Can relaunching an old brand be misleading or deceptive? You bettor believe it

These days, it seems that everything old is new again; so if you if you are looking for a new brand, it’s a safe bet to go back to one of your old ones, yes?  Well, no, as CrownBet has just discovered in its attempt to bring back the “Sportingbet” brand back to Australian sports betting.  Despite the fact that CrownBet (through a subsidiary, TSG) owns three Australian trade marks for “Sportingbet”,  the operators of Sportsbet (a trade rival of CrownBet) have recently obtained an interlocutory injunction to prevent the reappearance of “Sportingbet”.  The basis for the injunction was that because Sportsbet and “Sportingbet” are similar, the use of “Sportingbet” would amount to misleading and deceptive conduct in breach of the Australian Consumer Law.

CrownBet’s need to rebrand arose from a series of transactions in which it was involved.  First, Crown Resorts sold its share of CrownBet (with the result that CrownBet will be required to cease using the “CrownBet” brand in August 2018).  Second, CrownBet purchased the William Hill betting business, but on the basis that CrownBet can only use the “William Hill” brand until October 2018.  As the “Sportingbet” brand (including the trade marks and relevant domain names) was part of what CrownBet acquired when it acquired the William Hill business, CrownBet thought that using “Sportingbet” as the new brand for its entire betting business looked like a winner.

The problem, however, was that the “Sportingbet” brand had been dormant since August 2016 (and there had been only very limited use between February 2015 and August 2016).  To adopt the lyrics of LL Cool J (which, perhaps surprisingly, was not cited by Moshinsky J in this judgment), “Don’t call it a comeback/I’ve been here for years”.  During the period when Sportingbet was off the track, the business of Sportsbet (and the promotion of the Sportsbet brand) had, on the evidence, increased significantly.  For that reason, said Sportsbet, the relaunch of the “Sportingbet” brand would mislead consumers into thinking that Sportingbet was really Sportsbet (or that the two were associated). Accordingly, Sportsbet sought an interlocutory injunction restraining the use of “Sportingbet” until a final hearing.

The Court granted the injunction sought by Sportsbet.  To understand why, it is important to note that in cases of this kind, courts pay careful attention to the consumer behaviour of the relevant consumers (in this case, sports bettors).  Although CrownBet asserted that sports betting consumers are likely to be sophisticated (and thus, said CrownBet, likely to appreciate the differences between similar brands) the Court noted the evidence which showed that there are a large number of consumers who become sports bettors each year (new bettors, it may be inferred, being less likely to have a sophisticated understanding of the players in the market).

The Court also referred to evidence which showed that a lot of sports betting is done via apps on mobile devices which are downloaded from app stores, and the Court noted that smaller screens on mobile devices allowed less space to display differences between brands.  Equally, although CrownBet drew attention to the differences between its purple branding and Sportsbet’s blue and yellow branding, the Court considered that distinctions of this kind may not be seen by consumers at the time that they come to download an app to their mobile phones.

Finally, the Court dismissed CrownBet’s argument that it had paid good money for the valuable rights associated with the “Sportingbet” brand, which it was thus entitled to use.  The main problem with this argument was that the financial statements of William Hill showed that the value ascribed to William Hill’s dormant legacy brands (including “Sportingbet”) was “nil”.  It is always difficult to persuade a court that a right is valuable when a contrary view is taken by one’s own accountants.

Although the Court described Sportsbet’s prima facie case is being a strong one, it is important to bear in mind that this decision was only an interlocutory injunction. CrownBet may ultimately succeed at final hearing, in which case Sportsbet will need to make good any losses which CrownBet has suffered as a result of the injunction.

The case demonstrates that decisions about branding (particularly in competitive markets, such as sports betting) are more complex than simply finding a trade mark and going to market. Even where similar brands have existed previously, market circumstances can change (as was the case here) so that an attempt by a legacy brand to make a comeback may be met with a plea of “that was then, this is now”.

The case also emphasises the importance of considering the particular consumers to whom a brand will be marketed – the question is not so much in knowing (as one sports betting brand used to claim) what punters want, but knowing what evidence the court will want about how punters behave and how they might be misled.  In other words, you’ll need a bettor understanding if you want to get a better result.

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July 21
Competition and consumer law Intellectual property law