Zip v Firstmac: The High Court Redefines Honest Concurrent Use in Australian Trade Mark Law

On 13 May 2026 the High Court of Australia handed down its unanimous decision in Zip Co Limited v Firstmac Limited [2026] HCA 16 — the first time Australia's highest court has ruled on the "honest concurrent use" defence to trade mark infringement under the Trade Marks Act 1995 (Cth). The outcome is a comprehensive win for the trade mark owner, Firstmac, and a costly lesson for one of Australia's best-known fintech brands. For any business that has ever adopted a name knowing that somebody else had already registered something similar, the decision changes the risk calculus permanently.

What was the dispute in Zip v Firstmac about?

Firstmac Limited, Australia's largest non-bank lender, registered the word mark ZIP in 2004 for "financial affairs (loans)" in class 36. It offered ZIP-branded home loans from 2005, paused new ZIP loans in 2014 while continuing to service existing borrowers, and relaunched a ZIP home loan through an affiliated online lender in September 2018.

Separately, in 2012 the founders of what would become Zip Co Limited were developing a buy-now-pay-later business. An internet search for "ZIP" in early 2013 turned up nothing about Firstmac, and the founders settled on the ZIP and ZIP MONEY brands. In August 2013 they filed trade mark applications. In October 2013 IP Australia issued adverse examination reports expressly citing Firstmac's registered ZIP mark as a conflicting prior registration for similar services. The founders did not seek legal advice, did not respond to the reports and did not search the Register. A few weeks later, in November 2013, they launched the business under the ZIP marks anyway.

By the time Firstmac sued for infringement in June 2019, Zip Co had grown into a major listed fintech with revenue above $84 million, more than 16,000 merchant partners and 1.3 million customers. Along the way it had twice tried — and failed — to have Firstmac's registration removed for non-use.

How did the case get to the High Court?

At trial in 2023, the Federal Court found for Zip Co. The primary judge held that Zip Co's use was honest, that composite marks such as ZIP PAY and ZIP MONEY were not deceptively similar to ZIP, and ordered Firstmac's registration removed for non-use. In March 2025 the Full Federal Court unanimously reversed every one of those findings: the composite marks were deceptively similar and infringed; honesty had to be assessed at the date of first use in November 2013, and Zip Co had not proved it; Firstmac's use from September 2018 defeated the non-use application; and cancellation under section 88 was not warranted. Zip Co obtained special leave and took the honest concurrent use question to the High Court.

What is the honest concurrent use defence?

Despite its name, "honest concurrent use" is not a free-standing defence. Sections 122(1)(f) and 122(1)(fa) of the Act provide that a person does not infringe a registered trade mark if the court is of the opinion that the person would obtain registration of their own mark if they applied for it. One route to registration despite a conflicting prior mark is section 44(3)(a), which allows the Registrar to accept an application where there has been honest concurrent use of the two marks. The defence therefore works indirectly: the defendant must persuade the court that, because of honest concurrent use, its mark would be registrable notwithstanding the plaintiff's earlier registration.

Two questions had never been settled at the highest level. First, at what point in time is honesty judged? Second, what does "honest" actually require? The High Court answered both.

When is honesty assessed?

Zip Co argued that the court should assess its position as at the date it filed its defence (August 2019) or the date of trial (March 2022). By then it could point to six or eight years of side-by-side trading, enormous goodwill and no proven consumer confusion. The High Court unanimously rejected that approach.

The Court held that the section 122(1)(f) and (fa) defences are defences to each occasion of alleged infringement. They are not, in the Court's words, "collective defences to be assessed once and for all". Infringement under section 120 is a series of separate acts, so a defence must be made good for each act — and the state of mind that matters is the defendant's state of mind when that act occurred. A trader cannot rely on innocence at an early stage to excuse later use that was not honest, and cannot rely on later commercial success to cure use that was not honest at the outset. As the Court reasoned, if actually obtaining a registration years after the infringing use began would not excuse the earlier infringement, the mere possibility that registration could have been obtained later cannot do so either.

For Zip Co, that meant the critical date was November 2013 — weeks after it had been told in writing by IP Australia that its marks conflicted with Firstmac's.

What does "honest" mean?

The Court confirmed that honesty in section 44(3)(a) is concerned with the defendant's actual state of mind, judged against the standards of ordinary, decent people. Several points of practical importance emerge from the judgment:

The onus is on the defendant. The question is not whether the trade mark owner can prove dishonesty. It is whether the defendant can positively establish an honest state of mind at the relevant time. A defendant who simply did not turn its mind to the question may be unable to discharge that onus.

Knowledge of the other mark is not automatically fatal — but it weighs heavily. A trader who knows of a conflicting registration may still act honestly if it genuinely believes, for good reason, that confusion will not arise. But where a trader is aware of a material impediment to the legitimate use of its mark and presses on without addressing it, proving honesty becomes very difficult. Zip Co's founders knew of Firstmac's mark from the adverse examination reports, gave them what the courts described as cursory attention, and later adopted a strategy of attacking Firstmac's registration rather than avoiding it.

Recklessness can defeat honesty. Failing to consider whether confusion might arise can itself be enough to preclude a finding of honesty. Zip Co led no evidence that its founder had ever considered whether consumers might be confused between ZIP and Firstmac's ZIP, or why he believed they would not be.

Failure to search the Register is not, by itself, dishonesty. The Court was careful not to equate carelessness with dishonesty, and did not lay down a rule that every trader must conduct a Register search before launching. But deliberately avoiding a search, or ignoring adverse results once obtained, may support an inference of dishonesty — and in practice, a trader who skips the obvious steps will struggle to prove an honest state of mind.

What happens to Zip Co now?

With the appeal dismissed, the Full Court's orders stand: declarations of infringement, injunctions and an inquiry into damages, together with Firstmac's costs across three levels of court. Commercially, Zip Co must either rebrand in Australia or negotiate a licence from Firstmac to continue using the ZIP name — a name it has spent more than a decade and a great deal of money building. The size of the business it built on the conflicting name does not help it; if anything, it magnifies the loss.

What does Zip v Firstmac mean for Australian businesses?

For businesses launching or extending a brand, the message is blunt. An adverse examination report from IP Australia is a formal warning, not a procedural inconvenience. If a clearance search or examination report identifies a conflicting registration, the moment to deal with it is before launch — by taking legal advice, negotiating a co-existence agreement, seeking partial removal of the conflicting mark, or choosing a different name. Proceeding regardless, in the hope that the problem will go away or that scale will provide protection, is now a strategy the High Court has expressly rejected. The honest concurrent use defence is a narrow exception, and years of subsequent trading will not rescue a launch that was not honest when it happened.

For trade mark owners, the decision is reassuring. A registration is a genuine monopoly, and a competitor cannot defeat an infringement claim merely by pointing to the size of the business it has built or the years that have passed. The corollary is that owners must keep their registrations enforceable: use the mark, keep records of that use, watch the market and the Register, and act promptly when a conflict appears. Firstmac's relaunch of the ZIP home loan in 2018 was what defeated Zip Co's non-use attack; without it, the outcome might have been very different.

Stellar IP Law conducts trade mark clearance searches, responds to adverse examination reports and advises on co-existence and enforcement strategy for businesses across Sydney, the Gold Coast, Brisbane, the Sunshine Coast, Newcastle and Wollongong. If you have adopted a brand in the knowledge of a similar prior mark — or received an adverse report and are not sure what to do next — contact us before the position hardens.