Firstmac Limited v Zip Co Limited

Division: General Division

Registry: New South Wales

National Practice Area: Intellectual Property

Sub-area: Trade Marks

Date of hearing: 8 - 11 March 2022

Counsel for the Applicant/Cross-Respondent: Mr RJ Webb, Mr H Bevan SC and Dr WA Rothnie

Solicitor for the Applicant/Cross-Respondent: Spruson & Ferguson Lawyers

Counsel for the Respondents: Mr T Bannon SC and Mr L Merrick

Solicitor for the Respondents: King & Wood Mallesons

Solicitor for the Cross-Claimant: Mr RJ Webb SC, Mr H Bevan SC and Dr WA Rothnie

Solicitor for the Cross-Respondent: Spruson & Ferguson Lawyers

BETWEEN: FIRSTMAC LIMITED Applicant

AND: ZIP CO LIMITED First Respondent

ZIPMONEY PAYMENTS PTY LTD Second Respondent

AND BETWEEN: ZIP CO LIMITED Cross-Claimant

AND: FIRSTMAC LIMITED Cross-Respondent

order made by: MARKOVIC J DATE OF ORDER: 29 May 2023

1. The parties are to confer and within seven days of the making of these Orders provide to the Associate to Markovic J proposed orders giving effect to these reasons.
2. Insofar as the parties are unable to agree to the terms of the proposed orders referred to in Order 1 above, including the appropriate order as to costs, the areas of disagreement should be set out in mark up in the draft to be provided.
3. In the event that the parties are unable to agree on the proposed orders the proceeding be listed for case management hearing on 6 June 2023 at 9.30 am AEST for argument on the form of orders.
4. The text of the reasons for judgment published today is to be published and disclosed only to the parties and their legal advisors.
5. By midday AEST on 31 May 2023 the parties are to inform the Associate to Markovic J whether: (a) the proposed redactions (shown in yellow highlight) at [344] of and Annexure B to the reasons published in accordance with Order 4 above are to be maintained having regard to the Orders of the Court made on 9 March 2022 (s 37AF Orders); and (b) they propose any further redactions as a result of the s 37AF Orders.

6. The reasons for judgment will be published on 1 June 2023 at 9.00 am AEST and any redactions made in the reasons are made in accordance with the s 37AF Orders which remain in place for 14 days from the date of publication of these reasons. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Table of Contents Facts [7] The witnesses [7] The Firstmac Group [9] Firstmac's products and services [14] Firstmac's ZIP home loan - 2005 to 2014 [19] The September 2014 Origination Agreement [33] Re-introduction of the ZIP home loan in 2018 [37] Loans.com.au and the 2018 ZIP home loan [53] Mr Gration becomes aware of the Zip Companies [58] The Zip Companies [61] The development of the ZIP business [63] 2013 trade mark applications [80] Internet searches [95] Rubianna Resources Limited and the reverse takeover [98] 2015 trade mark applications [106] The ZIP business [116] Promotion of ZIP and the Zip Products [129] ZIP Websites [140] Zip App [145] Social media [148] 2018 rebrand [153] The "nothing comes between me and my" campaign [158] Current trade marks and pending applications [163] First awareness of Firstmac [165] Attempt to contact Firstmac [170] Proceeding before the Registrar of Trade Marks [172] 2021 rebrand [176] Inconvenience if the ZIP business was required to rebrand [178] Firstmac's infringement claim [182] Statutory framework and legal principles [188] The Zip Companies' submissions [194] Substantially identical [198] Deceptive similarity [208] Defences [225] Section 122(1)(f) and (fa) of the TM Act: the Zip Companies would obtain registration in their own name [226] Legal principles [229] Consideration [237] Section 122(1)(a) of the TM Act: use of own name in good faith [272] Estoppel, acquiescence, delay or laches [285] Conclusion on Firstmac's infringement claim [300] The Zip Companies' non-use application [304] Legislative framework and legal principles [307] Consideration [312] Should the Applicant's Mark be removed from the Register? [353] Conclusion on the second non-use application [365] Cross-claim [366] Cancellation under s 88(2)(c) of the TM Act [367] Is use of the Applicant's Mark likely to deceive or cause confusion? [371] Should the Register be rectified by cancellation of the Applicant's Mark? [379] Section 129 of the TM Act [396] The parties' submissions [401] Consideration [405] Conclusion on cross-claim [413] Conclusion [414]

MARKOVIC J: 1 Firstmac Limited, the applicant, is part of the Firstmac group of companies (Firstmac Group). The Firstmac Group is Australia's largest non-bank lender and provides a number of financial products and services including home loans, car loans and investment funds. 2 Firstmac is and has been the registered owner of trade mark no. 1021128 (Applicant's Mark) for the word ZIP in respect of "financial affairs (loans)" in class 36 (Services) since 20 September 2004. 3 Zip Co Limited and Zipmoney Payments Pty Ltd, the first and second respondents respectively (who I will refer to collectively as the Zip Companies), operate a predominantly closed loop retail platform which is a point-of-sale unsecured line of credit product for retail consumers and a service provider, including a provider of digital payment services, to retail businesses. The platform is predominantly closed loop because it can only be used by consumers with a Zip account (Customers) to pay for goods and services from a merchant who has been accredited by, and has a contractual relationship with, Zipmoney Payments (Merchant). 4 As described below the Zip Companies promote their services under the trade mark ZIP or variants of it such as ZIP MONEY and ZIP PAY, including stylised versions of that branding. It is that fact which has led to this proceeding. 5 In summary: (1) Firstmac alleges that by the Zip Companies' use of ZIP and other variants of it as a trade mark they have infringed the Applicant's Mark contrary to s 120(1) of the Trade Marks Act 1995 (Cth) (TM Act). The Zip Companies admit that the name and trade mark ZIP is substantially identical to the Applicant's Mark and admit infringement by use of that mark subject to their defences, their cross-claim and their application for non-use. They otherwise deny that they have infringed the Applicant's Mark by reason of their use of the ZIP mark in its stylised forms or the variants thereof either in plain or stylised form; (2) in their defence, the Zip Companies plead positive defences under s 122 of the TM Act. They contend that they have not infringed the Applicant's Mark because they used in good faith their own name (s 122(1)(a) of the TM Act) and/or they would obtain registration of the mark if one or other of them was to apply for it either on the basis of honest concurrent use or because of other circumstances it would be proper to do so (ss 122(1)(f) and (fa) of the TM Act). The Zip Companies also contend that Firstmac is precluded from obtaining relief because of estoppel, acquiescence, delay and/or laches; (3) by their cross-claim the Zip Companies seek rectification of the Register of Trade Marks by cancellation of the Applicant's Mark pursuant to s 88(2)(c) of the TM Act because as at 15 August 2019, the date on which the cross-claim was filed, Firstmac's use of the Applicant's Mark would be likely to deceive or cause confusion as a result of the Zip Companies' reputation and goodwill at that time; and (4) a (second) non-use application filed by the Zip Companies with the Registrar has been referred to the Court for determination. In that application the Zip Companies contend that Firstmac did not at any time from 22 February 2016 to 22 February 2019 (second non-use period) use the Applicant's Mark in Australia in relation to the Services or use it in good faith. 6 On 15 July 2019 I ordered that all issues of quantum and of any pecuniary relief are to be heard and determined separately from and after all issues of liability.

The witnesses 7 Firstmac led evidence from the following witnesses: (1) David Gration who is the general manager, sales and operations of Firstmac. Mr Gration joined Firstmac in December 2011 by which time he had over 20 years' experience in retail banking including in senior management roles at the National Australia Bank and Suncorp. Prior to his current role Mr Gration held the following roles at Firstmac: from about 2 December 2019 to 9 November 2013, head of legal, risk and compliance; from about 19 November 2013 to 23 November 2015, general manager sales and marketing; and from about 23 November 2015 to 19 July 2017, general manager sales and marketing. Mr Gration also acted in the position of managing director of Loans.com.au Pty Ltd, a member of the Firstmac Group, when the person who held that role was on maternity leave. Mr Gration was cross-examined; (2) Tiska Sudarmana who is the product manager of Firstmac. Ms Sudarmana commenced her employment with Firstmac in February 2012 in the role of customer services officer. Insofar as that role was customer-facing, she was responsible for providing support or explanation to borrowers who contacted Firstmac with inquiries in relation to, for example, changes in interest rates, different repayment types and queries about refinancing existing loans to a different lender. Since February 2016 she has had the role of product manager. In that role she oversees a small team responsible for preparing and distributing product specifications which set out details of Firstmac's new financial products and services and updates for existing products. She is also responsible for reviewing and approving any requests from originators, brokers, aggregators or managers for product variations. Ms Sudarmana was cross-examined; (3) Samantha Elizabeth Pendrey who since 4 March 2019 has held the role of retail sales team leader with Loans.com.au. In that role Ms Pendrey assists in the day to day management of her team of about 23 sales staff in the promotion of the financial products and services offered by Loans.com.au. Prior to taking on her current role Ms Pendrey held the following roles: from about 27 February 2017 to 2 August 2018 she was a lending manager, which required her to speak to customers, i.e. potential or existing borrowers, to promote the financial products and services offered by Loans.com.au; and from 2 August 2018 to 4 March 2019 she was a senior lending manager, a role in which she had the same responsibilities as her previous role but with additional responsibilities. Ms Pendrey was not cross-examined; and (4) Jacqueline Jessica Chelabian, a solicitor in the employ of Spruson & Ferguson Lawyers Pty Ltd, Firstmac's solicitors, who gave evidence about trade mark searches she undertook of the databases maintained by the United Kingdom Intellectual Property Office and the Intellectual Property Office of New Zealand and in relation to printouts obtained from the Wayback Machine of IP Australia's website. Ms Chelabian was not cross-examined. 8 The Zip Companies led evidence from the following witnesses: (1) Peter Gray who is chief operations officer, co-founder and a director of Zip Co and a director of Zipmoney Payments. Together with Larry Diamond, Mr Gray has been and is responsible for the commercial functions and operations of Zipmoney Payments. He also oversees the day to day operational and administrative functions of the business operated by Zip Co. For much of his career, commencing in 1990, Mr Gray worked in the finance industry. Most recently and prior to founding Zipmoney Payments he worked at Australia Finance Direct for about 12 years including as general manager for four years. Mr Gray was cross-examined; and (2) Mr Diamond who is managing director, chief executive officer and co-founder of Zip Co and Zipmoney Payments and a director of Zipmoney Payments. Prior to founding the Zip Companies Mr Diamond worked for about 12 years in retail, information technology (IT), corporate finance and investment banking including in that period for Pacific Brands, Macquarie Capital and Deutsche Bank. Mr Diamond was cross-examined.

The Firstmac Group 9 As set out above, Firstmac is part of the Firstmac Group. That group comprises several companies and trusts including Firstmac Origination Pty Ltd, Loans.com.au and www.Loans.com.au Pty Ltd. Firstmac's financial products and services, broadly described at [1] above, are promoted, offered and provided to customers through two distribution channels. First, by Firstmac accredited mortgage brokers who promote and offer for sale its financial products under Firstmac's corporate branding; and secondly, by mortgage originators, such as Loans.com.au, and mortgage managers who provide a direct retail channel and promote Firstmac's financial products under the corporate branding of the particular originator or mortgage manager. 10 Each of the mortgage brokers, mortgage managers and mortgage originators within the distribution channels work with members of Mr Gration's team at Firstmac who, in turn, report to him. That enables Mr Gration to monitor and evaluate the success of the distribution channel in promoting and offering Firstmac's products and to make executive decisions such as determining which of Firstmac's products are to be offered, or are to continue to be offered, to certain distribution channels and the specifications of the products. 11 Over the last 40 years Firstmac has provided over 100,000 home loans. It currently manages $12 billion in mortgages and $250 million in cash investments. Firstmac self-funds its operations through the release of highly rated residential mortgage backed securities (RMBS) and has issued more than $20 billion in RMBS bonds since 2003. The Firstmac Group has also received international ratings agency Standard & Poor's highest possible ranking for loan serviceability. 12 Firstmac has offices in Sydney, Melbourne and Brisbane, with its head office located in Brisbane. There are approximately 200 staff members located at Firstmac's head office of whom around 140 are employees of Firstmac and around 60 are employees of Loans.com.au. Relevant managers at Firstmac and Loans.com.au, including those working with mortgage brokers, mortgage managers and mortgage originators ultimately report to Mr Gration in relation to the products that are promoted and marketed by Firstmac and, on its behalf, by Loans.com.au. The nature of the reports Mr Gration receives include: (1) the number of home loans "sold", which is the number of home loan applications filed; (2) the value of those applications; (3) the number of applications that proceed to approval; (4) the quality of the applications received; and (5) the performance of loans, prior to and after settlement. This identifies the number of loan applications which have been correctly or falsely completed and whether there are, and if so, the details of, any default in the repayment of a loan by a borrower. These reports allow Mr Gration to monitor and evaluate the success of Firstmac's products. 13 In his current role as general manager of sales and operations, Mr Gration oversees the sales and operations of Firstmac's products and services and the retail and third-party sales of those products and services through the different distribution channels. In particular: (1) for matters pre-settlement he provides sales and support, focusing on the processing of Firstmac's products and services through to settlement or the establishment of new services. He also approves the structure and requirements of Firstmac's products and the final form of any documents, such as rate sheets, sent within the Firstmac Group and to third parties and oversees and monitors all matters from the point-of-sale to approval of an application; (2) for matters post-settlement, he provides contact centre support which focuses on queries about Firstmac's products and services, queries about accounts and repayments and queries about the variations to terms of Firstmac's products and oversees loan administration and the collection teams and business functions, including monitoring and reviewing the progress of home loans and any defaults in payments; and (3) he oversees the IT team, which builds the systems and supports the underlying infrastructure for Firstmac to offer and provide its products and services, and the legal team.

Firstmac's products and services 14 Firstmac's financial products and services are promoted, funded, serviced and managed by Firstmac and, in part, depending on the distribution channel, through its originators, such as mortgage brokers, mortgage managers and mortgage originators, under origination and management agreements with Firstmac. 15 Mr Gration describes the various originators referred to in the preceding paragraph as follows: (1) mortgage brokers are an intermediary who broker mortgage loans on behalf of Firstmac and its competitors. The broker prepares the loan application and submits it to Firstmac for its approval. Once the loan is approved and settled the borrower's ongoing servicing relationship for the term of the loan is directly with Firstmac; (2) mortgage managers promote and offer Firstmac products under their own corporate branding, process loan applications through to approval and settlement by Firstmac and then service the loan until such time as it is repaid in full. The mortgage manager remains the intermediary between the borrower and Firstmac during the term of the loan; and (3) mortgage originators are similar to mortgage managers in that they promote and offer Firstmac products under their own corporate branding and process loan applications through to approval and settlement by Firstmac. However, Firstmac then services the loan. It does so under the corporate branding of the mortgage originator, until such time as the loan is repaid in full. The mortgage originator relies on Firstmac to take on all aspects of the home loan process from the date of settlement. This requires a backend IT banking system which allows Firstmac to provide the funding, ongoing servicing and management of the home loans, including generating statements, and meeting compliance and reporting requirements. Borrowers are provided with various telephone numbers, depending on the nature of their query, some of which are dealt with by Firstmac employees who respond to incoming inquiries as representatives of the mortgage originator. 16 Firstmac Origination operates Firstmac's mortgage origination program under the control and direction of Firstmac. All mortgage originators and mortgage managers enter into an origination and management agreement with Firstmac Origination. 17 Firstmac also conducts all collection activities for its mortgage managers and mortgage originators and takes on the primary role of communicating and dealing with a borrower when the borrower has defaulted on a repayment. 18 Firstmac creates, structures and funds its products. This includes setting the requirements for each product and outlining any policies to ensure that any loan application complies with those requirements and Firstmac can ensure that any credit arranged by it through its mortgage managers and mortgage originators is not unsuitable for the borrower. Mr Gration explained that credit will usually be considered unsuitable where the borrower cannot pay or can only pay the credit with substantial hardship or the credit will not meet the borrower's requirements and objectives. Firstmac is required to approve any changes to its products and to approve any loan application filed on behalf of a borrower.

Firstmac's ZIP home loan - 2005 to 2014 19 Mr Gration understands that Firstmac first promoted and offered home loan products and services, such as term loans and lines of credit, under and by reference to the Applicant's Mark in early 2005 (I will refer to this product as the original ZIP home loan). 20 The original ZIP home loan comprised a suite of home loan products including ZIP Fulldoc LOC, ZIP Fulldoc Term Loan, ZIP LoDoc LOC, ZIP LoDoc Term Loan, ZIP NoDoc LOC and ZIP NoDoc Term Loan. The terms "Fulldoc", "LoDoc", "NoDoc", "LOC" and "Term Loan" are descriptive of the type of loan product being offered and are, as explained by Mr Gration, common terms in the trade. Fulldoc, LoDoc and NoDoc mean "full documentation", "low documentation" and "no documentation" loans respectively and LOC and Term Loan mean "line of credit" or standard time based "term" loans respectively. 21 The original ZIP home loans require ongoing management and servicing, including the maintenance and operation of borrowers' accounts for the loan and the direct debit card loan. The original ZIP home loans have a maximum term of 30 years and, for the line of credit options, a ZIP Visa account (with a ZIP Visa debit card) which can be used by the borrower, for example, to pay off regular bills and living expenses, and a redraw option, which means that the borrower has the option to pay off the loan more quickly, plus redraw up to the loan balance limit for the term of the loan. These features require an ongoing commercial relationship between Firstmac, the mortgage manager/mortgage originator and the borrower, where the originator is a mortgage manager or mortgage originator, and an ongoing relationship between Firstmac and the borrower directly, where the originator is a mortgage broker. 22 The pricing and terms of ZIP home loans are reviewed by Firstmac to remain competitive for potential new borrowers, for current borrowers to avoid them seeking to refinance the loans with another institution and for originators to encourage them to take on and market the ZIP home loans. 23 The original ZIP home loans were promoted up until early 2014 to originators such as Certified Mortgage Services Pty Ltd and Allied Mortgage Corporation by means of product rate sheets, product brochures and product training PowerPoint presentations. 24 An example of an original ZIP home loan product sheet distributed to mortgage brokers and mortgage managers appears as follows: 25 An example of a rate sheet dated 9 December 2013 distributed to originators to inform them of applicable interest rates and loan to value ratios for products is as follows: The rate sheets were not provided to consumers. 26 In accordance with the practice described at [21] above, ZIP home loans settled by Firstmac through its mortgage brokers are managed and serviced by Firstmac. During the term of the loan Firstmac issues statements, correspondence and other information to each borrower which, according to Mr Gration, bear the Applicant's Mark. Examples of these documents, some of which appear below, were in evidence before me. 27 Statements for interest only loans are issued by Firstmac monthly and statements for principal and interest loans are issued by Firstmac every six months. Customers with ZIP home loans, including the original ZIP home loans, receive two statements, one for the debit card loan split (for the ZIP Visa) and one for the main loan split. Depending on when the loan was written, and the particular features of the loan, the loan splits are referred to differently in the statements. An example of a statement for the "ZIP FULL DOC LOC" appears as follows (with all identifying information redacted): 28 The correspondence issued by Firstmac for original ZIP home loans settled by mortgage brokers included letters to customers confirming preliminary approval of the loan, final approval, a welcome letter and a loan document pack enclosing a copy of the loan agreement. An example of that correspondence appears as follows (with all identifying information redacted): 29 For original ZIP home loans settled by Firstmac through its mortgage managers and mortgage originators, statements, correspondence and other information was issued to each borrower. Again, Mr Gration understands that those documents bear the Applicant's Mark. Examples of those documents, some of which appear below, were also in evidence before me. 30 Statements issued for loans originating from a mortgage manager or mortgage originator, including for the original ZIP home loans, appear on the mortgage manager's or mortgage originator's letterhead but are generated and sent by Firstmac. That is to ensure that the statements are issued in a consistent format and in accordance with the frequency, depending on the type of repayment, of the terms of the original ZIP home loans set by Firstmac. An example of a statement issued by Resicom to a borrower (with identifying information redacted) is as follows: 31 Loans introduced by mortgage managers (unlike mortgage brokers) have post-settlement documents, including statements and correspondence, issued on the letterhead of the mortgage manager. An example of that correspondence (with identifying information redacted) for an original ZIP home loan is as follows: 32 In early 2014 Firstmac sought to streamline its product offerings and stopped offering, through its originators, the original ZIP home loans for further promotion to new customers in that form. However, Firstmac and its originators continued to manage and service original ZIP home loans held by existing customers. As part of its management and servicing Firstmac continued to issue statements for each original ZIP home loan created through a mortgage broker for the term of the loan and continued to issue statements on behalf of mortgage managers/originators for original ZIP home loans created through them. Throughout, Firstmac remained the contact for its mortgage originators and in some instances borrowers for original ZIP home loans that were created before 2014.

