This article was co-authored with Samantha Stone.

On 13 May 2026, the High Court of Australia handed down its unanimous decision in Zip Co Limited & Anor v Firstmac Limited [2026] HCA 16, settling the law on the defence of honest concurrent use under the Trade Marks Act 1995 (Cth) (the Act).1

The bottom line: if you are a trade mark owner, a competitor cannot defeat your infringement claim merely by pointing to years of subsequent trading or the size of the business they have built. If you are entering a market with a new brand, proceeding in the face of a known conflict without proper steps may leave you without a defence, no matter how successful you become.

Link to Background Background

In 2004, Firstmac Limited (Firstmac) registered the word mark ZIP for “financial affairs (loans)” in class 36 (the Firstmac Mark), offering home loan products under the ZIP brand from 2005. In 2013, Zip Co Limited and its subsidiary (the Zip Companies) launched a retail credit product also using the name ZIP.

Crucially, before trading commenced in November 2013, the Zip Companies had filed trade mark applications which received adverse examination reports from IP Australia citing the Firstmac Mark. They did not seek legal advice or respond to the reports, and launched under the brand ZIP anyway. By 2019, when Firstmac sued for trade mark infringement, the Zip Companies had over 1.3 million customers and revenue exceeding $84 million.

Link to The decisions below The decisions below

The primary judge found for the Zip Companies, upholding the honest concurrent use defence and ordering removal of the Firstmac Mark for non-use, and cancellation on the basis of likely confusion given the Zip Companies’ reputation.2

The Full Court of the Federal Court of Australia unanimously reversed the primary judge’s decision, holding that honesty must be assessed at the date of first use in trade (November 2013) and that the Zip Companies had not discharged their onus of proving honesty.3

Link to The High Court’s decision The High Court’s decision

The High Court unanimously dismissed the Zip Companies’ appeal from the Full Court’s findings, addressing two key questions:

  1. When is honesty assessed?
    Honesty is assessed at the date of the alleged infringement, not at some later date.4  The Zip Companies argued the Court should assess their position years later, pointing to co-existence without proven consumer confusion. The High Court rejected this on the basis that if actually registering a trade mark years after infringing use would not excuse that earlier infringement, then the mere possibility that a mark could have been registered years later cannot do so either.5
  2. What does “honest” mean?
    The test asks: what was the trader’s actual state of mind, and was it honest by the standards of ordinary, decent people?6  Knowledge of a conflicting mark is not automatically fatal. Where a trader knows of a material impediment to their brand’s registration and chooses not to engage with it, proving honesty becomes very difficult.7  Critically, the onus of establishing honesty lies on the party asserting the defence – it is not for the trade mark owner to prove dishonesty of the infringer.8 

The Zip Companies failed this test. Their co-founder knew about the Firstmac Mark via IP Australia’s adverse examination reports but gave them only “cursory attention”, did not seek legal advice, and later adopted an (ultimately unsuccessful) strategy to “attack” the Firstmac Mark.9 

Link to Practical steps for brand owners and market entrants Practical steps for brand owners and market entrants

If you are entering the market with a new brand:

  • Conduct comprehensive clearance searches before committing to a brand – so that you do not end up on the wrong side of an infringement claim.
  • Apply for trade mark registration before you commence trading.
  • If a search or adverse examination report identifies a conflicting prior registration, do not ignore it. This decision confirms that an adverse report is a formal warning, not merely a procedural hurdle. Pressing ahead without taking the proper steps to address it may be fatal to any defence raised later. Seek legal advice, consider a co-existence agreement, or explore partial removal of the conflicting mark before commencing use.
  • Bear in mind that subsequent commercial success will not save you – the larger the business you build on a conflicting name, the greater the eventual loss if enforcement action succeeds. 

If you are a trade mark owner:

  • Take confidence in the strength of your protection with a registered trade mark. This decision confirms that the honest concurrent use defence is a narrow exception, not a broad licence for others to trade under your mark.
  • Monitor new trade mark applications and the market to understand what competitors are doing. Consider using a formal watching service.  Be aware of your rights to prevent infringement if necessary.
  • Maintain and document use of your registered marks to ensure your registrations remain valid and enforceable when the time comes.
  • Act quickly when you spot infringement – the earlier you move, the less room a competitor has to build a case.

Link to Footnotes Footnotes

1  Despite the moniker, “honest concurrent use” is not itself a standalone defence. The defences are found in ss 122(1)(f) and (fa) of the Act, which provide that a person does not infringe a registered trade mark where the court is of the opinion that the person would obtain registration of their mark if they were to apply for it. One basis on which such registration may be obtained notwithstanding a conflicting mark is “honest concurrent use” under s 44(3). The “defence” thus operates indirectly: the defendant must show that, by reason of honest concurrent use, they would have been entitled to registration. See Zip Co Limited & Anor v Firstmac Limited [2026] HCA 16 (the Decision) at [1]-[4], [35]-[38].

2  Firstmac Limited v Zip Co Limited [2023] FCA 540 (Markovic J). Her Honour upheld the defence of honest concurrent use under ss 122(1)(f) and 122(1)(fa) read with s 44(3), finding that the Zip Companies had acted honestly from mid-2013: at [242], [255], [271]. Her Honour also ordered removal of the Firstmac Mark under s 92(4)(b) for non-use during the relevant three-year period: at [319]-[334], [365]; and cancellation under s 88(2)(c) on the basis of likely confusion given the Zip Companies’ reputation: at [378], [395].

3  Firstmac Limited v Zip Co Limited [2025] FCAFC 30 (Perram, Katzmann and Bromwich JJ). The Full Court held that the Zip Companies had not discharged their onus of proving honesty as at November 2013, given their knowledge of the Firstmac Mark via the adverse examination reports: at [62]-[83]. The Full Court also held that Firstmac had used the ZIP mark as a trade mark in connection with its 2018 home loan product, reversing the primary judge’s non-use finding: at [117]-[145]. On the cancellation ground, the Full Court found no “blameworthy conduct” on Firstmac’s part and held it would be contrary to the Act to allow “the assiduous efforts of an infringer” to invalidate a registration: at [150]-[170].

4   The Court reasoned that since every occasion of use of a mark in trade can be a separate potential infringement, the defences apply separately to each such occasion: the Decision at [56].

5   If a party without a registration cannot rely on a later actual registration to defeat an infringement claim, it would be incoherent to allow reliance on a hypothetical entitlement to registration years after the infringing conduct: the Decision at [44]-[56].

6   The test derives from Peters v The Queen (1998) 192 CLR 493 and Macleod v The Queen (2003) 214 CLR 230, as applied to the trade marks context: the Decision at [57]-[58].

7  See the Decision at [62]-[63] and [70].

8   The onus of establishing honesty lies on the party asserting the defence: the Decision at [69]-[70]; Firstmac Limited v Zip Co Limited [2025] FCAFC 30 at [3], [83].

9   On the facts here, see the Decision at [15], [22], [67]-[70].