The long-awaited judgement of the Full Court of the Federal Court of Australia was handed down in Firstmac Limited v Zip Co Limited [2025] FCAFC 30 on 19 March 2025, highlighting the importance of completing due diligence before using a new brand, and considering the principle of honest concurrent use in the context of a defence to trade mark infringement.
The appeal judgement comes some 17 months following the hearing before the Full Bench comprising of Justices Perram, Katzmann and Bromwich. The case concerned an appeal by Firstmac Limited (Firstmac), from a decision at first instance by the primary judge, Justice Markovic, who dismissed Firstmac's claims of trade mark infringement. The primary judge also upheld an application by the Respondents, Zip Co Limited and Zipmoney Payments Pty Ltd (collectively, Zip Co), for the removal of Firstmac's trade mark registration and allowed part of a cross-claim where Zip Co sought the cancellation of Firstmac's trade mark registration.
In the appeal, Firstmac sought to have (a) the primary judge's orders set aside; (b) declarations for infringement made as well as orders for injunctions and costs; and (c) the dismissal of Zip Co's cross-claim and non-use application.
On appeal, Firstmac was successful on all grounds. Some of the key findings of the Full Court are summarised below:
Infringement
Firstmac is the owner of a trade mark registration for ZIP (Firstmac Mark) in class 36 for "financial affairs (loans)".
The primary judge held that the ZIP formative marks used by Zip Co (for example, ZIP IT, JUST ZIP IT, ZIP BILLS and CAN I ZIP IT?) (collectively, ZIP Formative Marks) were not deceptively similar to ZIP.
In particular, the primary judge held that the similarity between the Firstmac Mark and each of the ZIP Formative Marks begins and ends with the use of the word "ZIP". Because the ZIP Formative Marks include an additional word (or words), being ordinary descriptive English words, her Honour found that they operated to distinguish the ZIP Formative Marks from the Firstmac Mark both visually and aurally to the notional buyer. Her Honour did not accept that the essential feature in each of the ZIP Formative Marks was the use of "ZIP", instead giving the words in the ZIP Formative Marks equal weighting.
The Full Court overturned the primary judge's findings of deceptive similarity and in doing so found that the ZIP Formative Marks were deceptively similar to ZIP.
Defences
Zip Co relied on the 'honest concurrent use' and good faith use of a business/company name defences to trade mark infringement.
The primary judge, in upholding the honest concurrent use defence, made the finding that Zip Co's adoption of the ZIP and ZIP MONEY marks, which took place before they became aware of the Firstmac Mark, was honest. Her Honour placed little weight on the absence of any search of the Register or on the adverse examination reports from IP Australia which cited the Firstmac Mark and were received a month before Zip Co proceeded to use the ZIP and ZIP MONEY marks.
The primary judge also found that the additional defence of use of a business/company name in good faith had also been made out, relying upon the findings of 'honesty' for honest concurrent use.
The Full Court overturned the primary judge's findings and held that the defences relied upon by Zip Co had not been established.
In arriving at this decision, the Full Court recognised that this wasn't a case where Zip Co started using its marks and only then discovered that those marks were likely to infringe. Rather, Zip Co was on notice of the Firstmac Mark before its first use when adverse examination reports issued against their pending trade mark applications. Zip Co launched their services in the face of those adverse reports.
The Full Court held that as the requirement of "honesty" is not merely an absence of dishonesty, but the presence, objectively ascertained, of honesty, it was not for Firstmac to show that Zip Co's internet searches were inadequate. Rather, the onus was on Zip Co to establish that use of its ZIP marks on the basis of those internet searches alone was sufficient "in all circumstances" to establish honestly for the purposes of 'honest concurrent use'. The Full Court found that that onus was not discharged.
Accordingly, whilst Zip Co may have adopted the ZIP and ZIPMONEY marks prior to their knowledge of the Firstmac Mark, Zip Co had express knowledge of the Firstmac Mark at the time of its first use. The parties made submissions on appeal as to the correct time for assessing honesty for the purposes of 'honest concurrent use', but the Full Court did not consider it necessary to make a determination on that issue where it found that honesty had not been established at all.
Non-use Application
The Full Court overturned the primary judge's findings on Zip Co's non-use application against the Firstmac Mark. In doing so, the Full Court found that Firstmac's use of ZIP via a related company, Loans.com.au Pty Ltd, was sufficient to defend against Zip Co's non-use application.
The Full Court also found that the examples of use illustrated that the Firstmac Mark was being used by Firstamc as a trade mark, rather than (as Zip Co argued, and was held by the primary judge) as a descriptor of the particular type of home loan i.e. a home that could be paid off faster and in connection with which there was a zero (or zip) interest free Visa debit card.
Cancellation
The primary judge had also allowed the cancellation of the Firstmac Mark under s88(1) of the Trade Marks Act (Cth) 1995 (TMA), relying on s88(2)(c) of the TMA, which permits the Court to remove a trade mark that is likely to deceive or cause confusion.
S89(1)(c) of the TMA however provides a discretionary power for the Court not to grant an application for rectification made under s88(2)(c) if the registered owner of a trade mark can satisfy the Court that the ground relied on for rectification has not arisen through any act or fault of the registered owner. The primary judge did not exercise her discretion. The key factor which ultimately weighed in favour of the primary judge not exercising her discretion was that there was no finding infringing conduct by Zip Co (by reasons of her Honour upholding the defences of honest concurrent use and good faith use of a business name). The Full Court found that that "was at least a serious error of fact sufficient to cause the discretion to miscarry".
The parties have 28 days from the date of the judgement to provide to the Court agreed or competing declarations and orders to give effect to the reasons (including injunctions).
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