The September 2014 Origination Agreement 33 In September 2014 Loans.com.au entered into a mortgage origination and management agreement with Firstmac Origination (September 2014 Origination Agreement). Loans.com.au does not have its own home loan portfolio. Loans.com.au is an online lender which promotes Firstmac's financial products and services. 34 Under the September 2014 Origination Agreement, Loans.com.au acts as a mortgage originator exclusively for Firstmac's products and services and is responsible for the promotion of those products and services. Loans.com.au has a dedicated sales team which promotes Firstmac's financial products and services (including ZIP home loans) to customers who have made an inquiry, takes customers through the loan application process and obtains the information required to enter into a loan agreement with Firstmac, after which Firstmac takes over the arrangements in the manner set out at [15(3)] above. The changeover between Loans.com.au and Firstmac occurs closer to settlement of the property the subject of the home loan once Firstmac approves the home loan application and arranges for it to be settled. Loans.com.au is involved in this process to the extent that it sends correspondence to the borrower to keep the borrower informed of the status of the progress of the borrower's home loan application. The arrangement between Firstmac and Loans.com.au is reflected in credit guides issued by Loans.com.au to consumers. 35 Since September 2014 and under the September 2014 Origination Agreement Firstmac regularly issued product rate sheets to Loans.com.au which set out new products and services on offer by Firstmac and any changes (such as changes to interest rates) to any existing products and services. Mr Gration is responsible for approving the requirements of these products and services, and also approving the rate sheets which are prepared by the Firstmac product manager and circulated to Loans.com.au. Loans.com.au then, at its own cost, introduces the new products and services by updating its website located at www.loans.com.au, updating comparative websites, generating relevant posts on its social media pages and creating relevant material such as credit guides. 36 The marketing team, which is staffed by Firstmac employees, creates promotional material, such as brochures, for Loans.com.au for publication on its website and social media pages and designs and updates Loans.com.au's website and social media pages. The costs of those marketing activities is reimbursed by Loans.com.au. Mr Gration approves the changes to be made to the Loans.com.au website in relation to the requirements of Firstmac's products and services, which are then reported to Loans.com.au via email from the product manager at Firstmac. The in-house legal team and Marie Mortimer, the managing director of Loans.com.au are also involved in the approval process.

Re-introduction of the ZIP home loan in 2018 37 On 15 June 2018 Mr Gration sent an email to, among others, Ms Sudarmana, Celia Powell and Duncan MacFarlane, also of Firstmac, in which he wrote: Tiska and Celia Would you please consider the product and legal requirements to launch a new product, working title zip home loan, with the following spec - home loan = redraw loan + visa debit account for up to $7500 - redraw loan at rate 3.72% - visa debit account at rate 0% - min loan amount and balance $190k - standard valuation, credit, LVR, etc conditions apply to the total loan amount - standard upfront fees val + settlement + government - no ongoing fees Target launch date in say 3 weeks on Monday 9 July. Duncan...to celebrate reaching the massive $10 billion, being the largest non bank in Australia, plus being the fastest, smartest and more.... LCA is now providing a Visa card for up to $7,500 at 0% interest "forever" as part of its new zip home loan. That's zip, zero, zilch forever! T&Cs apply 38 Ms Sudarmana recalls having conversations with Mr Gration in early to mid 2018 about campaigns (i.e. products and services) to be launched in around Spring that year which included a new home loan under the name ZIP. On 26 July 2018 Mr Gration sent a further email to Ms Sudarmana which she described as setting out at a high-level the requirements of the ZIP home loan (26 July Email). The email provided: 39 Mr Gration was cross-examined about the 26 July Email. Relevantly, senior counsel for the Zip Companies, Mr Bannon SC, had the following exchange with Mr Gration: Mr Bannon: And then under that you say, "Zip, zero, zilch interest on ZIP Saver Account," do you see that? Mr Gration: Yes. Mr Bannon: And that was your description of the reference to the fact that there would be no interest payable on the ZIP Saver Account? Mr Gration: Yes. Mr Bannon: And you're using expressions well known to you of "zip, zero, zilch" to indicate nothing? Mr Gration: Yes. Mr Bannon: And that was your explanation, may we take it, to Tiska of how - or part of your explanation as to how this loan operated, correct? Mr Gration: Yes. At the time, yes. Mr Bannon: When you say "at the time" the fundamental structure of this didn't change, did it, when it was launched? Mr Gration: There were elements that changed. Br Bannon: The fact that "zip, zero, zilch interest" on the ZIP Saver Account never changed, did it? Mr Gration: No, that didn't change. Mr Bannon: And the amount - the percentage amount accessible on the ZIP Saver Account, did that change? Mr Gration: Yes. Mr Bannon: All right. But not by a significant order of magnitude, I take it? Mr Gration: No, it was set at $5000. Mr Bannon: All right. Instead of a percentage of the home loan? Mr Gration: Yes. Mr Bannon: Yes. And then there's a reference under there to "no offset." Is that a shorthand for saying there - in this particular loan there wouldn't be an account into which the borrower could deposit funds thereby from time to time reducing the amount of the principal and thereby from time to time reducing the amount of interest payable on the loan? Mr Gration: Reducing the ..... of interest, yes. Mr Bannon: Yes. And the way it reduced interest was on a from time to time basis if moneys were put into an offset account - I will start again. In terms of an explanation of an offset account generally, not speaking about this one, it's an account which permits a borrower to put moneys in and take them out again from time to time?--- Mr Gration: Yes. Mr Bannon: And usually the monthly balance of that amount will be offset against the principal? Mr Gration: Yes. Mr Bannon: And resulting in a reduction in the amount of the interest payable? Mr Gration: Yes. … Mr Bannon: And may we take it that it was important for you to explain to Ms Sudarmana the features of the loan having regard to her role as a product manager? Mr Gration: Yes. Mr Bannon: So that she could explain it in similar terms to anybody she dealt with? Mr Gration: Yes. 40 In response to the 26 July Email, as product manager, Ms Sudarmana: (1) prepared a product specification in the form of a rate card for the ZIP loans. The rate card was generated based on a template setting out the form rate cards are typically issued to Loans.com.au for Firstmac's portfolio of products, with the logo of Loans.com.au on the front. The use of the logo in this way also assists Ms Sudarmana in identifying the channels (i.e. the originators, brokers, aggregators or managers and/or the specific person in that organisation) to which the rate card has been sent. On 25 September 2018 Ms Sudarmana sent the rate card by email to a number of people at Firstmac and Loans.com.au. Ms Sudarmana was also responsible for preparing and circulating subsequent rate cards with any varying interest rates for the ZIP loans. The rate cards were marked for "internal use only" and were to be used internally within Firstmac and Loans.com.au; (2) co-ordinated the preparation of product brochures for the ZIP loans using personnel in the marketing department at Firstmac, which prepares marketing material for Loans.com.au. They were then made available for download from the website of Loans.com.au; and (3) prepared and gave a PowerPoint presentation which set out the features of the ZIP loans to: (a) personnel at Firstmac as the "Delegate Lending Authority", which means that it is and continues to be responsible for the final assessment of ZIP loans, making the ultimate decision as to which borrowers Firstmac would lend to under the ZIP loans; and (b) the team leaders at Loans.com.au to educate them about the nature of the ZIP home loan, its specification, its requirements, and how to prepare and submit loan applications using Firstmac's Loan Application Wizard (a software application for mortgage groups to submit home loan applications). The team leaders were then expected, in turn, to educate the members of their respective teams to ensure they are trained to handle inquiries. A copy of the PowerPoint presentation which was presented by Mr Sudarmana was in evidence before me. The Applicant's Mark is used a number of times in it. 41 Ms Sudarmana described that ZIP loan conceived at this time as having two main parts: the ZIP home loan; and the ZIP Visa debit card (I will refer to this product as the 2018 ZIP home loan). 42 By September 2018, the 2018 ZIP home loan was ready to be offered as part of the portfolio of products offered by Firstmac through Loans.com.au. It was re-introduced as a term loan (rather than a line of credit) with a $5,000 interest free Visa debit card (rather than as initially envisaged the limit of the credit card being at 1% of the loan amount capped at $10,000) to provide transactional capability. According to Mr Gration this was a unique product offering in the industry. At the time there was fierce competition for home loans on internet comparison sites and Loans.com.au wanted a home loan product with a point of difference not likely or easily to be matched by the banks. The original ZIP home loan provided a platform and brand for this new product offering through Loans.com.au. 43 In cross-examination Mr Gration agreed that the key distinguishing feature of the 2018 ZIP home loan was the attached zero interest Visa debit card and that another feature of the product was the ability to eliminate debt "as quickly as possible". 44 According to Mr Gration since September 2018 Loans.com.au has used the Applicant's Mark to promote the 2018 ZIP home loan on behalf of Firstmac pursuant to the September 2014 Origination Agreement as follows: (1) on its website. In September 2018, Mr Gration, who is responsible for approving changes to the Loans.com.au website where they concern the requirements of Firstmac's products and services, reviewed proposed changes to the website identifying the 2018 ZIP home loans before they went live. Mr Gration is familiar with the Loans.com.au website and refers to it regularly for a range of reasons, including to ensure that he continues to be comfortable with the content published on it. The 2018 ZIP home loans have been promoted on the Loans.com.au website since September 2018 and continue to be promoted. Screenshots of the website, as at the time Mr Gration swore his affidavit, May 2020, and dating back to October 2018 were in evidence before me. Mr Gration gave evidence that those screenshots were consistent with his recollection of the Loans.com.au website on and around the dates shown in them. By way of example a screenshot of the site as at October 2018 is as follows: Loans.com.au is responsible for updating the features of the 2018 ZIP home loan on the online platforms it controls and operates (including its website) according to the product rate sheets; (2) on its social media pages. Loans.com.au has Facebook, Twitter and Instagram accounts. A selection of posts on those pages was in evidence before me and include: (a) a Facebook post as at 28 February 2019: (b) a Twitter post as at 28 February 2019: (c) an Instagram post as at 19 December 2018: (3) in its promotional material. The marketing team at Firstmac creates promotional material for the 2018 ZIP home loan which is used by Loans.com.au on its website, as a brochure which can be downloaded by customers, and on its social media pages; (4) in its correspondence. For a single loan there are a number of documents sent by Loans.com.au to the borrower which have been approved in content and layout by Mr Gration and his team. They include a preliminary approval, a final approval, a loan document pack, a mortgage document pack, a "home loan pack" and a welcome letter. A set of these documents sent by Loans.com.au to a particular borrower in October 2018 was in evidence before me. The welcome letter did not itself use the Applicant's Mark but it enclosed a loan summary which provided (with identifying information redacted): (5) on its statements. Once a new ZIP home loan has been approved and settlement is complete, Firstmac co-ordinates the issue of regular statements to each borrower, which are branded Loans.com.au, for the life of the loan. As is the case with the original ZIP home loan, for principal and interest loans, statements are issued every six months and for interest only loans, statements are issued every month. Firstmac also issues statements, again branded as Loans.com.au statements, for the debit card loan split i.e. the ZIP Visa. A bundle of statements was in evidence before me each of which bore the Applicant's Mark as part of the "product description". 45 The number of 2018 ZIP home loans settled by Loans.com.au and their total approximate value for the period September 2018 to April 2020 was in evidence before me. Given the confidential nature of the evidence I do not intend to reproduce it here. 46 The 2018 ZIP home loan has also appeared in third-party publications and on comparative websites, which permit borrowers to compare home loans being offered against a comparison rate by various institutions. The latter included websites operated by Mozo, Canstar and RateCity. 47 From time to time Ms Sudarmana obtains Google Analytics data for the product pages of the Loans.com.au website. She explains that as Loans.com.au is an online retailer Google Analytics is a useful resource to identify the traffic onto those product pages as an indicator of the level of interest in the relevant product. Ms Sudarmana obtained the Google Analytics results for three webpages for the 2018 ZIP home loans on the Loans.com.au site for the periods 1 June 2018 to 22 February 2019 and 23 February 2019 to 20 April 2020. The information for each period is divided into two tables: the first provides a general summary of the number of views to the three webpages and the second provides a breakdown according to the source of the traffic to the webpages e.g. from Facebook ads, the Google search engine, aggregator comparison websites such as Mozo, Canstar and Finder. The first general summary table for each period is as follows: 48 Since 22 February 2019, Loans.com.au has continued to act as mortgage originator and to promote and settle the 2018 ZIP home loans on behalf of Firstmac. As at May 2020 there was no intention on the part of Firstmac Origination to terminate the September 2014 Origination Agreement or on the part of Firstmac to remove the 2018 ZIP home loan as a product and service offering to Loans.com.au. 49 Towards the end of 2019 Firstmac decided to launch the ZIP home loan to third-party broker channels in addition to Loans.com.au. The re­opening of the third-party broker channels does not impact, and has not impacted, Firstmac's offering of the 2018 ZIP home loans to Loans.com.au, and the continued promotion of that product by Loans.com.au. The form of the ZIP home loans offered to these mortgage brokers is fundamentally the same as that offered to and by Loans.com.au. 50 Since February 2020 Firstmac has launched the 2018 ZIP home loans to over 8,000 of its accredited mortgage brokers across Australia. In Mr Gration's view, the 2018 ZIP home loan would be more effectively sold by an intermediary broker presenting the full value and benefits of its unique proposition to the customer. In doing so, Firstmac reverted to the initial arrangement of promoting, offering and settling the 2018 ZIP home loans to borrowers through a broader range of originators. The mortgage brokers include aggregator mortgage broker groups including Fast, Choice, PLAN, Loan Market and Connective who can select to promote, through their respective different channels, third-party financial products and services, including the 2018 ZIP home loan, on behalf of Firstmac. The 2018 ZIP home loans need to be competitive so that they are taken up as a product and promoted by these aggregator broker groups. 51 Firstmac also continues to manage and service the original ZIP home loans arranged before and up to 2014 by Firstmac through its originators. As at 3 February 2020, there were 127 existing original ZIP home loans which continued to receive monthly statements. Firstmac estimates that the monthly statements for these existing loans will continue (assuming the loans are not terminated or discharged earlier) until 2044. 52 Mr Gration explained that at the time of launching the 2018 ZIP home loans in 2018, Firstmac's objective was to create a home loan with distinctly unique features and name. It is Mr Gration's understanding that the uniqueness of the home loan product is reinforced and enhanced by the use of a unique name. Mr Gration explained that the competition for home loans is crowded and fierce. Loans.com.au has a home loan product named "Essentials". Five other lenders have a similar product with the same name. According to Mr Gration, to create a home loan with distinctly unique features and name is of tremendous value when brokers are searching in aggregator software with 30 plus lenders and hundreds of home loans. It is the platform for building a significant and sustained new business flow of home loans from brokers.

Loans.com.au and the 2018 ZIP home loan 53 As set out at [33]-[34] above, Loans.com.au is an online lender which promotes Firstmac's financial products and services, acts as a mortgage originator exclusively for Firstmac's products and services and promotes Firstmac's financial products, including a range of ZIP home loans, and services. 54 Ms Pendrey recalls that she first became aware of the 2018 ZIP home loans in late 2018 when she was either in the role of lending manager or senior lending manager. While she had the roles of senior lending manager and then retail sales team leader, the 2018 ZIP home loan was one of the products that she and her team promoted and continue to promote, including by reference to the information and material set out on the "how it works" page on the Loans.com.au website. Both as a senior lending manager and retail sales team leader Ms Pendrey has relied on the Loans.com.au website to relay information to customers over the telephone. 55 Ms Pendrey estimates that in her role as lending manager and, to some extent, as senior lending manager, she referred customers to the Loans.com.au website on a daily basis and, in some instances, walked them through the website while on the telephone with them. She also refers to the website if she needs to confirm or check a detail about a product offered by Loans.com.au. Based on her observations of her team members and the way in which they interact with customers over the telephone, Ms Pendrey is aware that they have used, and continue to use, the Loans.com.au website in the same way as she does. 56 Ms Pendrey obtained screenshots of the Loans.com.au website, including from the Wayback Machine. According to Ms Pendrey those screenshots are consistent with her recollection of how the website has appeared since the time she held her role as senior lending manager and on around the dates of each screenshot. She has observed minor changes to the website over time such as the change in the length of time that Firstmac has been operating. By way of example the screenshot obtained as at 22 October 2018 which refers to the 2018 ZIP home loan is as follows: 57 Since September 2018 ZIP home loans have been continuously promoted, and continue to be promoted and offered, by Loans.com.au with generally the same specification and terms but with varying interest rates.

