In a landmark decision on 13 May 2026 in the case of Zip Co Limited v Firstmac Limited [2026] HCA 16, the High Court of Australia unanimously rejected the ‘honest concurrent use’ argument by Zip Co for using the trademark ‘ZIP’.

 

Background

Firstmac Limited, a provider of financial and loan services, first registered the word trademark “ZIP” in 2004. Subsequently, and in or around 2013, Zip Co Limited began using “ZIP” for its buy-now-pay-later services. Zip Co Limited had initially selected the name without knowledge of Firstmac’s registration, but later became aware of the earlier mark through IP Australia objections and legal advice. The primary issue before the High Court followint the grant of special leave was whether Zip Co Limited could rely on the ‘honest concurrent use’ defence in the circumstances.

 

High Court of Australia

The High Court clarified two major points about the defence of “honest concurrent use”:

1. Honesty is assessed at the time of each allegedly infringing use, and rejected the idea that early innocent adoption permanently immunised an entity’s later conduct(s). This meant that, once Zip Co had become aware of the conflicting registered mark, its continued use of the word ‘ZIP’ had to continuously satisfy an objective standard of honesty for the defence to be upheld.
2. “Honesty” is to be determined objectively, according to the standards of “ordinary, decent people”, not merely the user’s subjective belief.

In the circumstances of this case, the High Court of Australia found that, after becoming aware of Firstmac Limted’s rights, and the substantial risk of infringement, Zip Co’s continued use of the trademark was not “honest” for the purposes of the “honest concurrent use” defence.

 

Significance

This landmark decision from the highest judicial court of Australia means that the scope of this defence has been markedly reduced, and underlines the importance of trademark clearance searches before launch of a product. It further emphasises the importance of documenting legal advice during brand adoption decisions, and provides a clear warning to businesses against continuous infringement of intellectual property rights after receiving clear notice of the infringement.

 

Author: Annie WANG, Partner

Published by: High Court of Australia, Summary of Judgment