on affiliate and other third party websites to advertise Sportingbet's wagering services from 2008 when certain advertising restrictions were lifted in Victoria and New South Wales; (d) on signage, apparel and in race names on racecourses and sporting grounds around Australia pursuant to naming rights or sponsorship agreements; (e) in television and radio commercials and in newspapers and other print media; and (f) on social media channels such as Facebook. 34 From 2002 to 2015, Sportingbet invested heavily in marketing and advertising the SPORTINGBET brand. As a result of this expenditure and the growth of the business, the SPORTINGBET brand achieved significant recognition during this period. 35 In March 2013, William Hill plc acquired the Sportingbet business in Australia including the SPORTINGBET and CENTREBET brands. 36 On 5 September 2013, articles were published in the Australian Financial Review and The Sydney Morning Herald to similar effect. The article in the Australian Financial Review was headed "William Hill to scrap online 'bet' brands". The article reported on plans by William Hill plc's chief executive, Ralph Topping to discontinue use of the SPORTINGBET and CENTREBET brands. The article stated: … Mr Topping said Centrebet was a "secondary brand" and there was some confusion in the market between Sportingbet and Sportsbet, the online bookmaker owned by rival British giant Paddy Power. "You've got confusion of brands and you have to look for a unifying brand," he said. "They're all strong brands but I believe the strongest brand of the lot is potentially William Hill." 37 In January 2015, William Hill plc announced that it would be rebranding the SPORTINGBET, CENTREBET and TOM WATERHOUSE brands, moving all existing customers to the WILLIAM HILL brand. 38 In February 2015, as the first step in this rebrand, SPORTINGBET customers were moved to the WILLIAM HILL brand. In April 2015, William Hill plc announced that the successful migration of its Australian SPORTINGBET customers to the WILLIAM HILL brand had been completed. 39 There was some, limited use of the SPORTINGBET brand between February 2015 and August 2016. It has not been used since August 2016. 40 I note for completeness that, although the table at [92] of Mr Tyshing's affidavit includes a substantial amount as turnover of Sportingbet for the 2015 year, this includes the turnover associated with customers who were migrated to the WILLIAM HILL brand early in that year. This was accepted by senior counsel for the respondents at the hearing. The use of SPORTSBET and SPORTINGBET prior to February 2015 41 During the period from about 2001 until February 2015, the SPORTSBET brand and the SPORTINGBET brand were both in use. 42 Mr Evans gives evidence that there was confusion between the two brands during this period. Mr Tyshing, who used to work at Sportsbet, says that he does not recall any such confusion. Mr Evans provides a limited number of examples of such confusion. On the basis of this material, I accept that there was some confusion, but it is difficult to assess the extent of it. However, as discussed below, there are material differences between the position now and the position before February 2015. 43 The respondents served a notice to produce for production of certain documents passing between Sportsbet and IP Australia in connection with Sportsbet's trade marks. In one of these documents, dated 9 October 2013, the patent attorneys acting for Sportsbet submitted that "the differences between the subject SPORTSBET Trade Marks and the cited marks is such to avoid any confusion". The respondents submit that submission was referring to the SPORTINGBET mark. However, the submission needs to be read in the context of all of the "cited marks". In any event, it relates to a different point in time and therefore is of limited, if any, assistance. Other names 44 As described at [73]-[76] of the Evans affidavit, as at 2011, Tabcorp used the TAB and TAB SPORTSBET brands to promote its fixed odds wagering services for sports, including as online brands. However, this use reduced from early 2014, and the TAB SPORTSBET trade mark is not currently used. It appears that it has not been used since late 2014. 45 In or around 1998, a company operating under the brand Sportsbetting.com.au obtained a licence from the Northern Territory to offer bookmaking services. It started offering online wagering to customers in the early 2000s from the website with the domain name sportsbetting.com.au and continues to operate from that website today. It does not appear to have a significant presence in the market. Promotion of the SPORTSBET brand 46 Since 2008, when certain regulatory restrictions were lifted, Sportsbet has promoted the SPORTSBET brand extensively throughout Australia. Sportsbet carries out advertising across various media including online, television, print, radio, social media, and through sponsorship arrangements, including sponsored television segments and integrations into the broadcast. 47 As the confidential figures set out in [54] of the Evans affidavit demonstrate, since 2008, Sportsbet's marketing expenditure, including expenditure on advertisements and sponsorships has been very substantial. The table set out in that paragraph sets out the figures for the years 2012 to 2017, rounded to the nearest million dollars. While the figures for the years 2012 to 2014 were already very large, there has been a significant increase in Sportsbet's marketing in the years 2015 to 2017. 