Mr Gration becomes aware of the Zip Companies 58 Mr Gration became aware of Zipmoney Payments in about late August or September 2016 after an application for removal of the Applicant's Mark on the grounds of non-use (see [172]-[175] below). Firstmac opposed that application. At the time, Mr Gration considered that: (1) by responding to and opposing the first non-use application, it was clear that Firstmac wanted to retain registration of the Applicant's Mark and the associated exclusive rights given to Firstmac under the legislation; (2) given the significant costs of litigation, it was prudent and desirable to defend the Applicant's Mark before taking enforcement steps, although he did not then realise the length of time that would take; and (3) while he had a general appreciation that "Zipmoney" had entered the market, he did not monitor what "Zipmoney" was doing and he had no insight or foresight into its commercial operations and plans. 59 Mr Gration expected that, if Firstmac was successful in defending its registration of the Applicant's Mark, "Zipmoney" would stop using ZIP and it would have a contingency plan in place to cover such a situation. 60 Firstmac has not authorised or granted any licence or permission to the Zip Companies to use the Applicant's Mark or any version of a trade mark including the word ZIP, nor have those companies asked Firstmac for permission to use the Applicant's Mark or any version of a trade mark including ZIP, or for Firstmac's consent or permission to register any trade marks for or including ZIP.

The Zip Companies 61 On 24 June 2013, when first incorporated, Zipmoney Payments had the name Zipmoney Pty Ltd. On 14 June 2015, it changed its name to its current corporate name, Zipmoney Payments. 62 The Zip Companies have a related company, Zipmoney Holdings Pty Ltd, which was also incorporated on 24 June 2013. Zipmoney Payments is a subsidiary of Zipmoney Holdings and Zip Co is the ultimate holding company of both Zipmoney Payments and Zipmoney Holdings.

The development of the ZIP business 63 In about mid-2012 Mr Diamond began to think about establishing a business based on digital/online short term lending to consumers. He was interested in creating a business that would disrupt traditional lenders and the credit card market and which used the point-of-sale experience as the point of origination of new customer credit accounts. He considered that an important feature of such a business would be the ability for retail customers to obtain credit quickly (in real time) and without a lengthy application process. At the time, Mr Diamond did not believe there to be a product offering of that type in Australia. For example, GE Money products were promoted on the retail sales floor, but still involved a traditional finance application. 64 Throughout the second half of 2012, Mr Diamond researched businesses operating as short term lenders, particularly in the United Kingdom (UK). He recalls that two of the businesses he looked at as part of his research were VirginMoney and GE Money (which was subsequently taken over by Latitude Financial). He also looked at the Swedish business Klarna and the UK business Wonga. He undertook this research around his other commitments. At the time Mr Diamond was providing consulting services to other businesses such as Prospa Advance, which focussed on digital lending to small businesses, Money in Advance, a digital short term lender in the UK, and Live TaxiEpay, which provided a payment platform for taxis. Through the combination of his research and consulting work, Mr Diamond began to develop an understanding of how he might be able to make his digital/online short term lending business work. 65 During the second half of 2012, although he does not now recall exactly when, it also occurred to Mr Diamond that the names ZIP or ZAP might be good brands for a digital short term consumer lending business. He liked those names because he thought they were short and catchy. The name ZIP seemed to evoke fast movement successfully, which was consistent with Mr Diamond's idea of providing finance in "real time". He was also aware at the time that, from a marketing perspective, a domain name with three letters was desirable. Three letter words are easily remembered and there is limited scope for misremembering short names. Mr Diamond considered that the names ZIP and ZAP also met this criterion, but he preferred the name ZIP because of the way it brought to mind fast movement. 66 When Mr Diamond started thinking about using the brand ZIP for the business, he also decided that it would be a good idea to also use the word "money" i.e. ZIP MONEY. This was because other finance businesses (such as VirginMoney and GE Money) used the word "money" in their names and because the word "money" indicates very clearly what the business is about. Mr Diamond considered that incorporating the word "money" into the brand helped to place the product into its category. His plan was to develop ZIP as a brand, but to use additional words like "money" to help position the brand in the financial sector, placing it alongside Visa, MasterCard and the like. 67 Mr Diamond liked the brand ZIP a lot, but it was not the only potential brand that he considered. As set out above, he also considered the name ZAP as well as some other options, although he could no longer recall what they were. 68 In about November 2012 Messrs Gray and Diamond met to discuss potential business opportunities, including Mr Diamond's idea of a short term digital lending business. Mr Diamond recalls that at about this time he told Mr Gray that he had the brand ZIP or ZIP MONEY in mind for the business. Mr Diamond explained that when he referred to the names ZIP and ZIP MONEY as brands he meant that those names were to function not merely as a name but also as an identifier of the business and its products. To like effect Mr Gray recalls that in one of these early discussions Mr Diamond mentioned that he had the names ZIP and ZIP MONEY in mind for a proposed online retail consumer lending business, which was one of the business opportunities they discussed. 69 At about the time of his meeting described in the preceding paragraph, Mr Diamond decided that he should try to register a suitable domain name based on the brand ZIP. He looked at a number of domain names by typing the unique uniform resource locator (URL) into a web browser, although he does not now recall all of those he considered at the time. He does however recall that in the course of undertaking this process he discovered that the domain name www.zip.com was owned by Bank of America but, when he visited that domain name, it was not an active website. At the time, Mr Diamond was aware that Bank of America did not have any operations in Australia. 70 The upshot of this process was that Mr Diamond registered the domain name www.zipmoney.com.au. He considered that domain name to be suitable because it was consistent with his idea to use the names ZIP and ZIP MONEY for a business in Australia. 71 Following their initial discussions, Messrs Gray and Diamond decided to work on the digital short term lending business together. 72 Mr Gray recalls that in early 2013 shortly after his initial discussions with Mr Diamond described at [68] above, he undertook some internet searches in relation to the name ZIP. He undertook these searches reasonably frequently during this period because online research was part of the process of scoping out and identifying the opportunity for the online retail consumer lending business. Mr Gray does not recall all of the search results but does recall that some of them related to zip taps, which he has seen in use in offices, and that none of the searches generated any reference to Firstmac or any products provided by it. 73 During the first half of 2013 Messrs Diamond and Gray worked on developing the preliminary business model for the business, including developing the product they intended to offer and the technology required to support that product. Mr Diamond explained that this required a great deal of work by both of them. Between them they focussed on pitching the potential business to retailers (such as Kogan and Zuji), working out how to build a real time credit platform, seeking out seed capital and loan book funding, developing the economic model for the business and identifying key staff for recruitment. 74 Mr Gray also recalls that up until June 2013 he and Mr Diamond had been using the names ZIP and ZIP MONEY for the business and that while they had discussed some other names he regarded ZIP and ZIP MONEY as the preferred option. 75 By about June 2013, Messrs Diamond and Gray decided that they definitely wanted to use the names ZIP and ZIP MONEY for the business. Mr Diamond thought that they had progressed far enough with planning for the business to create a corporate structure. For that purpose, on 24 June 2013, he arranged, through his accountant, Quantum Partners, for the incorporation of Zipmoney Pty Ltd, now Zipmoney Payments, and Zipmoney Holdings. Mr Diamond said that the use of the words ZIP and MONEY as a part of these corporate names followed on from his and Mr Gray's plan to use the names ZIP and ZIP MONEY for the business. 76 At about the time of the incorporation of the companies referred to in the preceding paragraph Mr Gray undertook some further internet searches in relation to the name ZIP. While he could not recall all of the results that came up in these searches, and did not keep records of them, he does recall that he did not see any reference to Firstmac or any products provided by it at the time. 77 In the preliminary phase of building and establishing the ZIP business, Mr Gray also applied to the Australian Securities and Investments Commission on behalf of Zipmoney Pty Ltd for an Australian Credit Licence to permit Zipmoney Pty Ltd to engage in credit activities. On 3 September 2013 Zipmoney Pty Ltd obtained credit licence no. 441878. 78 In late November 2013 Zipmoney Pty Ltd partnered with its first Merchant, Chappelli Cycles, and sometime after that it began offering credit and payment services to customers of Chappelli Cycles in Australia. 79 A screenshot of part of the www.zipmoney.com.au website as at 25 January 2014 obtained from the Wayback Machine appeared as follows: Mr Gray accepted that, while he would need to check the Zip Companies' records, it was likely that the five Merchants shown there were those who had signed up as at late January 2014.

2013 trade mark applications 80 Once Messrs Gray and Diamond had decided to use the names ZIP and ZIP MONEY, they commissioned the design of logos that could be used for the business. Mr Diamond commissioned a designer in Sri Lanka (whose name he cannot now recall) to design them. They also used a business called 99 Designs for alternative ideas. Ultimately Messrs Gray and Diamond settled on the logo designs presented by the Sri Lankan designer which were as follows: The branding of the ZIP business has evolved over time and these logos are no longer used. 81 On 19 and 20 August 2013 Zipmoney Pty Ltd filed trade mark applications no. 1575528 and no. 1575717 for the logos set out above (2013 trade mark applications). Prior to filing the applications Mr Diamond did not do a search of the trade mark register and Zipmoney Pty Ltd did not seek any legal advice about registering these logos as trade marks. At the time, Mr Diamond thought it would be a straight forward process to register a trade mark. He was also very conscious about how they spent money as they had limited funding to get the business off the ground and he was keen to avoid any unnecessary outgoings. Legal advice about trade marks fell into that category at the time. 82 Mr Diamond does not recall what prompted Zipmoney Pty Ltd to file the 2013 trade mark applications but does recall he filed the applications himself. But in cross-examination he accepted that the 2013 trade mark applications were made to protect their rights, i.e. use of the trade marks, for when the business which they were focussed on building, was operational. 83 In cross-examination Mr Diamond also accepted that between June and mid-August 2013 he took some steps to inform himself about trade marks and their registration and he made the applications because he understood that trade marks could be registered. Relevantly, senior counsel for Firstmac, Mr Webb SC, had the following exchange with Mr Diamond: Mr Webb: You agree, don't you, with this proposition: knowing that trade marks were capable of registration, or that there was a registration system for them, and that registration gave protection in respect of them, at that time you understood it would be prudent business practice to seek registration of a trade mark you intended in future to use in a business? Mr Diamond: Yes. 84 At some time later in 2013, Zipmoney Pty Ltd received adverse examination reports from IP Australia in relation to the 2013 trade mark applications (2013 Adverse Reports). Those reports were sent to the address PO Box 1501, Bondi Junction, NSW, 1355, which was a post office box that Messrs Gray and Diamond used for the business at the time. Mr Gray was responsible for clearing the PO Box. He recalls collecting the 2013 Adverse Reports from the PO Box. While he has no recollection of reading them in detail, he does recall understanding from them that the 2013 trade mark applications had not been accepted for registration. He understood that this was a potentially important matter for the business, and that the reason why the application had been unsuccessful was because there was another trade mark that was close to the one applied for, although he does not recall taking in that the 2013 Adverse Reports referred to Nationale Limited, which he now knows to be a former name of Firstmac, or the Applicant's Mark. 85 As Mr Gray was not the person responsible for the 2013 trade mark applications, he provided the 2013 Adverse Reports to Mr Diamond. 86 The 2013 Adverse Reports were dated 1 and 16 October 2013 respectively and included: (1) in relation to application no. 1575528 for ZIP MONEY logo under the heading "What are the problems with your trade mark?": Your trade mark is identical to or closely resembles trade mark number 1021128. This trade mark has an earlier priority date and is for the same or similar goods or services. • Your trade mark closely resembles the earlier trade mark because the prominent and memorable feature of your trade mark is the word ZIP and the earlier trade mark is for the word ZIP. AND • The services are similar because you have claimed a variety of services in Class 36 relating to advice in relation to credit and the provision of credit and the earlier mark has claimed financial affairs (loans) in Class 36. I have enclosed details of this trade mark. The enclosed details were for trade mark registered no. 1021128 for the word mark ZIP owned by Nationale (now Firstmac) i.e. the Applicant's Mark; and (2) in relation to application no. 1575717 for the ZIP logo under the heading "What are the problems with your trade mark?": Your trade mark is identical to or closely resembles the following trade marks. These trade marks have earlier priority dates and are for the same or similar goods or services: 879664, 1021128 Trade mark number: 879664 • Your trade mark /closely resembles the earlier trade mark because the prominent and memorable element of both trade marks is the word ZIP. AND • The services are similar because you have claimed various general financial and financial advisory services in Class 36 and the earlier mark claims "advertising; business management; business administration; office functions; the activities may be carried out on-line via the Internet" in Class 35. General financial and financial advisory services are often provided incidentally with the types of business administration and management services claimed by the earlier trade mark. Trade mark number: 1021128 • Your trade mark closely resembles the earlier trade mark because the prominent and memorable feature of your trade mark is the word ZIP and the earlier trade mark is for the word ZIP. AND • The services are similar because you have claimed a variety of services in Class 36 relating to advice in relation to credit and the provision of credit and the earlier mark has claimed financial affairs (loans) in Class 36. I have enclosed details of these trade marks. The enclosed details were for the Applicant's Mark and for trade mark registered no. 879664 for the word mark ZIPFUND owned by Creative On-Line Technologies Ltd. 87 Mr Diamond recalls being aware in about late 2013 that Zipmoney Pty Ltd had received the 2013 Adverse Reports but at the time he gave them only cursory attention. He did not focus his attention on understanding or addressing the issues raised in them and he does not recall reading them in any detail. At the time: (1) his time was dominated by a number of commercial issues; (2) the second half, and particularly the last quarter, of 2013 was a hectic time for him and Mr Gray; (3) they were in the middle of launching the ZIP business, which involved a number of urgent commercial challenges; and (4) Mr Diamond was heavily focussed on building and testing the Zip Money product; developing relationships with potential retailer Customers; and securing funding for the loan book that would underpin the business. The latter was a particularly critical issue at the time as some of the early shareholders who had committed to provide funding had pulled out and there was an urgent need to find alternate funding. 88 Following receipt of the 2013 Adverse Reports, Zipmoney Pty Ltd did not seek any legal advice in relation to the 2013 trade mark applications. It did not occur to Mr Diamond to do so. 89 Similarly, throughout 2013 and 2014 Mr Gray was occupied with launching the ZIP business and with issues that were urgent and commercially critical including for example: (1) creating a business plan; (2) developing the suite of business policies and procedures that would underpin the ZIP business; (3) developing the credit decision technology which is the "engine" that sits behind the Zip platform; (4) developing the interface between the ZIP business and online retail platforms; (5) securing seed capital and loan book funding; (6) strategic hiring of key personnel; (7) building awareness of the ZIP business and building the Merchant base; and (8) managing regulatory filings (most notably the credit licence, which was a substantial undertaking), registration and reporting. 90 At the time, given his focus on commercial issues, Mr Gray did not treat the 2013 Adverse Reports as an important commercial issue and did not take any steps to respond to them. During 2014 and early 2015 he focussed his energy on building the ZIP business which was beginning to make progress in the market. The issue of obtaining trade mark registrations did not seem commercially significant or pressing to him at the time. 91 In cross-examination Mr Diamond gave the following evidence about the 2013 Adverse Reports and the steps taken after their receipt: Mr Webb: Yes. And you knew that what it was saying was there was an obstacle to the registration on your application and it was the trademark that's referred to at page 2980?--- Mr Diamond: We knew that there was a, you know, potential issue, but, again, we felt that we had done extensive research and felt that we had sort of satisfied that, and we were very focused on the business at the time. Mr Webb: And by that do you mean to say that you received the report, understood it was adverse, and were happy to go ahead and adopt or start using Zip Money in the business once established, in any event? Mr Diamond: No, I would frame it more we had done an extensive online research to - to - to satisfy ourselves that - that - that no one else was using this particular name, and we were very focused on trying to get a business off the ground, given our limited funding, and - and that was really concerning most of my time, to ensure that we could, I guess, continue the viability of the business. So, you know, that - that really was the - the primary focus. Mr Webb: So because of the demands on your time, I take it from what you've just said, you decided not to bother with pursuit of the application for registration of Zip Money. Is that correct? Mr Diamond: The - the commercial needs of the business were more focused on trying to stand up a business, more so than focusing on trademarks at that point in time. 92 Throughout 2014 and early 2015, Mr Diamond was focussed on establishing and building the ZIP business. It was an exciting and challenging period for him. New commercial opportunities and challenges were arising frequently and he was fully occupied addressing them. Mr Diamond explained that funding the business remained a critical and time-consuming issue. In 2014, the business had more or less run out of money and a number of people in the business were working for free. The majority of Mr Diamond's time was consumed by trying to raise funding to keep the business afloat. In those circumstances, Mr Diamond did not regard obtaining trade mark registrations as a commercial priority. 93 Despite this, Mr Diamond noted that he has been subsequently informed by the Zip Companies' then lawyers, Corrs Chambers Westgarth, that on 8 December 2014 Zipmoney Pty Ltd applied for an extension of time to respond to the 2013 Adverse Reports, an application for extension of time was made and an extension of one month was granted by IP Australia in respect of each trade mark application. The applications for extension of time were made in Mr Diamond's name but he has no recollection of seeking the extension or why he did so. In cross-examination Mr Diamond explained that it was a very tense time and he was focussed on difficult commercial and viability matters with the business needing funding. As a result the 2013 trade mark applications did not get a lot of his attention. 94 Ultimately, Zipmoney Pty Ltd did not respond to the 2013 Adverse Reports and on 1 and 16 February 2015 respectively the 2013 trade mark applications lapsed.

Internet searches 95 In the course of planning and developing the ZIP business, Mr Diamond searched the internet on a number of occasions in relation to the name ZIP, although he cannot now recall the dates he undertook those searches and he did not keep a record of them. Mr Diamond recalls that his searches often turned up references to zip hot water and filtered taps. 96 Once the ZIP business had been launched, Mr Diamond regularly did searches for the name ZIP to see how the ZIP business was being referred to on the internet, which he considered to be an important way of tracking the progress of the business. While Mr Diamond cannot say precisely when he did those searches, his evidence was that they were a common part of his working week in the early days of the ZIP business. In undertaking those searches he does not recall ever seeing a reference to Firstmac or any use by it of the name ZIP. 97 From at least 2013 and throughout 2014 and 2015 Mr Gray also regularly undertook internet searches for ZIP and ZIP MONEY to see whether the ZIP business was being mentioned on internet pages. This was a day to day activity for Mr Gray and one of the ways he tracked the progress of the business. In the course of undertaking those searches and looking at the results Mr Gray did not recall seeing any search results which referred to Firstmac or any products provided by it.

