Thinking of Skipping a Trade Mark Search to Save Money

Credits: Marten Newhall (Unsplash)

The High Court’s Zip Decision Shows Why That Can Be a False Economy

When you are starting a business or launching a new product, there are plenty of things competing for your budget. There is the website, packaging, graphic design, marketing, domain names, product development and perhaps premises and staff. Then your lawyer suggests spending more money on trade mark searches before you commit to the new name.

It can be tempting to skip that step. Perhaps you have already Googled the name and cannot find anyone else using it. Perhaps the domain name is available, ASIC has allowed you to register the business name, or you simply think it would be cheaper to lodge a trade mark application and see what IP Australia says.

The recent High Court of Australia decision in Zip Co Limited v Firstmac Limited [2026] HCA 16, handed down on 13 May 2026, demonstrates why that approach can sometimes be a very expensive false economy.

The case is particularly interesting because Zip did not begin by deliberately copying somebody else’s brand. The problem was what happened after the company received information about an earlier trade mark and nevertheless proceeded with the ZIP brand.

What happened?

The story began back in 2012, when the founders of what became Zip Co were developing a buy now pay later business offering point-of-sale consumer credit.

In early 2013, Mr Gray searched the internet for the name “ZIP”. That search did not reveal that Australian non-bank lender Firstmac Limited already owned an Australian trade mark registration for the word ZIP, registered in 2004 in class 36 for “financial affairs (loans)”. Firstmac had used the mark on home loan products from 2005.

This is an important part of the story and the reason is that Zip’s founders had searched the internet, but they had not searched the Australian Trade Marks Register before settling on the name.

The fact that an internet search had not revealed Firstmac did not mean that Firstmac did not have enforceable trade mark rights.

The founders initially selected ZIP and ZIPMONEY without knowing about Firstmac’s registration. Had the story ended there, the legal position might have looked quite different.

But it didn’t.

What happened next?

Zipmoney was incorporated in June 2013. In August 2013, trade mark applications were filed for the ZIP MONEY and ZIP logo marks. In October of that year, before the business had actually started using the ZIP trade marks, IP Australia issued adverse examination reports.

Those reports identified Firstmac’s earlier ZIP registration and raised the potential conflict.

That was the critical moment.

Despite now knowing about the earlier registered trade mark, Zip proceeded to launch its consumer credit products under the ZIP brand in November 2013, just weeks later.

According to the findings discussed in the case, Zip did not obtain legal advice, respond to the adverse reports, or search the Trade Marks Register before it began using the marks.

The business then grew — enormously.

By 2019, Zip had more than 16,000 merchant partners and approximately 1.3 million customers. It had become an ASX-listed buy now pay later business with substantial goodwill tied to the ZIP name.

Firstmac commenced infringement proceedings in June 2019. By that point Zip had twice attempted, unsuccessfully, to have Firstmac’s registration removed from the Register for non-use.

The litigation then ran through three levels of court. At first instance in 2023, the Federal Court (Markovic J) found in Zip’s favour, holding that Zip had established honest concurrent use defences, and that composite marks such as ZIP PAY and ZIP MONEY were not deceptively similar to Firstmac’s mark. In March 2025 the Full Court of the Federal Court unanimously reversed that decision, holding that the composite marks were deceptively similar and did infringe, and that Zip had not proved honest concurrent use at the relevant time.

Zip appealed to Australia’s highest court.

Why did the High Court find against Zip?

The central issue before the High Court concerned what trade mark lawyers call “honest concurrent use”.

Section 44 of the Trade Marks Act 1995 (Cth) generally creates a problem for a later trade mark application where the mark is “substantially identical with, or deceptively similar to” an earlier registered trade mark in relation to relevant goods or services.

However, section 44(3)(a) provides an important exception. The Registrar may accept an application where satisfied:

“that there has been honest concurrent use of the 2 trade marks”.

That provision also matters to infringement. Sections 122(1)(f) and 122(1)(fa) provide that a person does not infringe a registered trade mark where the court is of the opinion that the person “would obtain registration of the trade mark in his or her name if the person were to apply for it” (or, in the case of paragraph (fa), would obtain registration of the substantially identical or deceptively similar mark they have used). A person can establish that they would obtain registration by satisfying the conditions in section 44(3) — including honest concurrent use.

The word honest matters.

The High Court unanimously dismissed Zip’s appeal. The key question was not whether Zip had innocently thought of the name in the first place, but whether its use was honest when the alleged infringement occurred. By the time Zip began using the mark in November 2013, it knew about Firstmac’s earlier registration.

Importantly, the Court described searching the Trade Marks Register before seeking registration as its:

“obvious and intended function”.

A failure to search does not automatically mean someone is dishonest. However, deliberately avoiding a search for fear of what it might reveal is another matter.

Zip also failed to provide sufficient evidence that, once the earlier mark was known, the relevant decision-maker had properly considered the risk of consumer confusion or that his failure to do so was not reckless.

What does this mean if you are choosing a new brand?

The practical lesson is not that every business must undertake every conceivable search before adopting a name. Nor does conducting a trade mark search provide an absolute guarantee that nobody will ever challenge you.

Rather, searching is about identifying and assessing risk before you invest heavily in the brand.

A Google search tells you what Google finds. A domain name search tells you whether a particular domain appears to be available. An ASIC registration tells you whether a business or company name can be registered under that system.

None of those things necessarily tells you whether somebody owns an earlier registered trade mark that could prevent you using your proposed brand.

As IP Australia itself warns, registering a business name does not give you exclusive rights to that name. Trade mark rights are a different issue.

What are the risks of skipping trade mark searches?

The most obvious risk is discovering an earlier trade mark after you have already launched.

At the beginning, changing a proposed brand may mean little more than choosing another name and asking your designer to amend a logo. Several years later, it can be an entirely different proposition.

Is Zip the only case where this has mattered?

No. Australian courts have considered honest concurrent use and competing trade mark rights on numerous occasions.

In McCormick & Company Inc v McCormick [2000] FCA 1335, for example, the Federal Court considered honest concurrent use in a dispute involving the McCormick name. That case confirmed that mere knowledge of an earlier trade mark does not, without more, preclude a finding of honesty — there, the later user was aware of the competing mark but did not believe confusion would be caused. It is also frequently referred to in considering the established factors relevant to honest concurrent use, including the honesty of the use, how long and extensively the mark has been used, the degree of possible consumer confusion, evidence of actual confusion and the relative inconvenience that may result.

Zip says that where a business knows of an earlier mark, it will need to be able to explain why its use was nevertheless honest — for example, because it genuinely believed consumers would not be confused, and can say why.

How we can help

Trade mark searches are more complex than simply checking whether an identical name appears on the Register. They require judgement about similar marks, relevant goods and services, and whether similarities in appearance, sound or meaning may create a problem.

Experience matters. Trade mark lawyers understand how IP Australia and the courts approach these issues and can often identify risks that may not be obvious from the search results alone.

We can conduct and interpret trade mark clearance searches and advise you on potential risks before you invest significantly in a new brand.

Please note the above article is general in nature and does not constitute legal advice.

Please email us info@iplegal.com.au if you need legal advice about your brand or another legal matter in this area generally.