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What Zip Co Limited v Firstmac Limited [2026] HCA 16 Means for Honest Concurrent Use in Australia
The High Court’s decision in Zip Co Limited v Firstmac Limited [2026] HCA 16 is now the leading Australian authority on the honest concurrent use defence in Australia.
The case clarifies two issues that had generated uncertainty for years:
- when honesty should be assessed for the purpose of trade mark infringement
- what “honest” means for the purpose of the Trade Marks Act 1995.
In practical terms, the decision makes the honest concurrent use defence narrower and harder to establish even when no commercial confusion or deception has arisen. It also sends a clear warning to businesses adopting new brands: if there is a known trade mark risk at the outset, it cannot easily be cured by later commercial success, continued use, or retrospective explanations.
The takeaway for those launching a new brand is to investigate early, seek advice promptly, and not assume that continued use can cure a problem that existed from the start. It will also be important to keep good evidentiary records of the reasons why you adopted a trade mark.
The statutory setting
Honest concurrent use has long operated in two connected ways under Australian trade mark law. First, under s 44(3), it can justify acceptance of a trade mark application despite the existence of an earlier conflicting registered mark.
Secondly, through ss 122(1)(f) and 122(1)(fa), it can operate as a defence to infringement if the alleged infringer can show that it would obtain registration of its mark were it to apply for it.
The difficulty for these sections has always been in determining what constitutes “honest” use and identifying the point in time at which honesty must be examined.
What the High Court decided
Meaning of honesty
The Court held that “honest” in s 44(3)(a) bears its ordinary meaning i.e. did the user have a state of mind that was honest by the standards of ordinary, decent people. This is to be assessed subjectively by assessing the state of mind of the Applicant against the standards of ordinary decent people.
It is necessary to show that the person “had a genuine belief that use and adoption of its mark would not be likely to cause confusion, or in some way trade off the goodwill of the earlier registered mark”. But this alone, may not be sufficient.
It is also important to consider the person’s knowledge of the prior mark. Mere knowledge will not preclude a finding of honesty if the Applicant had a genuine belief confusion would not arise. Equally, a person may need to convince a court that they did not deliberately abstain from searching the Register for fear of what it might reveal. A search of the trade mark register and seeking of legal advice are both steps an honest and reasonable person would take.
Time of assessing honesty
The High Court confirmed that honest concurrent use is assessed at the time of each alleged potential infringement, beginning with the first act of use said to infringe. That means the inquiry is not directed primarily to the date of trial, the date the defence is raised, or some broader period of commercial coexistence viewed in hindsight. If the alleged infringer cannot establish honesty at the time the mark was first used in a potentially infringing way, later events will ordinarily not rescue the defence.
For a trade mark application, a claim of honest concurrent use must be assessed at the time of examination. However, the honesty element must be assessed as at the date of the first use of the relevant trade mark by the applicant and throughout the period of concurrent use.
Why Zip failed
The facts were critical. Zip had received adverse examination reports from IP Australia identifying Firstmac’s earlier ZIP registration as an obstacle to registration. Despite that warning, Zip proceeded to launch and continue using ZIP-branded marks without properly engaging with the obstacle at the relevant time. The High Court treated that knowledge as highly significant. While knowledge of an earlier mark is not automatically fatal in every case, a trader who knows there is a likely legal impediment and presses on without adequately addressing it will face real difficulty in proving honesty.
The decision therefore distinguishes between mere awareness of another mark and awareness of a material risk to the legitimacy of one’s own use. A person may still prove honesty where they know of another mark but genuinely and reasonably believe that concurrent use is legitimate and non-confusing. But where the evidence shows that warnings were received and effectively ignored, the defence is unlikely to succeed.
Implications for litigation and prosecution practice
In infringement litigation, the case strengthens the position of registered owners confronting a later user who adopted a mark after receiving notice of a conflict. For defendants, it raises the evidentiary bar. It will be important to show, through evidence, what was known, what inquiries were made, what advice was sought, and why continued use was thought legitimate.
In prosecution practice, the decision is equally significant because the reasoning on honesty under s 44(3) is likely to influence how applicants and the Registrar frame honest concurrent use arguments at examination stage.
More broadly, the judgment aligns the doctrine with a policy of encouraging careful brand adoption rather than rewarding risk-taking. It does not abolish honest concurrent use. The doctrine still has work to do in cases of genuinely independent adoption, long-standing parallel trading, or situations where parties can show a bona fide and commercially reasonable basis for believing coexistence is legitimate. But after Zip Co v Firstmac, the doctrine is less forgiving of inattention, strategic indifference, or delay in addressing obvious trade mark problems.
Comparison with New Zealand
Under s 26 of the Trade Marks Act 2002 (NZ), honest concurrent use operates primarily as an exception to the relative grounds for refusal in s25.
However, the approach taken to honest concurrent use in New Zealand does differ from the approach outlined in the Zip Co decision.
In Luiga Lavazza S.p.A. v Cantarella Bros Pty Limited [2025] NZHC 175 (14 February 2025), the High Court disagreed with the Assistant Commissioner’s finding that Lavazza was not acting in a commercially honest manner when it moved to increase the prominence of the word ORO In its branding.
Cantarella had submitted Lavazza changed its packing in full knowledge of Cantarella’s ORO mark. The evidence disclosed a clear decision to increase the prominence of the word ORO. Moreover, Lavazza’s internal discussion documents, which preceded the rebrand, included at least one photograph of Cantarell’s Vittoria ORO packaging (alongside photographs of numerous other brands that compete in the Australasian market).
Despite this, the High Court states:
I have no reason to doubt Lavazza was acting in good faith throughout. As noted above, Lavazza is a global coffee giant, far larger than Cantarella. Its rebranding exercise was a worldwide one. There is no evidence its rebranding was driven by an attempt to emulate Cantarella’s branding, or to induce consumers to confuse the two products.
ORO is a strong and aurally appealing word, and its effectiveness in the marketing of coffee is unsurprising. It had been part (albeit not a dominant part) of Lavazza’s Qualità Oro branding for decades. My reading of Lavazza’s internal material is that it was seeking to standardise its packaging around the world while independently deciding (many years after Cantarella reached the same conclusion) that the word ORO should dominate its branding. The fact it settled upon a mark which was strikingly similar to Cantarella’s existing mark does not, of itself, indicate an absence of good faith. It is more likely Lavazza independently had the same idea as Cantarella, albeit some years after the latter registered its mark.
So in this case, the knowledge of the Cantarella’s mark at the time of increasing its presence of the ORO brand on its packaging was not sufficient to say the adoption of the mark was not honest.
Despite this, the honest concurrent use defence failed as there was a high likelihood of confusion between the marks and there had not been a sufficient period of coexistence in the market before Cantarella took formal objection.
So, for now, the New Zealand practice appears more balanced, taking into account a wider range of factors, than the Australian approach after Zip Co v Firstmac, which places sharper emphasis on proving honesty at the time of adoption and first potentially infringing use.
Whether New Zealand will follow Australia’s approach in future remains to be seen.
Settlement of the dispute
Since the Zip Co v Firstmac decision came out in May, the parties have settled the dispute with Zip Co acquiring Firstmac’s registration for the ZIP trade mark. This settlement will allow Zip Co Limited to continue to use the ZIP brand in Australia.
Zoe Dewhurst - June 2026