Rubianna Resources Limited and the reverse takeover 98 On 8 April 2015 Rubianna Resources Limited, a mining and resources company listed on the Australian Stock Exchange (ASX), announced an option agreement to acquire Zipmoney Pty Ltd via the acquisition of all the issued shares in its parent company, Zipmoney Holdings. 99 On 4 June 2015 Rubianna Resources announced to the ASX that it had exercised its option to acquire 100% of the issued shares in Zipmoney Holdings and its subsidiaries. 100 The following exchange took place between Mr Webb SC and Mr Gray during cross-examination in relation to the rationale behind the transaction with Rubianna Resources: Mr Webb: Yes. So that in June 2015 there was an agreement between Rubianna and the second respondent and companies associated with it for the acquisition of the business? Mr Gray: Yes. Mr Webb: Yes. And what I want to suggest to you - that the existing facility as at that date, that is, the making of that agreement by exercise of the option in June 2015 was $5 million. The existing facility was $5 million? Mr Gray: Yes. Mr Webb: You agree with that? Mr Gray: Yes. Mr Webb: Thank you. And, so, it was as part of the steps taken towards the reverse listing that the total facility was increased to 20 million? Mr Gray: Yes. … Mr Webb: All right. I mean what the listing agreement involved was a movement from that current facility to an institutional funding agreement or facility with Columbus. You remember that? Mr Gray: Yes. Mr Webb: Yes. Which was properly described a warehouse facility? Mr Gray: Yes. Mr Webb: Yes. So there was a step taken - I'm sorry, I withdraw that. So what was happening in this process was you were severe - the Zip Money companies were severely constrained by their ability to grow the business through to June 2015 because they only had $5,000,000 of funding for their loan book? Mr Gray: No, we weren't severely constrained; it was a function of our size at the time. We've always had the ability … the increase our facilities as and when it has been required. Mr Webb: And you wanted to grow the business and you needed more funding to do that? Mr Gray: Yes. Mr Webb: For your loan book? Mr Gray: Yes. Mr Webb: Yes. So what you did was pursue this backdoor listing to achieve an ability to grow? Mr Gray: Generally, yes. Mr Webb: Yes. And it was a staged process where you used the fact of the agreement for the backdoor listing to top up the five to 20,000,000 and built into the listing agreement an arrangement to shift to a warehouse facility of an equivalent amount? Mr Gray: Yes. 101 From mid-June 2015 drafts of the prospectus were circulated. 102 On 28 July 2015 Mr Gray was appointed chief operating officer and a director of Rubianna Resources. 103 On 11 August 2015 Rubianna Resources issued the prospectus for a public offering of 20 million shares at an issue price of $0.20 per share to raise a minimum of $4 million, with the ability to raise a further $1 million up to a maximum of $5 million. 104 On 19 August 2015 Zipmoney Holdings and Zipmoney Payments raised $5 million in capital as part of the reverse takeover of Rubianna Resources. 105 On 7 September 2015 Rubianna Resources was renamed Zipmoney Limited, on 21 September 2015 Zipmoney Limited reverse listed on the ASX and on 7 December 2017 Zipmoney Limited was renamed to Zip Co.

2015 trade mark applications 106 On 24 June 2015 John Winters, a private wealth advisor with Shaw & Partners, advisor to Rubianna Resources in relation to the transaction, sent an email to James Omond of Omond & Co, trade mark attorney, with subject "In confidence - zipMoney IP report/audit" and three attachments described as "DRAFT IP Report.pdf", "20150526 Letter to Rubianna Resources.pdf" and "20150526 IP Audit Report zipMoney.pdf". 107 On 25 June 2015 Omond & Co filed four trade mark applications on behalf of Zipmoney Payments (2015 trade mark applications) for registration of the following marks in class 36 for "Electronic payment services; Financial payment services; Payment administration services; Payment transaction card services; Loan services; Provision of loans; Advice regarding credit; Consumer credit services; Credit (financing); Financial credit services; Provision of credit; Provision of credit information; Provision of trade credit": (1) application no. 1703059 for: (2) application no. 1703060 for: (3) application no. 1703102 for the word ZIP; and (4) application no. 1703103 for the word ZIPMONEY. 108 On 21 July 2015 the Trade Marks Office issued adverse examination reports for applications no. 1703059, no. 1703060 and no. 1703102 and on 22 July 2015 the Trade Marks Office issued an adverse examination report for application no. 1703103. In each case the Trade Marks Office reported that the application did not meet the requirements of the TM Act because it was similar to other trade marks, citing s 44 of the TM Act. The other trade marks were, in the case of applications no. 1702059 and no. 1703103, registered trade mark no. 1021128 owned by Nationale (i.e. the Applicant's Mark) for the word ZIP and, in the case of applications no. 1703060 and no. 1703102, registered trade mark no. 1021128 owned by Nationale (i.e. the Applicant's Mark) for the word ZIP and registered trade mark no. 879664 owned by Creative On-Line for the word ZIPFUND. 109 Part 1.3 of the prospectus, titled "Key Risks", included in relation to "Registering trademarks": zipMoney has applied to IP Australia for the registration of its trademarks and awaits confirmation. The Proposed Directors note there are a number of prior trademarks with regard to similar trademarks. There is a risk that the owners of these trademarks may assert rights against zipMoney in relation to the use of the zipMoney trademarks and/or oppose the trademark applications made by zipMoney This was further explained in part 8 of the prospectus titled "Risk Factors" as follows: (i) Registering trademarks zipMoney does not currently own its trademarks and has applied for registration of these with IP Australia. The Proposed Directors note there are a number of prior marks with regard to similar trademarks. There is a risk that the owners of these trademarks may assert rights against zipMoney in relation to the use of the zipMoney trademarks and/or oppose the trade mark applications made by zipMoney. 110 Mr Gray and Mr Diamond were each cross-examined about this disclosure in the prospectus: (1) Mr Gray gave the following evidence: Mr Webb: Yes. I want to suggest to you that you applied for trademarks at that time so that you could say that you had made an application as part of designing this statement for inclusion in the prospectus. Do you accept that? Mr Gray: I didn't make the applications, I couldn't accept that. Mr Webb: Is it the case that questions of trademark were outside your responsibility as at August 2015? Mr Gray: My direct area of focus would have been on other things, yes. Mr Webb: Yes. But you were in fact a director of Zip Money at all times up to August 2015, weren't you? Mr Gray: Yes. Mr Webb: Yes. And by July 2015 you had also been made a director of the resources company, hadn't you? And that was part of the process of? Mr Gray: Correct. Mr Webb: listing? Mr Gray: Yes. Mr Webb: And you were one of the directors making the statement in this section of the risk in relation to registration trademarks? Mr Gray: I was a director at the time, yes. Mr Webb: Yes. And the answer to my question is what? Mr Gray: Sorry, what's the question? Mr Webb: You were one of the directors making this statement to the market about risk in August 2015, weren't you? Mr Gray: Yes. Mr Webb: Yes. And you informed yourself as to the appropriateness of that statement for the purpose of agreeing to the issue of the prospectus, didn't you? Mr Gray: Yes. Mr Webb: Yes. And what did you do to satisfy yourself as to that matter? Mr Gray: I don't recall. Mr Webb: You don't recall what you did? Mr Gray: As I've indicated, it's one of numerous risks here and my direct area of focus was on some significant other risks that are outlined here as well. Mr Webb: It was an important matter, wasn't it? Mr Gray: One of many important matters. … Mr Webb: It was a very important matter, wasn't it? Mr Gray: It was one of the many risks called out in the prospectus. Mr Webb: Are you unwilling to agree with the proposition that the securing of registered trademarks was a very important matter for both the second respondent and the first respondent at this time? Mr Gray: Important matter, and it's called out in the risks. (2) Mr Diamond gave the following evidence: Mr Webb: You're aware of the note in the prospectus as to risk? Mr Diamond: Yes. Mr Webb: In respect of that matter, without seeing it now. I'm just asking whether you feel comfortable with agreeing with me without looking at the prospectus to confirm it? Mr Diamond: I - I recall that that was a risk in the prospectus. Mr Webb: Yes. And you know, don't you - or you knew by at least June 2015 that that risk arose because of the two registered trademarks which were cited in the adverse reports we looked at a little while ago? Mr Diamond: Yes. Mr Webb: Yes. And although your initial applications for Zip Fund had lapsed in, I think, February 2015 fresh applications for those same marks were applied for in June 2015. You agree with that? Mr Diamond: Do I agree that trademarks were made in - fresh trademarks were made in 2015? Mr Webb: Yes, in June 2015? Mr Diamond: Yes. We were - we were - we had - by 2015, if I recall, we had also appointed a legal advisor, James Omond, who was looking after these matters. Mr Webb: Right. But all I'm asking you is whether you agree, firstly, that the risk identified was the risk posed to you obtaining registration by the two registered trademarks which were referred to in the adverse reports. Do you agree with that? Mr Diamond: Yes. Mr Webb: And then I want you to also tell me whether you agree that they represented a risk because they stood in the way of applications which were made by the company in June 2015? Mr Diamond: We identified them as a risk as part of the due diligence process. 111 On 14 August 2015: (1) Mr Omond undertook internet searches to establish when Firstmac stopped using the Applicant's Mark and sent copies of the documents to Mr Diamond; (2) Mr Omond sent an email to Mr Diamond with subject "Trade Mark Removal actions - update". One of the attachments to that email is described as "DRAFT Letter to FirstMac requesting consent - draft.pdf"; and (3) it appears that Mr Diamond sent a calendar invitation to Mr Gray and Adam Finger also of the Zip Companies with subject "ATTACK FIRSTMAC TRADEMARK 'ZIP' @ Mon Feb 1, 20162pm - 3pm" although Mr Diamond maintains the date of despatch must be wrong. 112 Mr Diamond accepted that he did not communicate with Firstmac in the period from 14 August 2015 to the end of 2015. 113 In August 2015 Zipmoney Payments filed an application to remove registered trade mark no. 879664 for ZIPFUND from the Register for non-use. 114 On 10 December 2015 Omond & Co filed a trade mark application on behalf of Zipmoney Payments for registration of the word mark ZIPPAY in class 36 for "Electronic payment services; Financial payment services; Payment administration services; Payment transaction card services; Loan services; Provision of loans; Advice regarding credit; Consumer credit services; Credit (financing); Financial credit services; Provision of credit; Provision of credit information; Provision of trade credit" (ZIPPAY Application). 115 On 8 March 2016 the Trade Marks Office issued an adverse examination report in relation to the ZIPPAY Application. The Trade Marks Office indicated that the ZIPPAY Application did not meet the requirements of the TM Act because the mark applied for, ZIPPAY, closely resembled trade mark registered no. 1021128, i.e. the Applicant's Mark, and the services for the mark the subject of the ZIPPAY Application and the services for the Applicant's Mark are similar.

The ZIP business 116 As set out at [3] above, the Zip Companies operate a predominantly closed loop retail payment platform. The Zip Companies offer products and services to both consumers and retail businesses. They offer point-of-sale line of credit products online and in-store through the website www.zip.co, the Zip mobile application (Zip App) and via Merchants, both in-store and on Merchants' websites at checkout. The Zip Companies have two consumer credit products, namely, Zip Pay and Zip Money (together the Zip Products). 117 The Zip Money product has been available to Australian Customers since about November 2013. It allows Customers to access up to $30,000 via a revolving line of credit. There are interest free terms available on every purchase and it is generally used for larger purchases. It is a regulated credit product subject to the National Consumer Credit Protection Act 2009 (Cth). 118 The Zip Pay product has been available to Customers since about December 2015. It allows Customers to access up to $1,500 via a revolving line of credit. Zip Pay has removed the concept of interest and is always interest free. It is typically used for smaller everyday purchases. 119 The Zip Companies offer Merchants a range of services, including lead generation, marketing, a no fraud or charge back guarantee, and a digital payment platform that enables a Merchant to accept payments for its goods and services from Zip Products account holders. Similar to a credit card, Merchants receive payments directly from the Zip Companies and a debit is raised to the Customer's account. Under a merchant services agreement between the Merchant and Zipmoney Payments, the Merchant is charged a merchant services fee for the services it receives from the Zip Companies. 120 The Zip Companies derive revenue by charging monthly account keeping fees and interest (for Zip Money only) to Customers and via the merchant services fees charged to Merchants. 121 The total number of Merchants partnering with the Zip Companies, for the financial year ended 30 June 2016 to the financial year ended 30 June 2019, as taken from the Zip Companies' annual reports, is as follows: 122 The total number of Customers for the financial year ended 30 June 2015 to the financial year ended 30 June 2019, also taken from the Zip Companies' annual reports, is as follows: 123 The Zip Companies also track the Total Transaction Volume (TTV) of the Zip Payment Platform which is the total amount of transactions made using Zip Products at Merchants. The TTV for the financial year ended 30 June 2015 to the financial year ended 30 June 2019, as taken from the Zip Companies' annual reports, is as follows: 124 Revenue for the Zip Companies, as taken from the annual reports for the financial year ended 30 June 2013 to the financial year ended 30 June 2019 is as follows: 125 I make the following observations about the revenue figures recorded in the preceding paragraph: (1) as Zipmoney Payments only signed up its first retailer in November 2013 and as Mr Gray accepted, the revenue earned in the financial year ended 30 June 2013 was not earned from the credit facility business; (2) Mr Gray accepted, having regard to Zipmoney Payments' financial statements for the financial year ended 30 June 2014, that Zipmoney Payments' revenue from the credit facility business for that period was $4,333 rather than the amount shown above which includes "other income"; and (3) based on Zipmoney Limited's annual report for the financial year ended 30 June 2016 it is apparent that for the financial year ended 30 June 2015 Zipmoney Payments' revenue from the credit facility business was $399,585. Once again the figure disclosed above includes other income. 126 The Zip Companies have partnered with Merchants across a number of retail sectors. As at 30 June 2019 payments using Zip Products were accepted by Merchants in all states and territories of Australia including in the following retail sectors: (1) women's, men's and kids fashion; (2) electronics; (3) home improvements; (4) home installations; (5) home and office décor and appliances; (6) food and drink; (7) health and beauty; (8) sports and recreation; (9) travel, experiences and accommodation; (10) services; (11) toys and hobby; (12) education; (13) books; (14) music and AV; and (15) tools. 127 The Zip Companies also keep records of the location of their Customers and Merchants. The number of Merchants with physical stores offering Zip Products by state or territory as at 30 June 2019 was as follows: 128 Mr Gray explained that since 30 June 2019 the number of Merchants and the Customer base of the ZIP business has grown. As at 30 June 2020 it had 24,317 Merchants and 1,871,485 Customers.

Promotion of ZIP and the Zip Products 129 A summary of the Zip Companies' approximate marketing expenditure for the financial years ended 30 June 2013 to 30 June 2019, as extracted from the Zip Companies' financial records and annual reports, is as follows: 130 In August 2016 the Zip Companies first employed someone to formally occupy a marketing role. Since then the marketing team has grown and as at 18 February 2020 consisted of 33 employees responsible for acquiring more Customers and increasing transaction frequency across Merchants. Seventeen of those employees are employed on a fulltime basis. 131 When a Merchant partners with the Zip Companies, the Zip Companies assist the Merchant with integrating the Zip Payment solution into the Merchant's business. This involves providing guidance to the Merchant on how to best display the Zip Products (or product) and Zip trade marks to its Customers and advertise that it now accepts payment via the Zip Products. 132 The merchant services agreement (see [119] above) requires the Merchants to display, either on their website or their premises, signs advertising Zip Payment services and promotional material supplied by ZIP. 133 The Zip Companies have published a Zip Pay best practice integration user guide for Merchants and a Zip Money best practice integration user guide for Merchants. Mr Gray explained that during "onboarding" of a Merchant online, the Zip Companies recommend as best practice that the Merchant has a Zip landing page which explains the Zip Products and features to consumers. The best practice guides illustrate how the Zip Companies guide Merchants on how to promote the Zip Products on their websites, including by displaying the relevant logos on the homepage, a landing page, the product page and the checkout page. 134 The Zip Companies also produced a Zip Pay in-store best practice guide and a Zipmoney Payments in-store best practice guide for Merchants which provide guidance on how to promote the Zip Products in a Merchant's physical retail store and how the Zip Companies' trade marks should be displayed to consumers. 135 According to Mr Gray, Merchants promote the Zip Products in various forms and locations across their stores and examples of Merchant promotion are collected by the Zip Companies and stored using an internal communication platform. A number of screen captures taken by Zip employees which Mr Gray caused to be retrieved from the Zip Companies' business records, showing promotion of Zip Products across 40 Merchant store locations in calendar year 2018, were in evidence before me. By way of example they included: 136 Mr Gray also explained that in his experience it is common practice for Merchants to advertise Zip Products to their Customers via owned or paid marketing channels. Owned channels are those that a brand owns or over which it has complete control, in terms of the publishing and creation of the content that appears through them. Owned or paid marketing channels include electronic and direct marketing, social media and above the line media, which includes large format digital and print outdoor. Merchants promoting the Zip Products via Merchant owned and paid marketing channels were in evidence before me including: 137 Since 2014 the Zip Companies have tracked and recorded instances where Customers sign up to Zip Products. One of the ways they do this is by embedding URL links in Merchant websites so that when a prospective customer clicks on one of these unique URL links it directs the customer to a Zip sign up page. The redirection is recorded in the Zip Companies' database. The number of new Customers who have signed up to a Zip Product via a Merchant, either online or in-store in each calendar year from 2014 to 2019, is as follows: 138 The Zip Companies also undertake joint marketing with select Merchants to produce advertising and promotional material that leverages association of the Zip Products and the Merchant's brand. They focus on joint marketing with Merchants that have a large customer base and hold significant brand awareness among consumers such as, for example, Bunnings, AirAsia, Big W and Officeworks. When the Zip Companies choose to market with a Merchant the parties agree on a "go-to-market" plan and marketing materials are then created which align with the respective brand guidelines of both the Zip Companies and the Merchant. 139 The Zip Companies also engage in their own direct marketing of Zip Products to consumers for the purpose of creating brand awareness and consideration, attracting new Customers and driving frequency of usage of the Zip Products with Merchants. Mr Gray explained that the Zip Companies have increased their focus on this marketing strategy in the last few years with campaigns developed across owned channels, i.e. website, native app, emails, push notifications, SMS, social platforms, paid channels, i.e. large format digital and print outdoor and radio, and public relations, i.e. media releases. As the business has evolved it has become a core focus of the Zip Companies' marketing strategy to build independent head brand awareness, resulting in a rebranding in 2018.

