Zip Co Limited v Firstmac Limited
High Court of Australia · 2026
Zip Co Limited v Firstmac Limited [2026] HCA 16
A start-up called itself ZIP, honestly, in 2013. Within months it had IP Australia's reports in hand and launched anyway. When must a trade mark defendant's honesty be proved, and at what moment?
What happened?
Firstmac has owned the registered word mark ZIP for "financial affairs (loans)" in Class 36 since 2004 ([4], [7]). In 2013 Mr Diamond and Mr Gray settled on the names ZIP and ZIP MONEY for a consumer credit business, without knowing of Firstmac's mark ([9]-[11]). On 19 and 20 August 2013 Zipmoney applied to register logos, and in October 2013 IP Australia issued adverse examination reports saying the logos closely resembled the Firstmac Mark ([13]-[14]). Mr Diamond gave the reports cursory attention, but from then at the latest he knew of Firstmac and that IP Australia considered its mark precluded the registration ([15]). The Zip Companies (Zip Co Ltd and its subsidiary) began using ZIP marks as trade marks with customers in November 2013 ([16]-[17]).
Firstmac sued for infringement in June 2019 ([25]). Markovic J held that the Zip Companies infringed but had defences of honest concurrent use under s 122(1)(f) and (fa), read with s 44(3), and found their conduct honest from the first half of 2013 onwards ([26]-[28]). The Full Court of the Federal Court (Katzmann and Bromwich JJ, Perram J agreeing and adding reasons) held that the Zip Companies had not proved honesty in November 2013 ([31]-[32]). On the appeal, the Zip Companies argued that honesty should be assessed at the date they filed their defence or at the trial ([46]).
What did the Court decide?
The High Court dismissed the appeal with costs. Gageler CJ, Gordon, Edelman, Steward and Beech-Jones JJ gave one set of joint reasons ([74]; order). The Zip Companies' first two grounds failed, so the third, a consequential challenge to the Full Court's refusal to cancel the Firstmac Mark, failed with them ([35], [37]). The Full Court's decision against the Zip Companies stood.
Proposition
What is the principle?
When the defences are assessed. The defences in s 122(1)(f) and (fa), read with s 44(3), are assessed at "the time of each alleged potential infringement" ([5]). The Court reasoned that a defence to infringement that depended on whether a mark could be registered years afterwards would be incoherent when actual registration years later would not suffice ([48]), and that the opening words of s 122(1) direct attention to the date of the use complained of ([51]). Because "every occasion of the use of a mark in trade in Australia within s 120 can be a separate potential infringement", the defences "apply separately to each such occasion" ([56]). The Court rejected Firstmac's contrary submission that the first potential infringement decides all later ones ([64]).
What "honest" requires. "Honest" takes its ordinary meaning ([57]). The state of mind of the person is identified, directly or by inference, and then measured against the standards of ordinary, decent people ([57]-[58]). The party relying on the defence must prove honesty ([67], [69]). Knowledge of the competing mark is an important factor, but "mere knowledge of the competing mark will not preclude a finding of honesty" ([62]); the Court approved the reasoning that a finding of knowledge will ordinarily weigh strongly against honesty ([70]). Failing to search the Register carelessly does not itself show dishonesty ([63]).
Application. The trial judge started the assessment in the first half of 2013, when the founders were unaware of the Firstmac Mark, and asked whether honest conduct had later turned dishonest. That distorted the onus, which was to prove honesty from November 2013 ([66]-[67]). By then Mr Diamond knew of the adverse reports, and the Zip Companies led no evidence sufficient to find that he believed there would be no confusion or that he was not reckless in not considering it ([70]). The Court also said that two formulations in the Full Court should be approached with caution: a reference to the inquiry being objective ([71]-[72]), and Perram J's addition of an objective element, which if read literally would substitute carelessness for dishonesty ([73]).
Left open. The Court did not decide whether honest concurrent use excludes blameworthy conduct beyond a threshold of honesty ([42]), how s 44(3) relates to other grounds of opposition ([43]), or whether 'concurrent' use requires actual use of the registered mark; it proceeded on the assumption that the 'notional use' that comes from registration is sufficient ([44]).
Why does this case matter?
The decision shows what the defences are for. The Court said they remain available in the two typical settings of the old doctrine, such as two traders who innocently used similar marks in different localities, and that they could have operated even in this case if the Zip Companies had proved what they needed to ([38], [55]). The Zip Companies lost a defence that Markovic J had upheld, so a first-instance finding of honesty is not the end of the question on appeal.
The judgment is about the defences. The appeal turned on the defences ([4]); the Full Court's conclusion that the Zip Formative Marks also infringed was no longer disputed ([31]). A student can cite it for those defences and not for the wider operation of s 44(3).
Exam and application relevance
Fix the date of each potential infringement first (here, November 2013 for the first, which was an unchallenged finding, [45]), and then ask what the defendant proved about its state of mind at that date and at later uses ([56], [67]).
Use the structure the Court gave: identify the state of mind, then assess it against the standards of ordinary, decent people ([58]). If the facts show the defendant knew of the registered mark, treat that as an important factor that was not decisive by itself, and look for evidence of what the defendant believed about confusion ([62], [70]). If the question mentions the defendant's own earlier honest adoption, say that it is relevant but is not the starting point ([67]).
Say that the case concerned ss 122(1)(f) and (fa) with s 44(3), and note the questions the Court left open ([41]-[44]) when an answer depends on them.
Check your understanding
1. The Zip Companies filed their defence in 2019 and the trial was in 2022. Why did the Court decline to assess honesty at either date? 2. A defendant uses a similar mark on two occasions, a week apart. Does the Court's reasoning require two separate assessments? What did it say about how likely the answers are to differ? 3. Mr Diamond knew of Firstmac from October 2013. Did that decide the case? What else did the Court look for ([62], [70])? 4. What was the trial judge's error, and why did it matter that the founders had been honest in the first half of 2013 ([66]-[67])? 5. Which questions about s 44(3) did the Court say it was not deciding ([41]-[44])?