48 Mr Evans gives evidence in [94] of his affidavit, and I accept, that: from March 2015, Sportsbet increased its marketing expenditure; he oversaw marketing expenditure at that stage; and he is aware that the increase in marketing expenditure occurred at least in part because of the fact that the SPORTINGBET brand would no longer be used in Australia. 49 In the period 2008 to 2018, the SPORTSBET brand has been advertised extensively in newspapers, in magazines, on radio, on television, and online via websites. The evidence includes examples of each of these types of advertising. In addition, Sportsbet has sponsored televised sports events and television programs or other partners, which results in promotion of the SPORTSBET brand as it appears on televised programs or on the 'big screen' at sports stadiums. 50 Sportsbet has an active social media presence across several platforms, including: (a) Facebook (www.facebook.com/sportsbetcomau) since 2010, with approximately 785,000 page likes; (b) Twitter (https://twitter.com/sportsbetcomau) since 2009, with approximately 125,000 followers; (c) Instagram (https://www.instagram.com/sportsbetcomau) since 2013, with approximately 25,500 followers; and (d) YouTube (https://www.youtube.com/user/sportsbetcomau) since 2012, with approximately 30,000 subscribers and 26 million total video views. 51 Sportsbet has a team of approximately 30 people dedicated to planning Sportsbet's social media strategy and producing content for each of the platforms. Consumer engagement with Sportsbet's social media pages has increased over the last five years, as set out in [68] of the Evans affidavit. 52 Sportsbet's reputation for online wagering services is considerable. This is amply demonstrated by the matters set out at [156]-[176] of the Evans affidavit. Among other things, the survey data annexed to the Evans affidavit indicates that Sportsbet has the highest unprompted 'top of mind awareness' in the online wagering or betting market amongst current bettors. The online betting market 53 Sportsbet's major competitors in the Australian online corporate betting market are as follows: (a) Tabcorp, which merged with Tatts Group Limited in December 2017. Tabcorp currently owns the TAB and UBET brands; (b) Crownbet, which currently uses the CROWNBET brand; (c) TSG Australia (which changed its name from William Hill Australia Wagering Pty Limited in April 2018, following its acquisition by Crownbet and The Stars Group Inc). TSG Australia currently owns the WILLIAM HILL and CENTREBET brands; (d) Ladbrokes Digital Australia Pty Ltd, which currently owns the LADBROKES brand as well as the BETSTAR and BOOKMAKER brands; and (e) Hillside (Australia New Media) Pty Ltd, which currently operates the BET365 brand. 54 Tabcorp is the only entity in the bookmaking market that has a licence to offer on-course or retail services to customers (save for the Western Australian entity, Racing and Wagering Western Australia). Tabcorp also offers services via telephone and online (including through its website TAB.com.au). Overview of online betting 55 Each year a significant number of new bettors sign up for accounts with online betting platforms and bet online. Information regarding new bettors and size of the overall betting market is gathered by Quantium, a company that uses de-identified National Australia Bank transactional data and scales it up (or extrapolates the data) to represent the whole market to then provide market-level estimates to companies interested in the market, including Sportsbet. The methodology of extrapolation used by Quantium remains confidential to Quantium. 56 In [113] of his affidavit, Mr Evans provides confidential figures as to: (a) the number of new bettors who entered the market in 2017; and (b) the number of new bettors who had entered the market since January 2015. Without disclosing the confidential information, I can say that the numbers are large. 57 At [114] of his affidavit, Mr Evans sets out a table derived from Quantium Data indicating the number of new bettors to enter the market as a proportion of total active accounts in each of the years 2015, 2016 and 2017. The table demonstrates that new bettors constituted a substantial portion of the overall active betting market in each of those years. 58 A significant proportion of new online bettors are young adults. For example, Quantium Data for 2017 indicates that a substantial proportion of new bettors entering the market that year were aged between 18 and 24 years. Also, Sportsbet's internal data indicates that in 2017, a substantial percentage of Sportsbet's new online customers were aged between 18 and 21 years old. Many new bettors who have entered the market since February 2015 would not have been of eligible age to join an online betting platform prior to January 2015. 59 In the ordinary course of Sportsbet's business, Sportsbet conducts customer surveys to identify and measure what prompts customers to join Sportsbet. In 2017, each new customer who had registered and placed their first bet with Sportsbet received a survey by email on the Tuesday in the week after joining Sportsbet. 60 The survey results indicate that a substantial proportion (see the Evans affidavit at [118]) of Sportsbet's new customers who responded were completely new to betting, including online betting. A further substantial proportion of Sportsbet's new customers who responded were new to online betting. The survey indicates that the most significant reasons that new customers choose SPORTSBET are because it is a well-known brand and because of word of mouth. 