ZIP Websites 140 The Zip Companies own the following domain names: (1) www.zipmoney.com.au since 19 November 2012; (2) www.zipmoneylimited.com.au since 7 September 2015; (3) www.zippay.com.au since 10 October 2015; and (4) www.zip.co since 19 January 2017. 141 The Zip Companies previously maintained two separate websites for the Zip Products at zippay.com.au and zipmoney.com.au respectively. In 2018 the Zip Companies redirected the separate Zip Pay and Zip Money websites to www.zip.co as part of their rebranding strategy. The website at www.zip.co incorporates both Zip Products and is now the primary online presence for the Zip Companies. The websites at www.zip.co, www.zippay.com.au and www.zipmoney.com.au are referred to collectively as the Zip Customer Websites. The website www.zipmoneylimited.com.au is not included as one of the Zip Customer Websites as it is directed to investors of Zip Co. 142 The Zip Customer Websites have experienced a consistent increase in "unique user traffic" over time. Mr Gray explained that "unique user traffic" refers to the number of people visiting the particular Zip Customer Website. Based on data compiled using Google Analytics, in December 2019 the unique user traffic for the Zip Customer Websites was in excess of 3.6 million unique users. 143 The Zip Customer Websites contain "Merchant Tiles" which advertise Merchants and link users to Merchant websites. Users of the Zip Customer Websites can browse through the displayed Merchants or can filter Merchant tiles by category, by refining through filters, such as shopping available online or in-store, or with promotional offers. Customers can click on a Merchant tile and be directed to the selected Merchant website. Mr Gray explained that this is a key channel of lead generation for Merchants. 144 As at May 2020 an "apply now" button appeared on the Zip Customer Websites homepage which allow users to apply for a Zip Product account. In addition, new or prospective users can learn about Zip Products by viewing the "How it works" tab on those websites.

Zip App 145 The Zip App is available for download on iOS and Android mobile devices and has been available since its release in July or August 2018. The Zip App allows Customers to sign up to a Zip Product account, monitor their spending, adjust repayment amounts, make purchases and view monthly statements. 146 The Zip Companies use iTunes to manage the iOS Zip App version releases as well as to check statistics related to use of the Zip App on a daily to weekly basis. They use Google Play to manage the Android Zip App version releases as well as to check statistics on a daily to weekly basis. 147 Using iTunes the Zip Companies track "iOS App Download Units" which are the number of first time downloads of the app and "iOS Session Units" which are the number of times the app has been used for at least two seconds. Using Google Play the Zip Companies track "Android User Acquisitions" which is the number of people who have downloaded the Android app and installed it in the given interval. The equivalent of iOS Session Units is not available data for Android apps. Set out below are a summary of iOS Download Units, iOS Session Units and Android User Acquisitions at six monthly intervals from July 2018 to February 2020:

Social media 148 The Zip Companies have active social media presence across the following platforms: (1) Facebook since 2016; (2) Instagram since 2016; (3) Twitter since 2013; and (4) LinkedIn since 2013, (collectively, Zip Social Media Platforms). 149 On 16 April 2020 Mr Gray visited the Zip Companies' social media platforms and recorded the number of followers for each platform as follows: 150 As part of their social media engagement strategy, the Zip Companies include on the Zip Customer Websites links to their Instagram, Facebook, Twitter and LinkedIn accounts. According to Mr Gray there has been increasing engagement with the Zip Social Media Platforms, particularly in the last two years. For example the Zip Facebook account had 22,034 likes as at 20 January 2018 and 42,727 likes as at 16 April 2020. 151 The Zip Companies' Facebook and Instagram accounts display examples of products and services offered by Merchants, allowing users to explore what is available to them by signing up to a Zip Product. Merchants are referred to and linked in Zip's Facebook and Instagram posts and variants of the hashtag #ownitnowpaylater are used. Mr Gray explained that a hashtag is a method of cataloguing the contents of an image or post on a social media platform so that it can be grouped with other photos and posts that also contain that hashtag. Each of the Zip Social Media Platforms features the logo. For example a copy of the Zip Companies' Twitter page appears as follows: 152 As at 13 March 2020 the hashtag #zippay had 189,155 posts on Instagram, which included posts by the Zip Instagram and Merchant accounts as well as by individuals who had decided to include the hashtag in their post.

2018 rebrand 153 In about December 2016 the Zip Companies engaged Christopher Doyle & Co, a marketing agency, to undertake a brand identity assessment and redesign the ZIP brand. In about June 2017 Christopher Doyle & Co presented its proposed rebrand strategy to the Zip Companies which involved renaming Zipmoney Limited to Zip Co and adopting a master brand name of "Zip" such that any products offered by the Zip Companies would be subordinate to the master brand name, such as ZIP PAY and ZIP MONEY. The rebrand also included new logos and fonts. 154 On 19 June 2018 the Zip Companies rolled out the rebrand based on the concept proposed by Christopher Doyle & Co including across all Merchants. This involved tailoring specific rebrand instructions for major Merchants, instructing them on how to implement the rebrand on their websites and in-store and how to use the head brand name "Zip". 155 The Zip Companies also adopted the new logo and brand strategy on all of the Zip Customer Websites and their marketing. The rebrand cost the Zip Companies approximately $1,089,089. 156 Mr Gray was cross-examined about the rebrand. He had the following exchange with Mr Webb SC: Mr Webb: And when you decided to rebrand in around the end of 2016 or 2017, is it the case that you considered rebranding in a way which might involve changing the name of the business from ZIP? Mr Gray: No. Mr Webb: No. You didn't instruct Christopher Doyle & Co to consider whether there was a better name for the business at that time? Mr Gray: Don't believe so. Mr Webb: Or to test any other names at that time? Mr Gray: I don't believe so. Mr Webb: And if you're engaged in a rebranding at that time, can you give us any reason as to why you wouldn't have given consideration to moving the brand to a new address which included a whole new name? Mr Gray: The business was growing very rapidly and those sorts of changes are significant. Mr Webb: Although it was growing very rapidly, it was still at risk in relation to the use of the name, ZIP, wasn't it, by reason of the fact that there were registered trademarks which prevented it obtaining exclusive rights through registration of its own trademarks, ZIP. You agree with that, don't you? Mr Gray: Yes. 157 In the 12 month period after the rebrand, from June 2018 to June 2019, 564,858 people signed up to a Zip Product account and 5,649 retail stores became Merchants.

The "nothing comes between me and my" campaign 158 In November and December 2019 the Zip Companies undertook a direct marketing advertising campaign, called "nothing comes between me and my", to promote the Zip Products. They engaged marketing agency Avenue C to run this campaign. 159 The "nothing comes between me and my" campaign was a multimedia campaign run in Sydney, Melbourne and Brisbane which used, among other mediums: large format out-of-home billboards positioned above or near busy roads; public transport signage; retail screen displays in Westfield shopping centres; and video advertisements on YouTube, 9Now, Ten Play and Quantcast. For example, the public transport signage displayed in Sydney, Melbourne and Brisbane in November and December 2019 as part of this campaign included: 160 In October 2019 the Zip Companies commissioned Roy Morgan to conduct research into the digital payment solutions market. As part of this engagement Roy Morgan provided the Zip Companies with a report titled the "Digital Payment Solutions Currency Report" which stated that as at October 2019 awareness of the ZIP brand was 30.3% of the total population surveyed. 161 In January 2020 Avenue C conducted a follow up campaign review for the "nothing comes between me and my" campaign which found that, for the campaign, each media format had different estimated reach within the targeted demographic of people aged 18 to 39, where the term "reach" refers to the percentage of the targeted population demographic exposed to a campaign's media. Set out below is the estimated reach for the media formats of large format billboards, public transport signage and Westfield shopping centre advertisements: Reach data for the online video advertisements was not available but Avenue C reported that the videos were viewed (in full) 4,512,510 times and had a 75% completion rate. That is, 75% of people presented with the video completed it and did not skip ahead. 162 According to Mr Gray the Zip Companies spent about $1.4 million on the "nothing comes between me and my" campaign in the last quarter of the financial year ended 30 June 2019. The campaign had an estimated reach of 83% of 18 to 39 year olds in Sydney, Melbourne and Brisbane which amounted to an estimated 4.3 million people.

Current trade marks and pending applications 163 According to Mr Gray, as at August 2020 Zipmoney Payments was the owner of the following registered Australian trade marks in class 36 and had the following pending trade mark applications also in class 36: Priority Date Mark Trade Mark Number Status 7 July 2017 1857616 Registered 31 July 2017 INTEREST FREEDOM 1862508 Registered 27 April 2018 OWN THE WAY YOU PAY 1922923 Registered 21 December 2018 ZIP 1977513 Pending 21 December 2018 ZIP MONEY 1977514 Pending 21 December 2018 ZIP PAY 1977515 Pending 21 December 2018 1977516 Registered 21 December 2018 OWN IT NOW, PAY LATER 1977517 Pending 21 December 2018 OWN IT NOW, PAY LATER, INTEREST FREE 1977518 Pending 21 December 2018 OWN IT NOW, INTEREST FREE 1977519 Pending 21 December 2018 ZIP CARD 1977520 Pending 21 December 2018 ZIP BILLS 1977521 Pending 21 December 2018 ZIP BIZ 1977522 Pending 21 December 2018 1977523 Pending 7 June 2019 ZIP ANYWHERE 2014916 Pending 30 July 2020 ZIP BUSINESS 2107867 Pending 7 August 2020 TAP & ZIP 2108801 Pending

164 This proceeding was commenced on 20 June 2019. There was evidence of the following further trade mark applications which were made after that date by Zipmoney Payments: (1) application no. 2107867 on 30 July 2020 for ZIP BUSINESS in classes 9, 36 and 42; (2) application no. 2108801 on 7 August 2020 for TAP & ZIP in classes 9, 36 and 42; (3) application no. 2165839 on 24 March 2021 for ZIP in classes 9, 35, 36 and 42; (4) application no. 2184229 on 4 June 2021 for in classes 9, 35, 36 and 42; and (5) application no. 2206801 on 31 August 2021 for CAN I ZIP IT? in classes 9, 35, 36 and 42.

First awareness of Firstmac 165 Mr Diamond believes that he was aware of Firstmac before Zipmoney Pty Ltd received the 2013 Adverse Reports (see [84] above). He does not recall when or how he first became aware of Firstmac, but thinks it is likely in one of his previous roles in finance. Mr Diamond has become somewhat familiar with Firstmac and its business as a result of this proceeding, but he was not otherwise aware in any detail of the type of business it operated. 166 When Mr Diamond decided to use the ZIP brand, he was not aware that Firstmac had offered a loan product under the description ZIP or that it had a trade mark registration for the word ZIP. Even when Zipmoney Pty Ltd received the 2013 Adverse Reports, he did not focus on those matters. Firstmac did not cross Mr Diamond's mind during the planning or launch of the ZIP business and he did not adopt the names ZIP and ZIP MONEY in an attempt to link the ZIP business in any way to Firstmac. 167 Mr Diamond also said that in conducting the ZIP business, he has never attempted to associate it with Firstmac or its products. To the contrary, he and the team in the ZIP business have attempted to develop a strong and independent brand identity for the ZIP business, a matter which he regards as critical to the success of the ZIP business. It has never been suggested to Mr Diamond by a consumer or a member of the finance trade that the ZIP business is in any way associated with Firstmac. 168 Mr Gray does not recall when he first became aware of Firstmac. Given his background in the finance industry he believes that it is likely that he was aware of Firstmac as a mortgage provider before he started working on the ZIP business. However, he never paid particular attention to Firstmac's business and he too has only become more familiar with it as a result of this proceeding. At the time he and Mr Diamond were in the process of planning and launching the ZIP business, Mr Gray did not come across or think about Firstmac and was not aware of the Applicant's Mark. 169 In Mr Gray's dealings with the Zip Companies' investors since 2013, Merchants and Customers, they have never suggested to him that the ZIP business is associated in any way with Firstmac. Mr Gray is not aware of any instance of a consumer contacting the Zip Companies when they were in fact trying to contact Firstmac.

Attempt to contact Firstmac 170 In the meantime on 13 June 2018, in an email from Mr Diamond to Mr Gray and Philip Crutchfield QC, a director of Zip Co, Mr Diamond suggested a process by which he would seek a meeting with Kim Cannon, the owner of Firstmac. This was the first time that Mr Diamond suggested that an appropriate way forward was to seek to open a line of communication with Firstmac. 171 Mr Diamond contacted Mr Cannon and in return on 19 June 2018 he received an email from Rod Minell, executive director, Firstmac suggesting they speak. I infer that discussion took place as on 20 June 2018 Mr Minell sent an email to Mr Diamond which included: It is our intention to maintain ownership of the trademark. Thank you for expressing your interest.

Proceeding before the Registrar of Trade Marks 172 On 19 August 2016 Zipmoney Payments filed an application under s 92(4)(b) of the TM Act seeking removal of the Applicant's Mark from the Register (first non-use application). Firstmac filed a notice of intention to oppose the removal and a statement of particulars. Zipmoney Payments then filed a notice of intention to defend. 173 On 27 September 2018 a delegate of the Registrar of Trade Marks heard the matter and on 4 December 2018 the delegate published his decision: see Firstmac Ltd v Zipmoney Payments Pty Ltd [2018] ATMO 195 (Firstmac v Zipmoney). At [24] the delegate found that: The totality of the evidence demonstrates that [Firstmac] has been offering loan products under the [Applicant's Mark] from September 2005 and February 2013. [Firstmac] has continued to manage the ZIP product since then and at least until 11 November 2016, with correspondence and loan statements bearing the [Applicant's Mark]. 174 At [27] the delegate concluded that the evidence satisfied him that there "has been genuine commercial use of the [Applicant's Mark] with respect to the specified services in the registration during the relevant period". The relevant period for the purposes of s 92(4)(b) of the TM Act was the three years ending on 18 July 2016. 175 A certificate of use issued pursuant to s 105 of the TM Act by the Acting Deputy Registrar of the Trade Marks Office on 9 September 2019 (s 105 Certificate) provides: In compliance with the requirements of section 105 of the Trade Marks Act 1995 and in relation to proceedings brought by Zipmoney Payments Pty Ltd, I certify that the Registrar has found that trade mark number 1021128 registered in class 36 in the name of Firstmac Limited, has been used with respect to the specified services in the registration during the three year period ending on 18 July 2016.

2021 rebrand 176 In August 2021 Zipmoney Payments commenced a progressive rebranding, which included for example the following: 177 Mr Gray explained in cross-examination that it was undertaken in order to unify the brand given its recent acquisition in the United States of a buy now pay later business trading under the name QuadPay and to rebrand the latter with Zip. Mr Gray gave the following evidence: Mr Webb: And an opportunity was available at the moment that decision was made to investigate whether you might move from Zip in both markets to some entirely different branding? Mr Gray: Possibly, yes. Mr Webb: Yes. And why didn't you do that? Mr Gray: We - it wasn't on my radar. Mr Webb: It wasn't on your radar? Mr Gray: No. Mr Webb: No. And since August 2021, when this branding started, you've made no - you've held - you - by you, I mean the respondents - have held a fixed intention to stick with Zip. Is that correct? Mr Gray: We've intended to stick with Zip, yes. Mr Webb: Yes. To the extent that you've not investigated since August 2021 any possible - or made any possible - any planning for a possible move from Zip to marks that don't include Zip? Mr Gray: No.

Inconvenience if the ZIP business was required to rebrand 178 Mr Gray considers that, if as a result of this dispute, the Zip Companies were required to rebrand the ZIP business it would be a very substantial and expensive exercise and would require at least the following things to occur. 179 First, it would be necessary to identify a new brand that would be suitable for the business. This would involve both internal resources as well as external branding and marketing consultants and market research to test the way potential new brands are likely to be received by Merchants and Customers. Secondly, once a new brand was selected the process of rolling it out would involve a considerable amount of work including: (1) the development of style guides for internal use; (2) the development of guides for Merchants as to how the new brand can be used (both physically and online); (3) securing a new website(s) for the ZIP business and re-branding existing content for that new website; (4) the re-development of the Zip App to reflect the new branding; (5) securing new social media accounts to promote the newly adopted brand; (6) designing and implementing an education campaign for Merchants to ensure that the transition from the ZIP brand to the new brand is effective; (7) designing and implementing an education campaign for Customers to ensure that they are aware that the ZIP business is on-going, but operating under a different brand; (8) the preparation and distribution of new in-store and point-of-sale promotional materials (such as signage, decals, brochures etc.) to physical retail stores around the country; and (9) providing a comprehensive support program to retailers which operate online to assist them to adjust their online references to the ZIP business and to ensure that any links on their websites point to the new website for the ZIP business. 180 Mr Gray also noted that one of the significant issues the Zip Companies would face if required to rebrand would be the loss of the very substantial goodwill they have built up over the last seven years in the name ZIP. Mr Gray believes that goodwill is a very important aspect of the ZIP business and its success and that it would be very difficult to rebrand in a manner that successfully transferred much of the goodwill to the new brand. In addition, the ZIP business now operates in three countries: Australia, New Zealand and the UK. An important part of the Zip Companies' branding strategy is to have a single brand across those regions. Accordingly, if a rebrand was required in Australia it would also be necessary to consider how this could be implemented in New Zealand and the UK. 181 Given the variables involved in a rebranding exercise Mr Gray was not able to give a precise estimate of the time and cost that would be involved. However he said that some guidance was provided by the cost incurred when the Zip Companies updated their branding in 2018 (see [153]-[157] above) which involved costs in excess of $1 million. Mr Gray noted that the ZIP business had expanded dramatically since 2018, as at 30 June 2020 the ZIP business had 24,317 Merchants and 1,871,485 Customers in Australia, and a complete rebrand would involve a great deal more work than the 2018 brand update. Accordingly, he believes that a complete rebrand would involve costs that are several times greater than the cost of the 2018 brand update and likely to be in the many millions of dollars.

