High Court of Australia Clarifies “Honest Concurrent Use”

The decision in High Court of Australia case Zip Co Ltd v Firstmac Ltd [2026] HCA 16 is one of the most significant Australian trade mark rulings in recent years regarding the concept of “honest concurrent use”. The case concerned the long-running dispute between buy-now-pay-later provider Zip Co Limited and mortgage lender Firstmac Limited over the use of the word “ZIP” in connection with financial services.

At the centre of the dispute was an important question under the Trade Marks Act 1995 (Cth): when can a trader rely on the “honest concurrent use” defence after adopting a mark that conflicts with an earlier registered trade mark?

The High Court’s decision, just issued today, will likely reshape Australian trade mark clearance practices and increase the importance of pre-launch legal due diligence for businesses adopting new brands.

 Background to the Dispute

Firstmac had owned a registered Australian trade mark for “ZIP” in relation to financial services since 2004. Years later, Zip Co launched its BNPL business using marks including “ZIP”, “ZIP PAY” and “ZIP MONEY”.   Before launch, Zip Co conducted internet searches and initially believed the branding was available. However, when it filed trade mark applications in 2013, IP Australia issued adverse examination reports identifying Firstmac’s earlier “ZIP” registration as a barrier to registration. Despite those reports, Zip proceeded to launch its business under the ZIP branding.  

At first instance, Zip successfully defended the infringement proceedings. The trial judge held that the relevant marks were not deceptively similar and that, in any event, Zip could rely on the “honest concurrent use” defence. The court also ordered removal of Firstmac’s registration for non-use.  

That outcome was dramatically reversed by the Full Court of the Federal Court in 2025.
 The Full Federal Court’s Approach
The Full Court found that Zip’s marks were deceptively similar to Firstmac’s registered “ZIP” mark because the dominant and distinctive element of the branding was the word “ZIP”. The additional words “PAY” and “MONEY” were regarded as descriptive and insufficient to distinguish the marks.  

More importantly, the Full Court rejected Zip’s reliance on the honest concurrent use defence.
The court held that honesty must be assessed objectively and at the time of actual use of the mark — not merely at the earlier point when the business first decided to adopt the brand. Once Zip received IP Australia’s adverse examination reports warning of Firstmac’s prior rights, continuing to launch under the ZIP branding without further legal investigation weighed heavily against a finding of honesty.  Zip then appealed to the High Court.
 The Issues Before the High Court
The High Court appeal raised several major questions of Australian trade mark law, including:
•	whether the relevant date for assessing “honest concurrent use” is the date of first infringement or an earlier point of brand adoption;•	whether honesty is assessed subjectively or objectively;•	whether Zip’s conduct after receiving the adverse examination reports defeated the defence; and•	whether Firstmac’s registration should have been cancelled.  
The case attracted widespread attention in the intellectual property community because it exposed uncertainty in the operation of ss 122(1)(f) and (fa) of the Trade Marks Act.  
 Why the Decision Matters
The High Court’s judgment is important well beyond the specific dispute between Zip and Firstmac.For many years, businesses often relied on relatively informal online searches before adopting new brands. The litigation demonstrates the growing judicial expectation that traders undertake proper clearance investigations — particularly once they become aware of a potentially conflicting registration.

The decision also reinforces a broader trend in Australian trade mark law toward objective commercial standards. Courts are increasingly unwilling to excuse continued use of a mark after a trader has been placed on notice of another party’s rights.
The ruling therefore has significant implications for:
•	fintech and financial services branding;•	start-up naming strategies;•	trade mark clearance procedures;•	IP Australia examination practices; and•	litigation involving composite marks that incorporate a dominant registered word mark.
 A Strong Warning for Brand Owners
Perhaps the clearest lesson from the case is that businesses cannot safely ignore adverse examination reports from IP Australia.The Full Court had already suggested that proceeding after receiving such warnings may be inconsistent with the conduct expected of an “honest trader”.   The High Court appeal became a focal point for determining how far that principle extends. As several commentators observed before judgment, the case was expected to provide “much-needed clarity” on honest concurrent use and the meaning of honesty in Australian trade mark law.  
 Broader Commercial Significance
The case also illustrates how modern brand disputes can become existential for fast-growing technology companies. By the time the litigation reached the High Court, Zip had built a nationally recognised consumer finance brand around the disputed mark.The practical stakes were therefore enormous. A loss potentially exposed Zip to injunctions, damages, and the commercial burden of rebranding a major fintech business.

For Australian IP lawyers and brand owners alike, Zip Co Ltd v Firstmac Ltd now stands as a leading authority on:
•	deceptive similarity;•	dominant mark elements;•	honest concurrent use; and•	the importance of objective commercial honesty in trade mark adoption.
High Court of Australia Clarifies “Honest Concurrent Use” – Zip v Firstmac