61 Mr Evans states at [123] of his affidavit, and I accept, that advertising and marketing are essential for an online wagering or betting business to maintain brand awareness because, aside from word of mouth, consumers might not have any exposure to the service or brand otherwise than by advertising and marketing. In addition, given that placing a bet online requires the provision of an individual's personally identifiable information and financial details (for example, bank or credit card details), it is important for the consumer to trust the brand with which they choose to open an account. Familiarity (in the form of spontaneous awareness) is a major contributor in establishing trust. Television advertising is also widely acknowledged to be a major contributor to the establishment of such trust. 62 There are four main ways or channels through which consumers typically sign up with Sportsbet, being: (a) by typing the URL (web address) into a web browser (complete with ".com.au", unless autocorrect function is operating) in order to be taken directly to Sportsbet's website; (b) by searching through Google or another search engine and arriving at Sportsbet's website (whether the Sportsbet result is organic or a paid result); (c) by searching through Apple's iOS App Store or Android App Store to find and download the Sportsbet app; or (d) by clicking a hyperlink or offer that can be presented by a third party, usually on a website (otherwise known as "affiliates") (such as racenet.com) which will direct the consumer to Sportsbet's website. 63 Sportsbet's online competitors are also able to advertise and promote through each of these channels and therefore divert traffic towards their own website (save for the first means of sign up, where a customer has entered the Sportsbet website URL directly into the browser). 64 When a potential customer uses a search engine, they will enter search terms. Following entry of search terms, the search engine results page will show paid and organic results. In the case of Google, the paid results appear at the top of the page while the organic results follow below. These terms are explained at [129]-[130] of the Evans affidavit. 65 The comments provided by Mr Evans with respect to searching and organic/paid results apply equally to searches in the App Store and the Android App Download Centre. Competitors may pay to have their App appear in response to a search for a different brand. 66 Sportsbet gathers data on which platforms customers use to view the Sportsbet online offering and place bets, through Google Analytics. Google Analytics is a web analytics service offered by Google that tracks and reports website traffic. Google Analytics implements tracking on websites, records this data and then provides this data daily to Sportsbet. The data shows that: the majority of customers visit Sportsbet online via a mobile device (either through an App or the Mobile Website); and the majority of customers place their bets via a mobile device (either through an App or the Mobile Website). 67 Sportsbet sees a spike in betting activity, both within the existing customer base and first time bettors, on days when special racing or sporting events are occurring, such as the Melbourne Cup or the Australian Football League Grand Final. In particular, a significantly higher number of people open new accounts with Sportsbet on Grand Final day as compared with any Saturday in the year. 68 Mr Evans gives evidence in [146] of his affidavit, and I accept, that on many occasions a person's first bet with a new bookmaker (and in particular their first bet ever) is done in a group environment. A typical example is placing a first bet at a barbeque on Grand Final day or on Melbourne Cup day, but other examples include, in the pub, at a sports stadium, at a racecourse, and on public transport on the way to a sports or racing event. In all of these circumstances, customers are focussed on how quickly they can register an account and place a bet, so they can continue to enjoy the social occasion and the event they are watching or are about to watch. 69 Mr Evans gives evidence regarding the time it takes to register and place a first bet at [147]-[149] of his affidavit. This shows that the online registration process often only takes a couple of minutes (see Sportsbet's submissions at [42]). The data indicates that, often, a first bet is placed a short time after registration. 70 Mr Tyshing annexes to his affidavit examples of Google searches and searches in Apple's App Store. The results of those searches show that searching for "sports betting" or "betting" or "bet" or "sports" or "sportsbet" returns results of a number of operators which offer services under brands that include the word "bet" or the word "sport" (or both). 71 Mr Tyshing gives evidence, which I accept, in relation to the installation of apps from Apple's app store or the Android app store on a mobile device. In most cases, a customer searches the app store for the application he or she wishes to install. For example, a customer who wishes to install the Sportsbet mobile application will most likely initiate a search for "Sportsbet" or "Sports bet". Such a search will result in a list of search results that includes various providers of sports betting services, most of which describe themselves as providing "racing and sports betting" services. 72 If the customer is accessing the website on their mobile device, rather than using the mobile application, they use a browser to search for or access the relevant website (the same is true if the customer is using a personal computer). Such a search will result in a list of search terms that includes various providers of sports betting services. The respondents' proposed rebranding 73 At the present point in time, CrownBet is operating two platforms and sets of business systems to offer services both to CrownBet wagering customers and William Hill Australia customers. 