Firstmac's infringement claim 182 Firstmac relies on an amended originating application and a further amended statement of claim (FASOC). In its FASOC Firstmac alleges that: (1) since at least 2013 the Zip Companies had used signs for or containing ZIP as trade marks, including in stylised forms as depicted in the FASOC (referred to as the Respondents' Marks and reproduced in Annexure A), and the domain name www.zip.co in relation to the provision of credit services by way of loans, lines of credit, point of sale credit, interest free finance and reusable accounts (referred to as the Respondents' Services); (2) each of the Respondents' Marks is substantially identical with, or in the alternative deceptively similar to, the Applicant's Mark; (3) the Respondents' Services are services in respect of which the Applicant's Mark is registered, namely "financial affairs (loans)", or in the alternative are services of the same description in respect of which the Applicant's Mark is registered; (4) Firstmac has not licensed or approved the Zip Companies' use of the Respondents' Marks; and (5) by reason of the matters set out above: the Zip Companies have infringed the Applicant's Mark and they threaten to continue to engage in the conduct as alleged and, unless restrained, will do so; Firstmac has suffered loss and damage by reason of the Zip Companies' infringement of its mark; and by reason of that conduct the Zip Companies have wrongfully made, and will continue to make, profits which it would be unconscionable for them to retain. 183 The Zip Companies rely on their defence to the FASOC in which, among other things, they: (1) admit use of the Respondents' Marks and domain names set out at [140] above from the dates set out in the defence in respect of "payment and credit services"; (2) admit that the name and trade mark ZIP is substantially identical to the Applicant's Mark; (3) deny that each of the Respondents' Marks is deceptively similar to the Applicant's Mark; (4) subject to a denial as to the extent or description of the Respondents' Services, admit that their "credit and payment services" are services, or in the alternative are services of the same description, in respect of which the Applicant's Mark is registered; (5) admit that Firstmac has not licensed or approved their use of the Respondents' Marks but say that they do not require any licence or approval for their conduct; and (6) deny that they have infringed the Applicant's Mark. 184 In answer to Firstmac's claim the Zip Companies: (1) rely on the defences in subs 122(1)(f) and (fa) of the TM Act and say that they would obtain registration of the name and trade mark ZIP in one or other of their respective names if they were to apply for it; (2) rely upon the defence set out in s 122(1)(a)(i) of the TM Act and contend that their use of the name and trade mark ZIP MONEY, simpliciter and in stylised forms, constitutes use in good faith of each of their corporate names and that their use of the name and trade mark ZIP, simpliciter and in stylised forms, constitutes use in good faith of Zip Co's corporate name; and (3) contend that Firstmac is precluded from obtaining any remedies in relation to the Applicant's Mark by reason of estoppel, acquiescence, delay and/or laches. 185 The Zip Companies also rely on their cross-claim, which is described and addressed below. 186 Having regard to the pleadings the following admissions are made by the Zip Companies in relation to the claim against them: (1) they have used ZIP as a trade mark, in plain and stylised forms, since about June 2013; (2) they have used ZIP PAY and ZIP MONEY as trade marks in plain and stylised forms; (3) the word ZIP is substantially identical with the Applicant's Mark, being ZIP; (4) their "credit and payment services" are services, or services of the same description, in respect of which the Applicant's Mark is registered; and (5) they did not have the licence or approval of Firstmac. 187 It follows that it was not in dispute that the word ZIP simpliciter is substantially identical with the Applicant's Mark, that the Zip Companies' "credit and payment services" are services in respect of which the Applicant's Mark is registered and that those services are services of the same description. Therefore, subject to the Zip Companies' defences, the issue between the parties is whether the other marks used by the Zip Companies are substantially identical with or deceptively similar to the Applicant's Mark.

Statutory framework and legal principles 188 Section 120 of the TM Act relevantly provides that a person infringes a registered trade mark if the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to: (1) services in respect of which the trade mark is registered (see subs (1)); or (2) services of the same description as that of services in respect of which the trade mark is registered, but subject to a defence that the person is not taken to have infringed the trade mark if the person establishes that using the sign as the person did is not likely to deceive or cause confusion (see subs (2)(c)). 189 Section 10 of the TM Act provides that "a trade mark is taken to be deceptively similar to another trade mark if it so nearly resembles that other trade mark that it is likely to deceive or cause confusion". 190 In Shell Company of Australia Ltd v Esso Standard Oil (Australia) Ltd (1963) 109 CLR 407 at 414 Windeyer J set out the test for whether two marks are substantially identical: In considering whether marks are substantially identical they should, I think, be compared side by side, their similarities and differences noted and the importance of these assessed having regard to the essential features of the registered mark and the total impression of resemblance or dissimilarity that emerges from the comparison. "The identification of an essential feature depends", it has been said, "partly on the Court's own judgment and partly on the burden of the evidence that is placed before it": de Cordova v. Vick Chemical Co. Whether there is substantial identity is a question of fact: see Fraser Henleins Pty Ltd v. Cody per Latham C.J., and Ex parte O'Sullivan; Re Craig per Jordan C.J., where the meaning of the expression was considered. (Footnotes omitted.) 191 In Self Care IP Holdings Pty Ltd v Allergan Australia Pty Ltd [2023] HCA 8 the High Court (Kiefel CJ, Gageler, Gordon, Edelman and Gleeson JJ) considered the operation of s 120 of the TM Act. At [22] the Court observed that there were two separate and essential elements to establishing infringement under s 120(1) of the TM Act. The first was that the person has "use[d] as a trade mark" a sign in relation to goods or services; and the second is that the trade mark was "substantially identical" or "deceptively similar" to a trade mark registered in relation to those goods or services. 192 As to the test for deceptive similarity, at [26] of Self Care the High Court stated that the task was one of trade mark comparison and that the resemblance between the two marks must be the cause of the likely deception or confusion. At [27]-[29] their Honours said: 27 The principles for assessing whether a mark is deceptively similar to a registered trade mark under s 120(1) are well established. In Australian Woollen Mills Ltd v F S Walton & Co Ltd, Dixon and McTiernan JJ explained the task in these terms: "But, in the end, it becomes a question of fact for the court to decide whether in fact there is such a reasonable probability of deception or confusion that the use of the new mark and title should be restrained. In deciding this question, the marks ought not, of course, to be compared side by side. An attempt should be made to estimate the effect or impression produced on the mind of potential customers by the mark or device for which the protection of an injunction is sought. The impression or recollection which is carried away and retained is necessarily the basis of any mistaken belief that the challenged mark or device is the same. The effect of spoken description must be considered. If a mark is in fact or from its nature likely to be the source of some name or verbal description by which buyers will express their desire to have the goods, then similarities both of sound and of meaning may play an important part." 28 The question to be asked under s 120(1) is artificial - it is an objective question based on a construct. The focus is upon the effect or impression produced on the mind of potential customers. The buyer posited by the test is notional (or hypothetical), although having characteristics of an actual group of people. The notional buyer is understood by reference to the nature and kind of customer who would be likely to buy the goods covered by the registration. However, the notional buyer is a person with no knowledge about any actual use of the registered mark, the actual business of the owner of the registered mark, the goods the owner produces, any acquired distinctiveness arising from the use of the mark prior to filing or, as will be seen, any reputation associated with the registered mark. 29 The issue is not abstract similarity, but deceptive similarity. The marks are not to be looked at side by side. Instead, the notional buyer's imperfect recollection of the registered mark lies at the centre of the test for deceptive similarity. The test assumes that the notional buyer has an imperfect recollection of the mark as registered. The notional buyer is assumed to have seen the registered mark used in relation to the full range of goods to which the registration extends. The correct approach is to compare the impression (allowing for imperfect recollection) that the notional buyer would have of the registered mark (as notionally used on all of the goods covered by the registration), with the impression that the notional buyer would have of the alleged infringer's mark (as actually used). As has been explained by the Full Federal Court, "[t]hat degree of artificiality can be justified on the ground that it is necessary in order to provide protection to the proprietor's statutory monopoly to its full extent". 193 It is not necessary to establish actual probability of deception or confusion. However, a mere possibility of confusion is not enough. There must be a real, tangible danger of deception or confusion occurring. It is enough if the notional buyer would entertain a reasonable doubt as to whether, because of the resemblance between the two marks, the two products came from the same source or, put another way, there must be a real likelihood that some people will wonder whether the two products come from the same source: see Self Care at [32].

The Zip Companies' submissions 194 The Zip Companies submit that, with the exception of the name ZIP simpliciter, the trade marks used by them are not substantially identical with, or deceptively similar to, the Applicant's Mark. 195 They submit that those marks either: (1) incorporate distinctive graphic elements which serve to distinguish them visually from the Applicant's Mark; or (2) include an additional word or words which serve to distinguish them both visually and aurally from the Applicant's Mark; or (3) are distinguished from the Applicant's Mark by their presentation as domain names (with the exception of www.zip.co) by the presence of other words, in order to function as domain names, the suffixes ".com.au" and ".co" play a critical role and it is artificial to disregard such an important feature of a domain name in the assessment of substantial identity. 196 The Zip Companies submit that the branding that was used by them between 2018 and late 2021 clearly illustrates the distinctive elements, being a prominent and memorable "Z" device and a notable use of colour, which distinguished the branding from the Applicant's Mark, and that the same can be said of the branding that has been in use since late 2021. 197 The Zip Companies contend that Firstmac's case in relation to deceptive similarity should fail for the fundamental reason that there is no likelihood of confusion arising from their conduct and that the Court may be confident in this because the use of ZIP and related brands by them since 2013 has not given rise to a single instance of confusion, an issue with which Firstmac does not grapple.

Substantially identical 198 The first question to resolve is whether the stylised marks of the word ZIP used by the Zip Companies are substantially identical to the Applicant's Mark. 199 The marks in issue are:

(collectively, the Stylised Zip Marks.) 200 The Zip Companies submitted that these trade marks are not substantially identical to the Applicant's Mark because they each incorporate distinctive graphic elements such as colour or italicised font or, in the case of one of them, an additional logo. 201 The test for substantial identicality was not in dispute. It requires that the two marks in question be compared side by side, their similarities and differences noted and the importance of these assessed having regard to the essential features of the registered mark and the total impression of resemblance or lack of it that emerges from the comparison. 202 The essential element in the Applicant's Mark and in the Stylised Zip Marks is the word ZIP. The word is the same in the Applicant's Mark and in each of the Stylised ZIP Marks. There are also differences: first, each of the Stylised Zip Marks appears in different colours; two of them have a triangle over the "i" in ZIP; and one of them has the addition of what Firstmac terms the "funky Z-device" appearing before the word ZIP. However, none of these alterations or additions "substantially affect the identity of the trade mark": see s 7(1) of the TM Act. 203 As to the latter, i.e. the addition of the "funky Z-device", in E & J Gallo Winery v Lion Nathan Australia Pty Ltd (2010) 241 CLR 144 the High Court considered a submission that use of a trade mark consisting of the word BAREFOOT in combination with a device, an illustration of a bare foot, was not use of the registered trade mark, BAREFOOT simpliciter. At [69] a plurality of the High Court (French CJ, Gummow, Crennan and Bell JJ) relevantly said: … The addition of the device to the registered trade mark is not a feature which separately distinguishes the goods or substantially affects the identity of the registered trade mark because consumers are likely to identify the products sold under the registered trade mark with the device by reference to the word BAREFOOT. The device is an illustration of the word. The monopoly given by a registration of the word BAREFOOT alone is wide enough to include the word together with a device which does not substantially affect the identity of the trade mark in the word alone. So much is recognised by the terms of s 7(1), which speak of additions or alterations which "do not substantially affect the identity of the trade mark". Except for a situation of honest concurrent use, another trader is likely to be precluded from registering the device alone while the registered trade mark remains on the Register. The device is an addition to the registered trade mark that does not substantially affect its identity. Accordingly, the use of the registered trade mark with the device constitutes use of the registered trade mark in accordance with s 7(1). 204 The same applies here. That is, the addition of the "funky Z-device" does not distinguish the services nor substantially affect the identity of the mark. Consumers are likely to identify the products sold under the mark by reference to the word ZIP. That the "funky Z-device" is separately registered (see [163] above) does not alter this conclusion. 205 In addition, the Applicant's Mark and the Stylised Zip Marks are the same aurally. That is they sound the same when spoken and heard. 206 Finally, to the extent it is in dispute, the domain name www.zip.co is also substantially identical to the Applicant's Mark. That is because when one considers domain names, one puts aside in the analysis "the various accoutrement of domain names such as 'www' and 'com.au'", and in this case ".co", to which consumers pay little attention: see Solarhart Industries Pty Ltd v Solar Shop Pty Ltd (2011) 92 IPR 165; [2011] FCA 700 at [49]. 207 For those reasons I am satisfied that the Stylised Zip Marks and the domain name www.zip.co are substantially identical to the Applicant's Mark.

Deceptive similarity 208 The next question to resolve is whether the remaining marks used by the Zip Companies are deceptively similar to the Applicant's Mark. 209 The marks in issue are those at items 7-25 of Annexure A to these reasons (for ease I will refer to these marks collectively as ZIP Formative Marks). They comprise both word and stylised marks but in each case they incorporate the word ZIP with an additional word or words and, in two cases, the addition of a word and a device. By way of example they include: ZIP PAY ZIP MONEY ZIP BUSINESS 210 As to these marks, Firstmac submits that the essential feature of the mark in each case, or the dominant cognitive queue, is the word ZIP, which is identical to the Applicant's Mark, and that the addition of words like "pay", "money", "bills" or "biz" add nothing. They are "mere descriptive elements, which are not apt to perform this distinguishing role in respect of the relevant goods or services". 211 Firstmac submits that, as it comprises the totality of the registration, the word ZIP is what people will carry away and retain with them and this is the striking feature of each of the marks. It contends that, when confronted with the mark, as they are used in respect of the same services, people "will be caused to wonder whether it might not be the case that the two products came from the same source" whether arising from an association or as a brand extension, as the Zip Companies describe them. 212 The question for the Court is whether the ZIP Formative Marks so closely resemble the Applicant's Mark for financial affairs (loans) in class 36 that they are likely to deceive or cause confusion about the source of the services. That is whether there is a real, tangible danger of deception or confusion occurring by reason of use of the ZIP Formative Marks. As set out above, that question is not to be answered by a side by side comparison of the Applicant's Mark and each of the ZIP Formative Marks. The test assumes that the notional buyer has an imperfect recollection of the registered mark. The notional buyer is assumed to have seen the registered mark used in relation to the full range of services to which the registration extends. There is to be a comparison of the impression (allowing for imperfect recollection) that the notional buyer would have of the registered mark (as notionally used on all of the services covered by the registration), with the impression that the notional buyer would have of the alleged infringer's mark (as actually used). 213 In my opinion, for the following reasons there is no real tangible danger of deception or confusion occurring from use of the ZIP Formative Marks. 214 The Applicant's Mark and each of the ZIP Formative Marks use the word ZIP. But that is where the similarity begins and ends. Each of the ZIP Formative Marks includes an additional word or words which serves to distinguish them from the Applicant's Mark in the following ways. 215 First, the ZIP Formative Marks are made up of two or more ordinary English words: "zip" and "money"; "zip" and "pay"; "zip" and "business"; "zip" and "it"; "zip" and "bills"; "zip" and "card"; "zip" and "tap"; "zip" and "trade"; "zip", "just" and "it"; and "can", "I," "zip" and "it". The notional buyer is likely to recall that fact which serves to distinguish the ZIP Formative Marks both visually and aurally from the Applicant's Mark. 216 Secondly, contrary to Firstmac's submission, I do not accept that the essential feature of each of the ZIP Formative Marks is the word ZIP. In my view, in each of the ZIP Formative Marks, neither of the two words - and in the case of more than two words, none of the words - used takes prominence. For example in the mark ZIP PAY, neither the word ZIP nor the word PAY can be characterised as the essential feature of the mark; neither takes prominence. I reached the same conclusion in Gain Capital UK Ltd v Citigroup Inc (No 4) (2017) 123 IPR 234; [2017] FCA 519 in relation to the mark CITYINDEX, when compared to the mark CITI. At [107]-[108] I said [107] Fourthly, neither the word "city" nor the word "index" take prominence in the CITYINDEX Mark. Contrary to Citigroup's submission, I do not accept that the word "city" is the essential feature of the CITYINDEX Mark. In Coca-Cola Co v PepsiCo Inc (No 2) (2014) 322 ALR 505; 109 IPR 429; [2014] FCA 1287 (Coca-Cola) at [226] Besanko J, referring to a passage from Saville Perfumery Ltd v June Perfect Ltd (1939) 1B IPR 440; 58 RPC 147, said: Lord Greene MR in Saville Perfumery at IPR 453; RPC 162, referred to the fact that traders' customers often do not carry in their head the details of particular marks: In such cases the mark comes to be remembered by some feature in it which strikes the eye and fixes itself in the recollection. Such a feature is referred to sometimes as the distinguishing feature, sometimes as the essential feature, of the mark. [108] Where no component of a mark is "sufficiently prominent" a mark may not have any essential features: REA Group Ltd v Real Estate 1 Ltd (2013) 217 FCR 327; 102 IPR 1; [2013] FCA 559 at [232]. In my opinion, the word "CITY" in the CITYINDEX Mark no more strikes the eye and fixes itself in recollection than the word "INDEX". Both words are, as I have already observed, ordinary English words and neither can, in my opinion, be characterised as an essential feature of the mark. 217 In Energy Beverages LLC v Cantarella Bros Pty Ltd (2022) 165 IPR 301; [2022] FCA 113 Halley J found that the use of the trade mark "Mothersky" in relation to coffee was not deceptively similar to the registered trade mark "Mother" which covered beverages. Among other things at [323] his Honour found that "the MOTHERSKY mark comprises a single invented word, where 'Mother' is absorbed within the word 'Mothersky' and the emphasis and impression conveyed is not on the word 'Mother'". The same may be said in relation to ZIP when compared to "ZIPPAY", "ZIPMONEY" and "ZIPTRADE". They are single invented words, with no established meaning, where ZIP is absorbed within the made up words, "ZIPPAY", "ZIPMONEY" or "ZIPTRADE", and the emphasis and impression conveyed is not on the word ZIP. 218 Thirdly, since 2018 the Zip Companies have used the ZIP Formative Marks in a stylised form: (1) between 2018 and 2021 they used, among others, the following marks: (2) since 2021 they have used, among others, the following marks: 219 These stylised marks have distinctive elements and a use of colour. The notional buyer is likely to recall or be left with the impression that the appearance of the ordinary English words used in those marks is stylised, with the words appearing in different fonts and colours and in some cases with an accompanying device, serving to distinguish them visually from the Applicant's Mark. 220 The next issue is whether the notional buyer would be caused to wonder whether the services came from the same source. As set out above, the context in which the relevant services are acquired is also relevant to the inquiry of whether the notional buyer would be caused to wonder whether the services came from the same source, having regard to the similarities, limited though they are, between the Applicant's Mark and the ZIP Formative Marks. 221 The services offered by Firstmac under the Applicant's Mark, financial affairs (loans), were offered online and through mortgage brokers and other intermediaries and, since the relaunch in 2018, initially only through loans.com.au, then expanded and offered through third party broker channels. The notional buyer may have a recollection of the Applicant's Mark being used in connection with a home loan product. In contrast, the ZIP Formative Marks are used in relation to credit products for small loans offered to consumers either online or in retail stores when purchasing goods. While both services can be acquired online, they concern different types of loan products. The loans offered under the ZIP Formative Marks are short term and for smaller amounts to be applied for and approved with some speed, hence the use of the word "ZIP". The loans offered under the Applicant's Mark are necessarily for larger amounts and require more time and the provision of necessary information for approval and settlement. In those circumstances, there is no real tangible danger of confusion or deception between the Applicant's Mark on the one hand and the ZIP Formative Marks on the other. 222 Finally despite use by the Zip Companies of the ZIP Formative Marks since at least early 2014, there was no evidence of any actual confusion among consumers. 223 I turn then to the domain names www.zipmoney.com.au, www.zippay.com.au and www.zipmoneylimited.com.au. While, contrary to the Zip Companies' submission, I do not accept that the suffixes ".com.au" have a critical role to play in relation to the assessment of substantial identity or otherwise (see [206] above), my findings above apply equally to those domain names when viewed without that "accoutrement". 224 It follows that the ZIP Formative Marks and the domain names referred to in the preceding paragraph are not deceptively similar to the Applicant's Mark.

