ZIP Locked: Zip Co Fights on as Trade Mark Tug-of-War Heads to the High Court

Firstmac’s long-running dispute with Zip Co over the word “ZIP” has taken another sharp turn—this time with Zip Co applying for special leave to appeal to the High Court.

At stake? Whether “honest concurrent use” under s 44(3) of the Trade Marks Act 1995 (Cth)—as invoked via s 122(1)(f) to establish a defence to infringement—is to be assessed through the eyes of the actual user, or must pass muster under an “honest and reasonable person” standard.

In other words: is honesty in the eye of the beholder, or the court?

A Quick Zip Through the Facts

Firstmac, a large non-bank lender, has owned the registered trade mark for “ZIP” in connection with loans since 2004. Zip Co, meanwhile, entered the scene in 2013 with its now-ubiquitous “buy now, pay later” service—branded under names like Zip Pay and Zip Money.

Zip Co’s defence to Firstmac’s infringement claim leaned heavily on “honest concurrent use”—essentially arguing that even if the marks are deceptively similar, the use was honest, longstanding, and concurrent, and would have justified registration in its own right.

At first instance, Justice Markovic bought that argument. But the Full Federal Court didn’t.

The Appeal: A Matter of Perspective

In Firstmac Limited v Zip Co Limited [2025] FCAFC 30, the Full Federal Court (Perram, Katzmann and Bromwich JJ) reversed the primary decision and allowed Firstmac’s appeal. Critically, the Court held that the defences under section 122(1)(f) and (fa) had not been made out.

Why? Because Zip Co could not demonstrate that their use of the ZIP-formative marks (like “ZipMoney”) was honest—particularly after having received adverse examination reports in 2013 that expressly flagged Firstmac’s existing ZIP mark. Despite this, Zip Co forged ahead without legal advice, launching their branded services anyway.

The Full Court accepted that “honest concurrent use” involves a subjective inquiry—but with an objective overlay. As Perram J put it, “[T]he concept of honest use is in terms of a subjective inquiry, [but] this Court has accepted that it has an objective element.” Users must act as an “honest and reasonable person” would in assessing whether they can use a mark. The failure to do so may be fatal to the defence—even if there’s no affirmative finding of dishonesty.

The High Court Question: Honesty, Who Decides?

Zip Co’s special leave application to the High Court squarely challenges the Full Federal Court’s insistence on an objective overlay. They argue that “honest” in “honest concurrent use” should be determined subjectively—based on the user’s actual state of mind at the time of use—not by importing a “reasonable person” test.

To support this, Zip Co draws a comparison with a different high-profile case: the Katy Perry trade mark dispute with Australian fashion designer Katie Taylor. In that case, the issue of honest belief in non-infringement was similarly coloured by the subjective intention of the user—though not necessarily determinative.

Whether the High Court will grant leave and ultimately refine the contours of the “honest concurrent use” defence remains to be seen. But the outcome could reshape the risk calculus for trade mark users who proceed in the shadow of prior marks—particularly in an era of increasing brand overlap and digital ubiquity.

Why It Matters

The appeal goes to the heart of trade mark enforcement in Australia: Should a trader’s actual state of mind be enough to excuse an infringing use — or must they also act with the caution and diligence of a reasonable person?

For now, the “honest concurrent use” defence remains a high bar. But if Zip Co gets its leave — and succeeds — the standard might shift from “reasonable conduct” to “honest intentions.” That would make “honesty” not just a defence, but a question of perspective.

Stay tuned.

Energy Drinks, Trade Mark Battles and a Bunch of Bull

If there’s one thing Red Bull hates more than caffeine-free soft drinks, it’s brand drift. And the latest target of its energy-charged enforcement? A would-be beverage mark from China: SeaBull.

In a decision handed down on 5 June 2025, a delegate of the Registrar refused Shandong Fokun Investment Co’s SeaBull trade mark application — finding it deceptively similar to Red Bull’s registered trade marks under s 44 and reg 4.15A of the Trade Marks Act 1995.

The result? SeaBull joins the long list of Red Bull casualties. When it comes to any other “bull” in the beverage ring, Red Bull’s horns are always up.

The trade mark at issue was the simple word mark SeaBull applied for by Shandong Fokun Investment Co., Ltd on 10 November 2022 in class 32 for non-alcoholic drinks including energy drinks.

The applicant claimed “marine extract” inspiration for the name and tried to distance itself from any reference to Red Bull.

Nice try.

Red Bull’s opposition strategy was as charged as their drinks:

• Reputation: Global market leader, sold in 174 countries, with a dominant presence in Australia since 1999.

• Evidence: Brand Finance rankings, Aussie revenue and market share stats, and an empire of media assets — from Red Bull Racing to Red Bull Records.

• Registrations: Relied primarily on IR 1566986 — a stylised BULL mark registered for Class 32 beverages.

The delegate found that, although the competing marks were not substantially identical:

“The suffix ‘Bull’ is identical in substance… aurally, it comprises one of only two syllables… visually, the word ‘Bull’ is emphasised.”

While the addition of the word Sea tried to add a salty twist, it didn’t do enough to dilute the central BULL impression. The delegate found:

• Consumers are likely to read it as Sea + Bull (not a singular new word).

• “Bull” remains the essential, memorable element.

• Conceptually, SeaBull still evokes the idea of a bull — not something distinct enough to overcome the similarities.

The outcome: Real and tangible risk of confusion → Ground under s 44 established.

The applicant didn’t bother to show up to the hearing and didn’t provide evidence of honest concurrent use, prior use, or other extenuating circumstances. That made the path to refusal even smoother.

It’s difficult to win a case when you don’t adduce any evidence and don’t show up – just saying …

Red Bull won the case and, of course, received an order for its costs too.

🧠 IP Mojo Takeaways

• Adding a prefix won’t save you if the remaining mark is dominant and matches a well-known trade mark.

• Red Bull’s enforcement strategy isn’t just for copycats — even marginal similarities to the word BULL in Class 32 can trigger a full opposition.

• For global brands, consistent evidence of market presence, brand diversification, and registered rights are still the gold standard in trade mark opposition proceedings.

In the end, the only thing SeaBull gave Red Bull was another notch on its IP enforcement belt. For smaller beverage players looking to carve out their own brand, the message is clear:

Don’t poke the bull.