Trade marks in Australia: Honest concurrent use

In this article, we discuss the recent Australian trade mark judgment of Zip Co Limited v Firstmac Limited (2026) HCA 15.

The legal issue

The issue – what exactly is the meaning of ‘honest concurrent use’, a concept that is set out in Section 44(3)(a) of the Australian Trade Marks Act 1994? It’s worth noting that the concept of honest concurrent use is known in various jurisdictions, including South Africa.

The facts of the case

In 2004, Firstmac registered the trade mark ZIP in Australia in class 36 for financial services, and the trade mark was in due course used in respect of consumer credit products. In 2013 a competitor, the Zip Companies, started using the term “ZIP MONEY” for consumer credit products. Firstmac sued Zip Companies for trade mark infringement.

Honest concurrent use

The trial judge held that the defence of honest concurrent use was appropriate, as per Section 122 (1)(f), as read with Section 44(3) of the Australian legislation.

Appeal to the High Court

Yet the Australian High Court dismissed an appeal by the companies Zip Co and Zipmoney (the Zip Companies) because there had been no proof of honest concurrent use alongside Firstmac Limited’s trade mark registration for ZIP.

Honesty

The judgment tell us that when it comes to trade marks, honesty is assessed at the ‘time of each potential infringement, not retrospectively’. It further tells us that the word ‘honest’ retains its ordinary meaning, which is a ‘subjective state of mind judged against objective community standards’.

An appeal to the Full Court

The case was taken on appeal and the Full Court of the Federal Court granted the appeal. It held that the Zip Companies had failed to prove honesty at the time of the first potential infringement in November 2013.

Legal issues that needed consideration

The legal issues to be considered were the following:

Must the honest concurrent use defence be assessed at the date of the first potential infringement (in this case November 2013), or at a later date, such as when the defence was filed?
What does the word ‘honest’ mean in this context, and what must an alleged infringer establish to succeed in such a defence under Section 44(3)(a).

The judgment of the Full Court

The court made the following findings:

The honest concurrent use (HCU) defence must be assessed at the time of any alleged potential infringement.
The time for assessment is the date on which the infringing conduct occurred.
Every occasion of use of a mark can be a ‘separate potential infringement, and the defence applies separately to each such occasion’.

Observations

The court referred to case law, and it made these observations:

Ordinary, decent people: the word ‘honest’ bears its ordinary meaning, in other words ‘a state of mind assessed by the standards of ordinary, decent people’.
Objective community standards: the issue of honest/dishonest conduct is ‘assessed against the objective community standards , not the person’s own subjective view of dishonesty’.
No confusion: honesty requires that the person has 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 trade mark’.
A failure to search: the alleged trade mark infringer needs to prove honesty – the High Court said that, although a failure to do registry searching does not equate to dishonesty, a ‘deliberate abstention from searching for fear of what it might revel may weigh against honesty’ .

Final remarks

The judgment has been referred to by some as a landmark decision, one that has clarified ‘previously unsettled’ aspects of the honest concurrent use defence. It’s suggested that the court’s decision that it is necessary to assess honesty at the time of each potential infringement provides much needed certainty.

In South Africa, applications based on honest concurrent use face a strict evidentiary burden, requiring detailed proof of the extent, manner, and duration of use of the mark. To maximize the prospects of success, it is prudent to instruct a qualified trade mark attorney to prepare the necessary affidavits and to carefully present the concurrent use evidence in a structured and persuasive way. This professional guidance ensures that the application meets the high evidentiary standards set by the Registrar and increases the likelihood of overcoming objections.

*Reviewed by Ilse du Plessis, Executive in ENS’ IP & Innovation Practice

Jade Courtney

Senior Associate | IP & Innovation

jcourtney@ENSafrica.com