Defences 225 As set out at [184] above the Zip Companies rely on the defences in subs 122(1)(f), (fa) and (a) in answer to Firstmac's claim of infringement by it of the Applicant's Mark. I address these defences in turn below.

Section 122(1)(f) and (fa) of the TM Act: the Zip Companies would obtain registration in their own name 226 Sections 122(1)(f) and (fa) of the TM Act provide that in spite of s 120 of the TM Act a person does not infringe a trade mark if: (1) 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 (subs (1)(f)); or (2) both the person uses a trade mark that is substantially identical with or deceptively similar to the first mentioned trade mark and the court is of the opinion that the person would obtain registration of the substantially identical or deceptively similar trade mark in his or her name if the person were to apply for it (subs (1)(fa)). 227 The Zip Companies have the onus of proving the application of one or other of these defences. They seek to do so by relying on s 44(3)(a) of the TM Act as the basis on which they say they would obtain registration of the trade mark ZIP simpliciter and in stylised forms and, to the extent I am found to be wrong in relation to my finding on deceptive similarity, the ZIP Formative Marks. 228 Section 44(3) of the TM Act provides: If the Registrar in either case is satisfied: (a) that there has been honest concurrent use of the 2 trade marks; or (b) that, because of other circumstances, it is proper to do so; the Registrar may accept the application for the registration of the applicant's trade mark subject to any conditions or limitations that the Registrar thinks fit to impose. If the applicant's trade mark has been used only in a particular area, the limitations may include that the use of the trade mark is to be restricted to that particular area. (Note omitted.)

Legal principles 229 The doctrine of honest concurrent use, as referred to in s 44(3)(a) of the TM Act, contemplates that two or more traders might be proprietors of, and have legitimate rights in, trade marks that are the same, substantially identical or deceptively similar: see Campomar Sociedad, Limitada v Nike International Ltd (2000) 202 CLR 45 at 69-70. 230 In McCormick & Co Inc v McCormick (2000) 51 IPR 102; [2000] FCA 1335 at [30] Kenny J said the following about the operation of s 44(3) of the TM Act: Section 44(3) gives the registrar a discretion to accept an application that would otherwise be rejected under s 44(1) in the case of honest concurrent use or other circumstances making it proper to do so. The authorities establish that the principal criteria for determining whether registration should be permitted pursuant to s 44(3) include: (1) the honesty of the concurrent use; (2) the extent of the use in terms of time, geographic area and volume of sales; (3) the degree of confusion likely to ensue between the marks in question; (4) whether any instances of confusion have been proved; and (5) the relevant inconvenience that would ensue to the parties if registration were to be permitted. Her Honour noted that these factors are not necessarily exhaustive but are a useful guide, citing Re Electrix Ltd's Application [1957] RPC 369 at 379. 231 At [32] of McCormick Kenny J said the following about the concept of "honesty" for the purposes of s 44(3) of the TM Act: The honesty of concurrent use refers to "commercial honesty, which differs not from common honesty": see Re Parkington & Co Ltd's Application (1946) 63 RPC 171 at 182. In that case, Romer J said at 181-2: [T]he circumstances which attend the adoption of a trade mark in the first instance are of considerable importance when one comes to consider whether the use of that mark has or has not been a honest user. 232 In Tivo Inc v Vivo International Corporation Pty Ltd [2012] FCA 252 at [246] Dodds-Streeton J identified the factors that might be taken into account in assessing honest concurrent use as follows: Honesty in this context has been held to mean "commercial honesty". Relevant authorities have taken into account a number of factors in determining whether the applicant adopted the trade mark without knowing of the earlier mark or in the honest belief that no confusion would arise or business be diverted by use of the name. They include: (a) whether the words which make up the trade mark are common, everyday words. If they are, it is more likely that the use will be found to be honest than would be the case if the words are "invented" or are not such as to be obviously attractive to other traders; (b) the subsequent conduct of the applicant; (c) the likelihood of confusion; (d) the applicant's knowledge of the opponent's mark; and (e) whether the adoption of the mark, and the continued use of it, was surreptitious. 233 In Dunlop Aircraft Tyres Ltd v The Goodyear Tire & Rubber Co (2018) 262 FCR 76 at [266] after referring to McCormick at [30] and [32], Nicholas J said: Knowledge of the existing registration is of little importance once it is accepted that the trade mark applicant's use has been honest. However, as Lord Tomlin explained in Re Alex Pirie & Sons Ltd's Application (1933) 50 RPC 147 at 159: … but when once the honesty of the user has been established the fact of knowledge loses much of its significance, though it may be a matter not to be wholly overlooked in balancing the considerations for and against registration. 234 I was referred to a number of cases in which the Court considered the effect of knowledge of an earlier conflicting mark on honesty for the purposes of s 44(3)(a) of the TM Act. In some cases, knowledge did not preclude a finding of honest concurrent use in the face of other relevant facts: see for example McCormick at [33]. In others, the Court was not satisfied that there was honest concurrent use where the party seeking to rely on s 44(3) of the TM Act was aware of the prior mark (or its evidence seeking to establish the contrary was rejected as untruthful) and there was a failure to conduct any adequate searches before adopting the mark: see for example Tivo at [293]-[294]. The question of honest concurrent use was not in issue on appeal, in relation to which see Vivo International Corporation Pty Ltd v Tivo Inc (2012) 99 IPR 1; [2012] FCAFC 159 at [111]. 235 It is clear that the assessment of whether a party seeking to rely on s 44(3)(a) of the TM Act can establish honest concurrent use for the purposes of s 44(3) turns on the applicable facts in each case. 236 The application of subs 122(1)(f) and (fa) is to be assessed at the date of the alleged infringing conduct: see Anchorage Capital Partners Pty Ltd v ACPA Pty Ltd (2018) 259 FCR 514 at [212]-[217]; Sensis Pty Ltd v Senses Direct Mail and Fulfillment Pty Ltd (2019) 141 IPR 463; [2019] FCA 719 at [43]-[65].

Consideration 237 The question to be resolved is whether use by the Zip Companies of their marks was honest concurrent use. That is to be assessed as at the date of the alleged infringing conduct. In its FASOC Firstmac alleges that the first infringing conduct took place at some time in 2013 and that it thereafter took place at various times according to dates of adoption of different marks using the word ZIP. 238 The Zip Companies submitted that their defence of honest concurrent use should be upheld for the following reasons: (1) since the launch of the ZIP business in 2013, the Zip Companies have acquired very extensive goodwill in the trade mark ZIP, and variants of it such as ZIP MONEY and ZIP PAY. There could be no suggestion that they set out to cause confusion with Firstmac or that they have traded in a manner that has engendered such confusion. Accordingly the purpose of the honest concurrent use defence in s 44(3)(a) of the TM Act, that is the protection of accrued goodwill, is engaged; (2) they adopted and have used the trade mark ZIP, and variants of it, honestly; (3) their use of the trade mark ZIP, and variants of it, has been ongoing since 2013 throughout Australia and on a very substantial scale such that the extent of use is plainly sufficient to found the defence; (4) if the defence is upheld, the likelihood of confusion arising is very low. The parties have operated their respective businesses without incident for about eight years and there is no evidence of any confusion arising from the conduct of the Zip Companies; and (5) if they were required to rebrand their businesses it would cause very significant inconvenience to the Zip Companies and would see them lose the very substantial and valuable goodwill that they have developed in the trade mark ZIP and variants of it. 239 Firstmac submitted that the Zip Companies are not honest concurrent users for the following reasons: (1) when the Zip Companies chose the names they did so with a view to using those names as trade marks. Their pursuit of trade marks shows their appreciation and understanding of the importance of registration for protecting brands; (2) while "zip" is an ordinary English word with an accepted meaning, there is no suggestion that it lacks capacity to distinguish. Firstmac noted that is so for its registration and, importantly, for the Zip Companies; (3) at the earliest adoption of the marks Messrs Diamond and Gray assert that they did extensive searches but, even on their evidence, they limited themselves to internet searches about what might be in the market and, despite an appreciation of the importance of trade marks, they did not do the one obvious, prudent and sensible search, a trade mark search. There is no good explanation for why they did not do so; (4) relatedly, the Zip Companies were directly on notice from almost the very beginning of Firstmac's registrations given the 2013 Adverse Reports which Messrs Diamond and Gray read and, having done so, appreciated the simple but significant point that the Applicant's Mark stood in their way; (5) up until the listing, the Zip Companies' business was very small and they should have changed the name then, with little, if any, relative inconvenience. At that time the Applicant's Mark had been registered for almost nine years and in use for eight. Meanwhile there was limited use by Zipmoney Payments, it had very few Customers and even fewer Merchants and it had not expended significant resources on advertising and promotion of the ZIP or ZIP MONEY brand. The Zip Companies' conduct, including in attempting to get an extension for the 2013 trade mark applications and the filing of the 2015 trade mark applications, demonstrates an insistence on retaining the names they had chosen regardless of the rights of Firstmac, the registered owner. Assessed at the earlier time, when the infringing conduct started, the Zip Companies lack the requisite degree of honesty; (6) the Zip Companies lack the requisite degree of honesty a fortiori if their conduct is assessed at a later date. By at least 2016 or early 2017 the Zip Companies knew that Firstmac intended to defend its registration and was not going to abandon the field and, rather than dealing with the issue candidly, they chose to "plough on" and continue building up their business in the knowledge that their trade marks were at risk. Firstmac submitted that in choosing to conduct their commercial affairs in this way, the Zip Companies fell far short of acceptable standards of commercial behaviour and are the authors of their own misfortune. 240 I turn to consider whether the Zip Companies would be entitled to registration by reason of s 44(3) of the TM Act. In doing so it is convenient to have regard to the non-exhaustive list of categories identified in McCormick. 241 The first question is the honesty of the concurrent use. That is a necessary but not sufficient condition for a grant of registration under s 44(3) of the TM Act. 242 When Messrs Diamond and Gray adopted the trade marks ZIP and ZIP MONEY neither of them was aware of the Applicant's Mark. As set out above, it was Mr Diamond who came up with the names ZIP and ZIP MONEY in the second half of 2012. At the time, he considered that the word "ZIP" was a good name for the business he was researching and conceptualising because it connoted speed, consistent with his idea of providing finance in real time. He also added the word "money" because other finance businesses used the word "money" in their names and because it clearly indicated what the business is about and placed the product in its category. While he considered other potential branding, he preferred ZIP. 243 In seeking to register ZIP as a domain name, which was the first step Mr Diamond undertook, he undertook internet searches (see [72] and [76] above). Those searches revealed that the domain name www.zip.com was owned by Bank of America, which Mr Diamond understood had no operations in Australia at the time. On the strength of those searches, Mr Diamond registered the domain name www.zipmoney.com.au. 244 True it is that neither Messrs Diamond nor Gray undertook any trade mark searches at the time nor prior to lodging the 2013 trade mark applications. Mr Diamond explained that at the time he believed he had conducted extensive online domain searches, that registering a trade mark would be a straightforward process and did not seek legal advice because at the time they had limited funds and he wished to avoid any unnecessary spend, which he considered legal advice of this nature to be. 245 Firstmac submitted that there is no good explanation as to why the Zip Companies failed to undertake searches of the Register and that common experience shows that internet searches can be intermittent and incomplete, given they are dependent on a range of variables including types of browsers, user history and the like. Firstmac contended that, critically, despite an appreciation of the importance of trade marks, Messrs Diamond and Gray did not undertake the one obvious and prudent search: a trade mark search. 246 There are two vices in Firstmac's submission. First, Mr Gray clearly said that the issue of trade mark registration was not in his area of responsibility. Although he accepted that it was an important matter, there was a lot going on in establishing the business at the time and branding and trade marks was not in his area of responsibility. Indeed he was not even aware that the 2013 trade mark applications had been made. Secondly, Mr Diamond's evidence as to why he only conducted online and domain searches was not challenged and, given the early stage of development of the ZIP business, his explanation for the types of searches he undertook is credible and I accept it. 247 Firstmac submitted that it is well established that: even if the second user did not know of the first user, the second user should have taken steps an honest and reasonable person would take to ascertain their ability to use the mark; and before adopting the mark, the second user must at least have exercised diligence and reasonable care to ensure that it did not conflict with a registered trade mark. 248 As to the first of those propositions, Firstmac relies on Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd (2017) 251 FCR 379 at [103] where a Full Court of this Court (Greenwood, Jagot and Beach JJ) upheld the primary judge's finding that the appellant's use was not honest concurrent use "given the unchallenged finding that there had been 'a lack of diligence and reasonable care in carrying out adequate searches before the marks were adopted for use'". At first instance, in Insight Radiology Pty Ltd v Insight Clinical Imaging Pty Ltd (2016) 122 IPR 235; [2016] FCA 1406, in considering whether there had been honest concurrent use, at [124] Davies J noted that no explanation was given in the evidence as to how Mrs Pham decided upon "Insight Radiology" and why she chose the word "insight" to brand the relevant business. At [125] her Honour said: The evidence does not support a finding that either Mr or Mrs Pham knew about the use of similar marks by Insight Clinical Imaging before Insight Radiology commenced using the Radiology marks. Nonetheless, I do not think that it can be said that there has been honest concurrent use of the Radiology marks. In Flexopack SA Tivo Inc v Vivo International Corp Pty Ltd [2012] FCA 252 at [293], Dodds-Streeton J found there had not been honest concurrent use in circumstances where, amongst other things, the applicant had failed to carry out an adequate search, seek professional advice or take reasonable precautions in relation to its adoption of a trade mark. In Flexopack SA Plastics Industry v Flexopack Aust Pty Ltd (2016) 118 IPR 239; [2016] FCA 235, Beach J considered that if a person does not take steps that an honest and reasonable person would take to ascertain the ability to use a trade mark, and has in effect taken a risk, then the person is not acting in good faith in the sense of "honestly" within the terms of the good faith "own name" defence under s 122(1)(a) of the Trade Marks Act. In the present case, I have accepted the expert's evidence that the Google search that Mrs Pham conducted would have come up with Insight Clinical Imaging. Had reasonable diligence been exercised by her at the time, it is reasonable to expect that she would have searched the website and found out that Insight Clinical Imaging was trading in the same field, using similar marks. Whilst there is insufficient evidence from which to conclude that she had looked at the website, the evidence does point to a failure on her part to conduct an proper and adequate search, either because her search was not sufficiently comprehensive to bring up the website in the search result or, if it did, because she failed to visit the website. Furthermore, no searches were done once the IR composite mark had been designed to check whether there were any similar marks used by other traders or before Insight Radiology commenced using the logo. These matters demonstrate a lack of diligence and reasonable care in carrying out adequate searches before the marks were adopted for use by Insight Radiology. It cannot be said that there has been "honest" concurrent use of the Radiology marks within the terms of s 44(3) when the searches, if conducted properly, would have come up with Insight Clinical Imaging's website and its similar marks. If Mr Pham was not aware of Insight Clinical Imaging's marks before he had Insight Radiology adopt and commence to use the Radiology marks, it was because of the inadequacies in the searches that were conducted and lack of care taken. 249 It seems that in that case there was evidence that the relevant person, Mrs Pham, undertook a Google search but that there was also expert evidence that such a search would have come up with the respondent's business, Insight Clinical Imaging. Her Honour also found that, had Mrs Pham exercised reasonable diligence, she would have searched the website and found that Insight Clinical Imaging traded in the same field and used similar marks. In those circumstances Davies J found that Mrs Pham failed to conduct a proper and adequate search. 250 There is no such evidence before me. In this case, Mr Diamond did undertake a search of the internet and has given evidence of what he found at the time. He also undertook subsequent searches. Firstmac has not led evidence and does not contend that Mr Diamond's internet searches were inadequate in that they should have brought up Firstmac's ZIP home loan at the time. Rather Firstmac suggests, without providing any evidence and based on "common experience", that an internet search is, in effect, only as good as the skill of the person undertaking the search and the variables inputted into the search. Firstmac's contention is that there was a failure to do the one obvious search, a trade mark search. But as I have already noted Mr Diamond was not challenged on why he had only conducted online and domain name searches. 251 As to second of the propositions at [247] above, Firstmac relies on Flexopack SA Plastics Industry v Flexopack Australia Pty Ltd (2016) 118 IPR 239; [2016] FCA 235 at [118] where Beach J, in the context of considering the good faith "own name" defence under s 122(1)(a) of the TM Act, said: If only subjective knowledge was relevant, a person could use the good faith defence despite not having taken any appropriate steps to inform himself of any relevant existing trade marks. This has the potential to undermine the utility of a registered trade mark. The reasonableness or lack thereof of the steps undertaken by the First Respondent in the choice of its company name is to be considered in light of the effect on the trade mark owner. If good faith were to be construed as merely being satisfied on the basis of a stated subjective belief that one did not know of the other, it could lead to a situation where one could justify trade mark use with one's ignorance. The failure to make proper inquiries should not place a respondent in a better position than if such inquiries had been made. 252 His Honour then went on to consider the second respondent's, Mr Katelis, background, including his background in business, and the evidence about the types of searches he conducted before concluding (at [150]), in effect, that the name in issue was not used in good faith". 253 In issue was the respondents' reliance on s 122(1)(a) of the TM Act and their use of the word "Flexopack" and whether that use was "in good faith". His Honour was not there considering honesty of use for the purposes of s 44(3) of the TM Act. In any event, as is clear from his Honour's reasons, the role of subjective evidence and the adequacy or otherwise of steps taken, including any searches, must be viewed both in the context of the particular defence relied on and the facts of each case. 254 Before leaving Flexopack I note that Beach J also considered s 44(3) of the TM Act and whether there was honest concurrent use. At [170] his Honour found that the respondent, Flexopack Australia Pty Ltd, had not demonstrated honest adoption of the trade mark in question. Relevantly, Beach J found the evidence of Mr Katelis to be unreliable and did not accept that he did not know of the applicant at the time Flexopack Australia adopted its company name and of the potential for confusion. His Honour also noted that Mr Katelis gave evidence that he never conducted a Google search before choosing the company name and that he described a "series of narrow searches" which were found to be "not realistic": see Flexopack at [140]-[142]. 255 Returning to the matter at hand, given my acceptance of Mr Diamond's evidence, I am satisfied that the steps taken by him at the time the trade marks ZIP and ZIP MONEY were first adopted were adequate in the circumstances. It follows that at the time of the adoption and initial use of ZIP and ZIP MONEY Messrs Diamond and Gray had no knowledge of the Applicant's Mark and accordingly their use at that time was honest use. 256 It was upon receipt of the 2013 Adverse Reports that Messrs Diamond and Gray became aware of other trade marks which prevented registration of the trade marks ZIP and ZIP MONEY as set out at [80] above and, in particular, became aware of the Applicant's Mark. That was in October 2013 at a time after they had adopted ZIP and ZIP MONEY for their business. Having received the 2013 Adverse Reports they were on notice of the Applicant's Mark. At the time Messrs Diamond and Gray did not seek any legal advice but extensions of time to respond to the 2013 Adverse Reports, made in Mr Diamond's name, were sought and granted, as the 2013 trade mark applications did not lapse until February 2015. Mr Diamond's evidence was that at that time he was distracted with establishing the business and so did not pay the 2013 Adverse Reports and the question of registration of ZIP and ZIP MONEY as trade marks much attention. 257 Given the filing of the application to extend time, I would infer that Mr Diamond read the 2013 Adverse Reports and had it in his mind that steps should be taken in relation to them. After all he acknowledged the prudence of having a trade mark which one wished to use in a business registered. Mr Diamond gave no evidence as to why he let the 2013 trade mark applications lapse and did not attend to them despite having sought an extension of time in which to do so. Firstmac contended that rather than changing the name at this point, the Zip Companies ploughed on despite knowing that the specification of services in Firstmac's registration applied to their products and services. 258 In McCormick Kenny J said at [33] that the mere fact that, at the time when Mr and Mrs McCormick chose the name McCormick's, Mrs McCormick knew of McCormick & Co's prior use of its marks on its products did not preclude a finding that Mrs McCormick acted honestly. See too the observations of Nicholas J in Dunlop at [266] (at [233] above). 259 Similarly, the mere fact that Messrs Diamond and Gray became aware of the Applicant's Mark does not prevent a finding of honest use. By the time they acquired that knowledge they had decided to use ZIP and ZIP MONEY and had invested in a designer who produced the ZIP logos depicted at [80] above. They had undertaken internet searches and lodged the 2013 trade mark applications. As the Zip Companies submitted it is artificial to suggest that, when Messrs Diamond and Gray became aware of the Applicant's Mark, their conduct which had been honest up to that point suddenly became dishonest. As a matter of fact there was no other trader using ZIP or ZIP MONEY in relation to the type of business conducted by the Zip Companies (or their predecessors at the time). As the Zip Companies submitted, against that background, the adoption of the marks ZIP and ZIP MONEY can be classified as commercially honest. 260 Nor am I persuaded that because the Zip Companies have over the years, and since becoming aware of the Applicant's Mark, filed applications to register variants of the trade mark ZIP, and continue to do so, they are acting in a way that is less than honest. There is nothing improper about the Zip Companies seeking to obtain registration of a variant of the trade mark ZIP and seeking to advance their interests in that way. 261 In Tivo the Court noted that a relevant matter going to honesty of use is whether the words which make up the trade mark are common, everyday words, noting that if they are it is more likely that the use will be found to be honest. The word "zip" is an ordinary English word. The Oxford English Dictionary gives it several meanings including: nothing at all, zero; absolutely no, not any; to move briskly or with speed; to cause to move quickly; to close, unfasten or open. Mr Diamond's evidence was that he chose ZIP because it evoked "fast movement successfully, which was consistent with [his] idea of providing finance in real time". 262 That ZIP is an ordinary English word and not invented also weighs in favour of a finding of honesty. It cannot be said that the Zip Companies were seeking to accrue to themselves the goodwill of another trader in an invented word. Mr Diamond chose an everyday word which he believed evoked the essence of the business he was creating. 263 I turn then to consider the other factors that inform the exercise of the discretion under s 44(3) of the TM Act. 264 As to relative inconvenience, at the time of receipt of the 2013 Adverse Reports the Zip Companies' business was nascent but, by the time that the 2013 trade mark applications lapsed in 2015, and prior to its backdoor listing via Rubianna Resources, it had started to grow. As at 30 June 2015 it had 6,212 Customers and a TTV of $4.8 million although its revenue from its credit facility business was modest, standing at approximately $400,000. 265 Firstmac said that at that stage, given the ZIP business was a relatively small business, it would have experienced little, if any, relative inconvenience if it changed its name. In contrast Firstmac says that it had been using the Applicant's Mark for eight years. 266 That submission ignores the matters set out at [264] above. Further the Zip Companies' use of the trade mark ZIP and variants of it has been ongoing since 2013 and has grown significantly over the years. As at 30 June 2019 they had 16,249 Merchants partnering with them, 1.3 million Customers and TTV of $1,127 million. These facts also demonstrate the extent of the use. In addition, Mr Gray's evidence was that if the Zip Companies were required to rebrand it would cause them significant inconvenience, loss of a substantial and valuable goodwill that they have developed in the trade mark ZIP, and variants of it, and would be both costly and time consuming (see [178]-[181] above). 267 In contrast, the ZIP home loan is a small part of Firstmac's business. Firstmac first promoted those home loans from about 2005 to 2014 but ceased offering the product at that time because, as Mr Gration conceded in cross-examination, it was not proving to be sufficiently successful. As at February 2020, there were 127 outstanding original ZIP home loans which had been originated in that initial period. Firstmac reintroduced a ZIP home loan product in 2018, i.e. the 2018 ZIP home loan. Confidential Annexure B to these reasons sets out: (1) the number and total value of loans originated by Firstmac since the relaunch of the 2018 ZIP home loan product; and (2) the total number and value of ZIP home loans relative to Firstmac's total loan book as compiled by the Zip Companies from material discovered by Firstmac and about which I did not understand there to be any dispute. On any view the amounts are modest and, when viewed in the context of Firstmac's total loan book, could be said to be negligible. 268 Further, contrary to Firstmac's submission, Firstmac will not lose the benefit of the Applicant's Mark if the Zip Companies' defence relying on honest concurrent use is upheld. Nor is it apparent that it will lose business to the Zip Companies given the different markets in which the two businesses operate and the fact that, as addressed below, there has been no demonstrated confusion in the market in the period in which the businesses have both operated. 269 Finally in terms of confusion, there is no evidence of any confusion having arisen despite the parties operating their respective businesses concurrently for eight years. Mr Diamond plainly stated that in conducting the Zip Companies' business he had never attempted to associate it with Firstmac or its products but rather had attempted to create an independent brand identity for that business (see [139] above). 270 In addition and as I have already observed, the services offered under the Applicant's Mark and those under the trade mark ZIP, and variants of it, are very different. Firstmac offers a ZIP home loan. A home loan by its very nature is a significant financial commitment, it is entered into with care after the provision of detailed information and it requires approval which usually takes time. In contrast, the Zip Companies offer a speedy or instantaneous facility for smaller amounts and for use in every day spending in a retail setting, either in-store or online. The two businesses operate in different markets. That was reinforced by Mr Gration who gave the following evidence in cross-examination: Mr Bannon: Now, could I take you to paragraph 54 of your affidavit please? Mr Gration: Yes. Mr Bannon: Or perhaps 53 first, I should say. You see: …became aware of Zipmoney Payments in around late August '16 or 15 September 2016. Mr Bannon: Do you see that? Mr Gration: Yes. Mr Bannon: So before that you hadn't been aware of them, correct? Mr Gration: Correct. Mr Bannon: And may we take it you monitored competitor activity during your time before 2016? Mr Gration: Sorry? I - I missed - - - Mr Bannon: May we take it as part of your role you monitored competitor activity? Mr Gration: Yes. Home loan competitor activity. Mr Bannon: Pardon? Mr Gration: Home loan competitor activity. Mr Bannon: Yes. Well, you monitor competitors who you perceive are operating in the same space as the company for which you work? Mr Gration: Correct. Mr Bannon: And the result of that monitoring did not throw up any recognition or understanding or reference to ZIP money? Mr Gration: Correct. 271 Having regard to the matters set out above, I am satisfied that the Zip Companies have established honest concurrent use of the trade mark ZIP, and the variants of it, and taking into account the factors addressed above that they would achieve registration pursuant to s 44(3) of the TM Act. It follows that, to the extent the Zip Companies have been found to have infringed the Applicant's Mark, their defence under subs 122(1)(f) or (fa) of the TM Act is made out such that there has been no such conduct.

