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The Zip Co ruling closes off nearly 15 years of argument, writes Aparna Watal.
I examine the “trilogy” of IP cases from recent times in Australia – Bed Bath N Table, Katy Perry, and now Zip Co – to help brand owners understand the importance of IP and the lessons we can extract from these major cases.
Zip Co v Firstmac
The facts are worth knowing. Firstmac has been the registered owner of the word mark “ZIP” in respect of financial affairs since 2004. Zip Co’s founders independently chose the same name in 2012. They liked it as a short, catchy way to evoke fast movement, without knowing about Firstmac’s registration.
The critical moment came in October 2013. Before Zip Co had made a single use of the ZIP mark commercially, IP Australia’s examination process flagged Firstmac’s registration as a direct barrier to their own trademark application. They launched the following month anyway. By 2019, the business had grown to over $84 million in revenue and 1.3 million customers. But when Firstmac sued, that commercial success did not save them.
The High Court unanimously dismissed the appeal. The core finding: Zip Co could not show it had genuinely turned its mind to whether confusion would arise. That evidentiary gap was fatal. You cannot build a billion-dollar business on a contested name and later claim you were being honest. Honesty is assessed by the standard of decent people, and it is assessed at the time of each use, not retrospectively from a position of commercial strength.
Anchorage Capital Partners Pty Ltd v ACPA Pty Ltd
The honest concurrent use defence has been a source of genuine uncertainty since the Full Court’s 2018 decision in Anchorage Capital Partners Pty Ltd v ACPA Pty Ltd, which left open questions about the relevant date for assessing honesty and how much weight courts should give to knowledge and conduct over time. Those questions have been expensive to litigate. This decision closes them off.
The trilogy of IP wars: Bed Bath N’ Table, Katy Perry, and Zip Co
The decision is the last of the three High Court trademark cases considered over the last year, but certainly not the least of the three. In many ways, this may end up being the most doctrinally significant of the trilogy. Together with Bed Bath N’ Table and Katy Perry, it really goes to the broader question of when adoption and continued use of a brand crosses the line from commercially opportunistic to legally actionable.
What that trilogy tells us, read together, is that a valid registration is a real statutory monopoly. Fame does not override it, as Katy Perry discovered. Descriptive similarity does not automatically destroy it, as Bed Bath N’ Table found. And a history of aggressive commercial conduct does not immunise you from it, as Zip Co has learnt at considerable cost.
For brand owners and in-house counsel, the practical lessons are:
1. Search before you launch.
Document your reasoning, and if you find a conflict, get advice and record it at the time. A contemporaneous record of genuine belief – that your use would not cause confusion, that the markets are genuinely different, that customers would not be misled – is exactly what the court found missing in Zip Co’s case.
2. Don’t engineer your own ignorance.
Choosing not to search “for fear of what it might reveal” is not the same as genuine unawareness. Courts completely see through it.
3. Early registration and vigilant monitoring remain your strongest tools.
And if you already own a registered mark, this decision reinforces what your registration is worth. Firstmac’s mark, registered nearly a decade before Zip Co’s launch and used on an arguably different product, ultimately prevailed. The value of that discipline has now been confirmed at the highest level.
Zip Co will rebrand in Australia. That is the cost of getting this wrong.
Aparna Watal is a partner with Halfords IP.