74 CrownBet intends to bring together the pre-existing customers of the CrownBet business and the customers of the William Hill Australia business under the SPORTINGBET brand and merge the two businesses. This will enable it to offer all of its customers a wider range of betting products and offer marketing promotions not currently available to CrownBet and William Hill Australia customers (including making available CrownBet's market leading loyalty program and corporate bookmaker exclusive Sky Racing vision to William Hill Australia customers). 75 That will involve CrownBet migrating the William Hill Australia customers to the new rebranded CrownBet wagering platform, which it must do by 22 October 2018 in any event 76 Given the duplicate costs CrownBet is presently incurring in operating both the CrownBet and William Hill Australia businesses, CrownBet intends to complete the customer migration as soon as reasonably practicable. Mr Tyshing provides a dollar figure, which is confidential, as to the cost of delay in completing the customer migration. There is no detail supporting that figure. Mr Tyshing expresses the view that any failure in the customer migration or rebrand presents a real risk to CrownBet in terms of losing market share to Sportsbet and other operators. 77 Mr Tyshing provides a confidential estimate of the costs of the customer migration exercise. There is no detail supporting that estimate. 78 Mr Tyshing expresses the view that it is commercially imperative for CrownBet to provide CrownBet and William Hill Australia customers with a seamless rebrand and migration experience. Failing to do so, in his view, will likely result in a material reduction of customers wagering with the merged entity, instead transferring their betting to other providers (many of whom they may already have an account with). 79 Mr Tyshing expresses the view that CrownBet does not have sufficient time before the expiry of the CrownBet brand usage licence (ie, by 26 August 2018) to adopt a "new" brand (as distinct from a legacy brand such as SPORTINGBET). 80 Mr Tyshing states that, as a result of its acquisition of William Hill Australia, CrownBet has acquired (and paid good consideration for) valuable rights to use intellectual property rights associated with legacy brands including the SPORTINGBET trade marks and associated intellectual property and the goodwill associated with the SPORTINGBET brand. There is no supporting documentation for this statement, and it seems to be at odds with other evidence. In the financial statements of William Hill Australia, copies of which are annexed to the Arundell affidavit, a nil value was ascribed to the brand names (including SPORTINGBET). 81 Mr Tyshing states that he believes that the SPORTINGBET brand is still widely recognised in the Australian online wagering market and that CrownBet places significant value on the rights to the SPORTINGBET trade marks and brand. However, I am a little sceptical about this, in light of the fact that the SPORTINGBET brand has been out of use for some time, and in light of the nil value for goodwill in the accounts to which I have referred. 82 Mr Tyshing states that, while CrownBet has rights to the legacy brands CENTREBET and BETEASY, he has formed the view that use of these brands is commercially undesirable and would result in a "sub-optimal" brand position for the CrownBet / William Hill Australia business going forward. 83 Mr Tyshing states that, while CrownBet's rebranding strategy is decided, its specific rebranding plans are net yet finalised. The respondents' evidence includes confidential annexures with a number of options being considered. These adopt the purple colour associated with the CROWNBET brand. Also, senior counsel for the respondents said that the respondents were prepared to undertake not to use a lower case, forward-sloping font. (The SPORTSBET logo uses such a font.) It is apparent from the draft promotional materials, and the submissions made by senior counsel for the respondents during the hearing, that it is proposed to launch SPORTINGBET as a new brand. Consideration 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. Balance of convenience 105 I first consider the impact on the respondents if an interlocutory injunction is granted. 106 The respondents submit that: CrownBet is subject to a contractual obligation to change its business name and trade marks so as to remove any reference to the word "Crown" by 26 August 2018; therefore, if CrownBet is prevented from adopting the SPORTINGBET trade mark as its new brand by an interlocutory injunction, it will have to adopt a different brand before 26 August 2018; given the costs and difficulties associated with changing brands twice if an interlocutory injunction is granted CrownBet will in reality lose the opportunity to adopt the SPORTINGBET brand in the foreseeable future, even if it wins at trial, such that Sportsbet will effectively obtain final relief by success in its interlocutory application. 