The High Court of Australia has delivered an important decision for businesses using or planning to use trade marks in competitive markets: Zip Co Ltd v Firstmac Ltd [2026] HCA 16.
While the case arises from a high-profile dispute between financial services providers, the lessons apply much more broadly. In particular, the decision provides much needed clarity on the scope and limits of the “honest concurrent use” defence to trade mark infringement.
For brand owners, startups, and established businesses alike, the message is clear: once you are on notice of a potential trade mark conflict, continuing to use your brand without properly addressing that risk can be fatal.
A Brief Background
The dispute arose between Firstmac, a non-bank lender that owned the registered trade mark for “ZIP” in connection with loans and financial services since 2004. Zip Co (known for “Zip Pay” and “Zip Money”) adopted and used branding incorporating the word “ZIP” in similar financial services. In the beginning of 2014, Firstmac ceased to offer its ZIP home loan products to new customers but continued to manage and service those loans for existing customers. In 2018 they launched a new home loan under the name ZIP through an online leading platform Loans.com.au which promoted Firstmac’s financial products and services.
The founders of Zip Co initially adopted the name without knowledge of Firstmac’s earlier mark and applied for the trade marks with IP Australia in 2013. In the same year Zip Co received adverse examination reports from IP Australia identifying the conflict. Despite this, ZIP Co proceeded to use “ZIP” branding in trade from November 2013, leading Firstmac to commence trade mark infringement proceedings.
The central question before the High Court was whether Zip Co could rely on the statutory defence of honest concurrent use under the Trade Marks Act 1995, despite continuing to use the ZIP branding after becoming aware of Firstmac’s earlier registered “ZIP” trade mark.
The High Court unanimously dismissed Zip Co’s appeal on 13 May 2026 and held that the defence of honest concurrent use is assessed at the time of use, and that ZIP Co had not affirmatively established that its use was honest from November 2013.
Key Legal Findings
1. Honesty is assessed at the time you start using the mark
The High Court confirmed that the defence of honest concurrent use is assessed at the time of each alleged infringement, beginning with the first use in trade. In this case, the Court considered the first use in trade to be November 2013 and concluded that if honesty is not established at the first use, a later change in circumstances will not ordinarily help.
Many businesses assume that if a brand becomes well-established, it gains legitimacy. This decision confirms that legality is determined at the start of its use and is not rewritten later.
2. “Honesty” is judged against community standards
The Court clarified that honesty involves a state of mind that is honest by the standards of ordinary, decent people. This means it is not enough for a company to argue that its conduct was commercially sensible. The test is whether ordinary, decent people would regard the company’s state of mind as honest, regardless of any business rationale behind the decision, and they would be unlikely to consider it honest for a company to continue using a trade mark after being put on notice that a substantially similar mark was already registered.
3. Knowledge of a conflicting mark is highly significant
Once Zip Co were put on notice of Firstmac’s mark through the IP Australia reports, they knew there was at least a “material impediment” to using the mark.
The Court held that knowledge does not automatically defeat the defence, but it strongly weighs against honesty, particularly where risks are ignored. The moment a business becomes aware of a trade mark issue, its risk profile fundamentally changes.
When a party is formally put on notice of a conflicting trade mark, they are expected to take it seriously. It was found that going ahead without responding to those warnings suggested reckless disregard for the rights of the existing trade mark owners. This was considered important because honesty requires more than just an absence of bad intent, it requires a party to act reasonably when they know or have been told that their conduct may be causing harm to another.
4. Early “innocent adoption” will not save you
The High Court made it clear that honestly adapting a mark in the early stages of the business will not save a party if they later become aware of a conflicting registered mark and still progress with using the trade mark regardless. The Court mentions that the relevant question is not whether adoption was innocent, but whether use was honest at the time of infringement.
It is clear from this that companies, businesses and individuals cannot bank on its early innocence to justify later conduct. Once it becomes aware of any conflict in relation to its intellectual property, it must act reasonably or risk losing the protection of honest concurrent use defence entirely.
5. The burden is on you to prove honesty
A crucial aspect of honest concurrent use defence is that the burden of proof lies with the party claiming it. It is not enough to simply deny dishonesty – there must be evidence to positively prove that their state of mind was honest at the time of each infringing use.
What This Means for Your Business
This decision has direct, practical implications for brand strategy and risk management:
Before launching a brand:
- Conduct proper trade mark searches
- Obtain clear legal advice where risks arise
If a risk is identified:
- Treat examiner reports and objections as serious warnings and consider legal advice
- Consider:
- rebranding
- narrowing your scope
- seeking coexistence
- Document your decision-making process
Avoid:
- Pressing ahead without resolving known issues
- Assuming later success will legitimise earlier decisions
- Treating trade mark registration as a mere formality
A Strategic Opportunity – Not Just a Risk
While the case highlights risk, it also underscores the value of proactive trade mark strategy.
Businesses that:
- invest early in clearance and advice;
- adopt distinctive, registrable brands; and
- respond properly to risks
are in a far stronger position to:
- enforce their rights;
- avoid costly disputes; and
- build sustainable brand value.
How We Can Help
Trade mark disputes of this kind are rarely about a single decision – they arise from a series of strategic choices made over time.
Coleman Greig’s Intellectual Property and Brand Protection team helps clients at every stage, including:
- brand clearance and registrability advice
- responding to IP Australia objections
- coexistence negotiations
- trade mark enforcement and defence
Whether you are launching a new brand or facing a potential conflict, early, informed advice can make all the difference.
Final Takeaway
The High Court has sent a clear message: if you proceed with a trade mark after being put on notice of a conflict, you must be able to justify that decision as honest by objective standards – or risk losing the defence entirely.
If you’re facing a trade mark conflict, responding to an objection, or unsure how to move forward with your brand, Coleman Greig’s Intellectual Property and Brand Protection team can help – contact us today.
