Australia’s High Court has finally and unanimously ruled against Buy Now, Pay Later provider Zip Co in a landmark trademark dispute with Firstmac, confirming that the company cannot rely on the “honest concurrent use” defence after continuing to use the ZIP brand despite warnings from regulators.

In the decision Zip Co v. Firstmac, handed down on May 13, 2026, the High Court upheld an earlier ruling by the Full Federal Court, finding that Zip Co failed to prove it had acted honestly when it launched products under the ZIP name in late 2013.

“The assessment is not about whether actual confusion has occurred, but whether confusion is likely,” said Aparna Watal, a partner and head of trademarks at Halfords IP in Sydney. “Courts look at a range of factors such as the degree of similarity between the marks, the similarity of the goods or services they cover, the degree of care consumers are likely to exercise, and the distinctiveness of the earlier mark or the shared element.”

“In the Zip Co case, this concept was relevant but not central to the appeal,” she noted. “Both Firstmac and Zip Co operated in the financial services sector – Firstmac in home loans, Zip Co in consumer credit – and both used the word ZIP as their mark. The marks were similar, and the services were closely related. IP Australia flagged the likelihood of confusion as early as 2013 in its adverse examination reports, and that warning ultimately proved pivotal to the outcome.”

She added that the Zip Co decision carries several important lessons for any business investing in a brand.

“First, search before you launch. The trademark register is publicly accessible and free to search. IP Australia’s online tool, TM Checker, allows anyone to identify conflicts before they arise. Had Zip Co searched the register before filing, the collision with Firstmac’s mark would have been apparent from day one. A comprehensive clearance search, covering identical and similar marks across relevant classes, is essential before any brand is taken to market,” she said. 

Second, take adverse examination reports seriously. “When IP Australia raises objections, it is not a bureaucratic hurdle to be managed; it is a legal warning that must be addressed promptly with proper advice. Zip Co received those reports in October 2013 and gave them only cursory attention. The High Court found that failure to engage with those reports, and the failure to seek legal advice in response to them, was fatal to Zip Co’s claim of honest conduct. Inaction in the face of a known impediment is not a neutral position; it is a risk that accumulates over time,” she added. 

Third, register early and use consistently. “Registered trademarks are valuable commercial assets, and priority is determined by registration date, not by the scale of your business. Firstmac’s mark, despite lying dormant for several years, was ultimately vindicated at the highest level. Early registration secures your priority position and provides a strong foundation for enforcement,” said Watal.

Fourth, maintain registrations through use. “While a dormant mark can survive, sustained use reduces vulnerability to non-use cancellation applications, which Zip Co pursued in an attempt to remove the Firstmac mark from the register,” she said. 

Finally, build a layered IP strategy. “A single word mark registration is rarely sufficient. Companies should consider protecting the full range of brand identifiers, logos, get-up, packaging and distinctive visual elements, across all relevant classes and jurisdictions from the outset,” she said. 

- Excel V. Dyquiangco