107 I accept that if an interlocutory injunction is granted, and the respondents are successful at trial, it will probably not be feasible to rebrand a second time, and therefore they will in a practical sense have lost the opportunity to use SPORTINGBET. It follows that the grant of an interlocutory injunction may well be tantamount to a grant of final injunctive relief in Sportsbet's favour. In these circumstances, the degree of likelihood that Sportsbet will succeed in establishing its right to an injunction if the action goes to trial is a factor to be brought into the balance in weighing the risks that injustice may result from deciding the application one way rather than the other. I have already indicated that, in my view, Sportsbet has made out a strong prima facie case. On the basis of the present materials, and for the reasons already indicated, I consider that Sportsbet's case has a sufficient likelihood of success to justify the grant of interlocutory relief that may well have final effect. 108 I note that there was discussion during the hearing of an alternative scenario in which an interlocutory injunction is not granted, the respondents commence using the name SPORTINGBET, the respondents are unsuccessful at trial and then need to change the name. This scenario too would involve migrating customers twice. When this was raised with senior counsel for the respondents, he said that this was a risk the respondents were prepared to run, as they were confident of succeeding at trial. In light of this response, I do not consider this possibility to be a matter that should count against the respondents on the present application. 109 The effect on the respondents of the grant of an interlocutory injunction would be that they would need to adopt a name other than SPORTINGBET for the imminent rebranding exercise. This could be one of the other brands that they have used in the past, or it could be a completely new name. The respondents contend that they would be required, given the time constraints, to adopt one of the past names. However, I am not satisfied that the evidence is sufficient to support this proposition. I am not satisfied that a new name could not be adopted within the time that is available. In any event, even if the respondents are restricted to using past names, this difficulty is in part of their own making. It must have been obvious to those involved at the respondents that once it was announced that they proposed to adopt SPORTINGBET as the new name, a proceeding of the character of the present proceeding would be commenced, and an interlocutory injunction application of this type would be made by Sportsbet. Had the proposal to adopt SPORTINGBET been made public earlier, that is, soon after the William Hill Australia acquisition, the interlocutory injunction hearing would have taken place earlier. 110 It is also relevant to note that, if an injunction is granted, and the respondents are successful at trial, they will have the benefit of the undertaking as to damages, albeit there may be some difficulties of quantification. There is no question as to the ability of Sportsbet and its parent to meet that undertaking. 111 I now consider the impact on Sportsbet if interlocutory relief is refused. 112 If no interlocutory injunction is granted, and Sportsbet ultimately prevails at trial, then Sportsbet will suffer significant loss which will be very difficult to quantify. That is because it would be very difficult to accurately identify the number of customers who may have opened an account with the respondents, instead of with Sportsbet, and what the value of the associated lost profits for Sportsbet has been, and what the value of future lost profits would be. It is likely that a significant proportion of those customers who would have signed up with Sportsbet will not do so. 113 Further, there may be enduring confusion in the marketplace, and loss to the goodwill of Sportsbet in its mark, beyond the date on which the respondents are enjoined by a final injunction, the effects of which would also be difficult to quantify. For example, the promotion by Sportsbet of future offers and incentives may leave some consumers confused as to whether the promotion was in respect of Sportsbet's business, or that of another business, because they have a general understanding that there are two similarly named companies in the marketplace. 114 There is also the risk of damage to Sportsbet by association with the new SPORTINGBET business in the intervening period, given the sensitive nature of the relationship of trust between Sportsbet and its customers. This type of damage would also be very difficult to quantify. 115 It is also relevant to consider the impact on consumers: see Samsung at [68]. Sportsbet submits, and I accept, that consumers will likely have difficulty in accurately distinguishing between the two names, and that may impact upon their ability to locate Sportsbet's business, by entry of a URL into an internet browser, or in conducting searches for the purpose of reaching Sportsbet's online portals. I note the emphasis placed on the protection of consumers from misleading conduct: see, eg, Taco Company of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 at 183 per Franki J; see also 199 per Deane and Fitzgerald JJ. 116 Weighing all of these matters, I consider the balance of convenience and the interests of justice to favour the grant of interlocutory relief. In particular, I consider Sportsbet's case to have a sufficient likelihood of success to justify the grant of interlocutory relief that may well have final effect. 117 For these reasons, I consider it appropriate to grant an interlocutory injunction substantially in the terms sought by Sportsbet. I certify that the preceding one hundred and seventeen (117) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Moshinsky. Associate: Dated: 12 July 2018