The High Court’s recent decision in Zip Co Limited v Firstmac Limited [2026] HCA 16 reinforces an important lesson for businesses developing new brands, that trade mark clearance should be treated as a commercial decision-making process, not simply a registration step.
The decision provides clarification on the defence of honest concurrent use under the Trade Marks Act 1995 (Cth). The High Court unanimously dismissed Zip Co’s appeal, finding that the companies had not established the required honesty from the time of their first potential infringement.
For businesses, the practical issue is therefore not merely whether a search was conducted. It is whether potential conflicts were identified, properly assessed and addressed before commercial use of the brand began.
What did the High Court decide in Zip Co v Firstmac?
Firstmac had registered the word mark ZIP in 2004 for loan-related financial services.
At first instance, Firstmac Limited commenced proceedings in the Federal Court against Zip Co Limited and its subsidiary, Zipmoney Payments Pty Ltd, in June 2019, alleging infringement of its registered ZIP trade mark through the respondents’ use of ZIP and related marks for consumer credit products. Zipmoney also sought removal of Firstmac’s mark from the Register for non-use.
At first instance, the trial judge found certain uses of infringement but accepted the Zip Co’s defence of honest concurrent use. This defence was later rejected by the Full Federal Court.
On appeal, the High Court considered when honest concurrent use must be assessed and what “honest” means under s 44(3) of the Trade Marks Act 1995 (Cth). The Court held that honesty must be assessed at the time of each alleged infringement and judged objectively by the standards of ordinary, decent people. As Zip had not established the requisite honesty from the time of its first potential infringement, the High Court dismissed the appeal with costs.
Why does Zip Co v Firstmac matter for brand clearance and businesses?
The decision highlights the risks of adopting a trade mark without adequately investigating existing rights of third parties.
A business may invest heavily in a brand and building a reputation through marketing, product development, packaging, digital platforms, customer acquisition, only to discover that its use conflicts with an earlier registered trade mark.
The consequences can extend well beyond litigation costs. Businesses may face rebranding expenses, disruption to commercial operations, loss of goodwill, negative media attention and uncertainty for customers and business partners.
Notably, the decision confirms that honest concurrent use is not a blanket protection for businesses that have already established a market presence. The relevant defence must be assessed at the time of each alleged infringement, and the party relying on it must establish the requisite honesty. Knowledge of a competing registered mark is an important consideration and will ordinarily weigh strongly against a finding of honesty, although knowledge alone is not necessarily determinative.
For businesses, the message is clear: commercial success and investment in a brand do not, of themselves, resolve the legal risks associated with its use.
What should businesses do before using a new trade mark?
A comprehensive trade mark clearance process should form part of a business’s brand development and launch strategy. This involves more than checking whether an identical name is already in use online.
Appropriate searches should identify potentially conflicting Australian trade mark registrations and applications, assess similar marks in the relevant goods and services, and consider the legal implications of any identified conflicts. Where risks arise, businesses should obtain advice before proceeding with adoption, registration or launch.
Clearance should also be considered when expanding into new product lines, entering new markets or adopting new sub-brands. A mark that appears suitable for one commercial activity may present different risks when used for additional goods or services.
Businesses should also maintain a clear record of their clearance process and the advice received. If a potential conflict is identified, it should be assessed and addressed before significant expenditure is committed. Early legal advice can help businesses evaluate their options, including modifying a proposed mark or selecting an alternative.
Key takeaways
Search before launch. Conduct trade mark clearance searches before committing to a new brand or investing in its commercial rollout.
Look beyond identical marks. Assess potentially similar marks, relevant goods and services, and the likelihood of conflict with existing rights.
Do not rely on honest concurrent use as a fallback. The Zip decision demonstrates the significant evidentiary and legal difficulties associated with establishing this defence.
Address conflicts early. Investigate potentially conflicting rights and obtain legal advice before proceeding with adoption or launch.
Treat clearance as risk management. A structured clearance process can help protect brand value, reduce the risk of disputes and support informed commercial decision-making.
The key message is that trade mark clearance is not simply a registration formality. It is a fundamental part of protecting a business’s brand, managing legal exposure and safeguarding long-term commercial investment.
The Cowell Clarke team has experience advising businesses on trade mark clearance searches, brand protection and managing associated legal and commercial risks. If you are developing a new brand, expanding into new markets or navigating a potential trade mark conflict, contact Myrna Taouil.
This publication has been prepared for general guidance on matters of interest only and does not constitute professional legal advice. You should not act upon the information contained in this publication without obtaining specific professional legal advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication and to the extent permitted by law, Cowell Clarke does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting or refraining to act in relation on the information contained in this publication or for any decision based on it.