Section 122(1)(a) of the TM Act: use of own name in good faith 272 The Zip Companies also rely on the defence under s 122(1)(a) of the TM Act which relevantly provides: In spite of section 120, a person does not infringe a registered trade mark when: (a) the person uses in good faith: (i) the person's name or the name of the person's place of business; or (ii) the name of a predecessor in business of the person or the name of the predecessor's place of business; or 273 The Zip Companies submit that: (1) Zip Co has a defence to infringement under s 122(1)(a)(i) of the TM Act insofar as it used the name: (a) ZIP MONEY or ZIPMONEY as a trade mark between 7 September 2015 and 7 December 2017, when its corporate name was Zipmoney Limited; and (b) ZIP as a trade mark from 7 December 2017 onwards, when its corporate name has been Zip Co Limited, because that conduct constitutes use of its corporate name in good faith; and (2) Zipmoney Payments has a defence to infringement under s 122(1)(a)(i) of the TM Act insofar as it has used the name ZIP MONEY because that conduct constitutes use of its corporate name in good faith. 274 Given that, to the extent of any infringement, I have upheld the defence under subs 122(1)(f) and (fa) of the TM Act, it is not strictly necessary for me to consider these defences, but I do so in the event that I am found to be wrong in both my findings as to the ZIP Formative Marks and as to the availability of the defence under subs 122(1)(f) and/or (fa) of the TM Act. 275 The defence in s 122(1)(a) of the TM Act is available both to individuals and companies. 276 In Anchorage Capital a Full Court of this Court (Nicholas, Yates and Beach JJ) at [207], in considering the "own name" defence, said: The authorities that have considered the defence under s 122(1)(a)(i) of the Act and similar provisions in the 1955 Act and the Trade Marks Act 1938 (UK) provides some guidance as to the circumstances in which a corporation may be regarded as having made use of its own name. The most well-known of these is Parker-Knoll Ltd v Knoll International Ltd (No 2) [1962] RPC 265, a case in which the defendant, Knoll International Ltd, was sued for passing off and infringement of the plaintiff's registered trade mark PARKER-KNOLL. The House of Lords accepted that the protection afforded by s 8(a) of the 1938 Act extended to the defendant's use not merely of its full corporate name, but also the natural abbreviation of that name to KNOLL INTERNATIONAL. However, the protection was held not to extend to the defendant's use of the word KNOLL. There were similar outcomes in Smith & Nephew Plastics (Australia) Pty Ltd v Sweetheart Holding Corporation (1987) 8 IPR 285 where King J held that s 64(1)(a) of the 1955 Act did not permit the respondent to use "Sweetheart" and SAP Australia Pty Ltd v Sapient Australia Pty Ltd (1999) IPR 169 169; [1999] FCA 1027 at [42]-[45] where Wilcox J observed (obiter) that neither "Sapient" nor "Sapient Corporation" could properly be regarded as the name of the respondent (Sapient Australia) for the purposes of s 122(1)(a) of the Act. 277 In Anchorage Capital the full name of the second respondent was Anchorage Capital Group LLC. At [208] the Full Court found that the second respondent's use of the name Anchorage Capital Group was within the scope of the protection afforded by s 122(1)(a)(i) of the TM Act but that the defence did not extend to use of the names Anchorage or Anchorage Capital. 278 It follows from the above that, subject to establishing that the use was in good faith, the Zip Companies can invoke the defence in the case of use of ZIP MONEY or ZIPMONEY in the period between 7 September 2015 and 7 December 2017. That is because ZIP MONEY or ZIPMONEY is a natural abbreviation of the corporate name Zipmoney Limited (the prior name of Zip Co) omitting only "Limited". 279 However, contrary to the Zip Companies' submissions: (1) ZIP is not a natural abbreviation of the corporate name Zip Co Limited. ZIP could not properly be regarded as the name of Zip Co Limited. It is not a simple abbreviation achieved by dropping "Limited" from the end of the corporate name. Relevantly, in SAP Australia Pty Ltd v Sapient Australia Pty Ltd (1999) 45 IPR 169; [1999] FCA 1027 Wilcox J observed at [33]: That entitlement has been held to apply to the use by a company of the whole of its name other than the concluding word "Ltd": see Parker-Knoll Ltd v Knoll International Ltd [1962] RPC 265 at 275. But the concession represented by that decision ought not be extended by permitting the jettisoning of other elements of a company's title, to the detriment of the rights of a registered trade mark proprietor. Neither "Sapient" nor "Sapient Corporation" can properly be regarded as the name of the respondent, Sapient Australia. (2) for the same reasons, ZIP MONEY is not a natural abbreviation of the corporate name Zipmoney Payments Pty Ltd. ZIPMONEY PAYMENTS would be a natural abbreviation of that company's name but ZIP MONEY or ZIPMONEY is not. 280 The next question to resolve is whether the use of ZIP MONEY or ZIPMONEY in the period identified above was use in good faith. 281 In Anheuser-Busch Inc v Budejovický Budvar, Národní Podnik (2002) 56 IPR 182; [2002] FCA 390 Allsop J (as his Honour then was) considered what was meant by use in good faith for the purposes of s 122(1)(a) of the TM Act. At [214]-[216] his Honour relevantly said: [214] The first respondent relied on what the Court of Appeal said in Baume & Co Ltd, above at 235, about the phrase "bona fide" in the equivalent United Kingdom legislation in the provision, which was as follows: The next point which was discussed before us was as to the meaning of "bona fide use" in s 8. Danckwerts J, said that he understood that "bona fide" normally "means the honest use by the person of his own name, without any "intention to deceive anybody or without any intention to make use of the "goodwill which has been acquired by another trader"; and in that sense he acquitted the defendants of any want of bona fides in the present case. We agree with the learned judge's definition of the term "bona fide" and we see no reason to attribute a different or special meaning to the phrase in its context in s 8. The mere fact in itself that a trader is using his own name which too closely resembles a registered trade name of which he is aware does not prevent the user from being "bona fide", provided that the trader honestly thought that no confusion would arise and if he had no intention of wrongfully diverting business to himself by using the name. The truth is that a man is either honest or dishonest in his motives; there is no such thing, so far as we are aware, as constructive dishonesty. In our judgment, if a trader is honestly using his own name, then no action will lie for infringement of trade mark and any rival trader who thinks himself aggrieved must sue, if at all, for passing off. [215] Notwithstanding what there appears about the clear distinction between honesty and dishonesty, notions of objective dishonesty are not foreign to the law of equity and related areas, for example, the law governing third party accessory liability in equity: Royal Brunei Airlines Sdn Bhd v Tan [1995] 2 AC 378 at 390; [1995] All ER 97 at 106-7. [216] Leaving this qualification to Baume & Co Ltd, above, aside, it is clear that the Court of Appeal required for there to be "bona fide use" that "the trader honestly thought that no confusion would arise". … 282 In Flexopack Beach J also considered the requirement of use in good faith. At [108]-[118] his Honour distilled the following principles: [108] Third, the requirement that the use be "in good faith" is a requirement of honesty (Optical 88 at [161] per Yates J). This requires an honest belief at least at the time of adopting the mark that no confusion would arise by reference to the earlier trade mark's reputation and that there was no intention to divert trade (Australian Postal Corporation v Digital Post Australia Pty Ltd (ACN 152 998 715) (2013) 308 ALR 1; 105 IPR 1; [2013] FCAFC 153 at [73] and [74] per North, Middleton and Barker JJ). But this is a necessary but not sufficient condition. [109] Fourth, an issue that had some focus during the trial was whether use that might once have been in good faith can still be characterised as such once the respondent became aware of the existence of the trade mark owner, the fact of its registration and/or of potential confusion that might arise in the marketplace. I will return to this issue later. [110] Fifth, a lack of good faith may be found where the person acts in a deliberate manner to take advantage of another party's reputation, in other words, is fraudulent or dishonest. But it does not necessarily follow, however, that in the absence of fraud or dishonesty, good faith is established. [111] The test to be applied is in one sense objective. If a person does not take steps that an honest and reasonable person would take to ascertain the ability to use a trade mark, and has in effect taken a risk, then they are not acting in good faith. If the Respondents are to avail themselves of this defence they must show that their conduct was in good faith. The onus rests on them. [112] Further, good faith might, for example, be shown by showing that legal advice was sought. In the present case, the Respondents do not rely on any such advice. [113] Sixth, the position in the United Kingdom, which deals with analogous legislation enforcing European Community Trade Marks, is not unhelpful in considering what conduct constitutes good faith. Council Regulation (EC) No 40/94 of 20 December 1993 on the Community Trade Mark Article 12 states as follows: A Community trade mark shall not entitle the proprietor to prohibit a third party from using in the course of trade: (a) his own name or address; … provided he uses them in accordance with honest practices in industrial or commercial matters. (emphasis added) [114] The United Kingdom applies an objective test. This provision was discussed by Arnold J in Hotel Cipriani SRL v Cipriani (Grosvenor Street) Ltd (2008) 79 IPR 621; [2008] EWHC 3032 (Ch) at [142]-[152] (Cipriani) (confirmed on appeal in Hotel Cipriani Srl v Cipriani (Grosvenor Street) Ltd [2010] EWCA Civ 110). [115] Cipriani noted at [151] and [152] that the assessment of the defence required an objective consideration of the steps taken by the relevant person in adopting the company name. Such an approach is consistent with the approach taken by Allsop J (as he was then) in Anheuser-Busch Inc v Budejovicky Budvar (2002) 56 IPR 182; [2002] FCA 390 at [193]-[219] (Anheuser-Busch Inc). The mere ignorance of the trade mark is not sufficient to enliven the defence. Moreover, a lack of fraud or a lack of conscious dishonesty does not establish the flip-side requirement of good faith. I accept though that Anheuser-Busch Inc has distinguishing features that are not present in my case. [116] Seventh, in my view, good faith in s 122 is properly interpreted as requiring reasonable diligence to ascertain that a chosen name does not conflict with a registered trade mark. … [118] If only subjective knowledge was relevant, a person could use the good faith defence despite not having taken any appropriate steps to inform himself of any relevant existing trade marks. This has the potential to undermine the utility of a registered trade mark. The reasonableness or lack thereof of the steps undertaken by the First Respondent in the choice of its company name is to be considered in light of the effect on the trade mark owner. If good faith were to be construed as merely being satisfied on the basis of a stated subjective belief that one did not know of the other, it could lead to a situation where one could justify trade mark use with one's ignorance. The failure to make proper inquiries should not place a respondent in a better position than if such inquiries had been made. 283 The parties relied on the same matters in relation to the defence of honest concurrent use to establish, in the case of the Zip Companies, use in good faith and, in the case of Firstmac, that the adoption of ZIP MONEY was not in good faith. 284 That being so, for the same reasons as I found in relation to the Zip Companies' honesty of use for the purposes of s 44(3) of the TM Act, I am satisfied that use of the name ZIP MONEY in the period between 7 September 2015 and 7 December 2017 was in good faith.

Estoppel, acquiescence, delay or laches 285 The Zip Companies also contend that Firstmac's infringement case should be rejected because Firstmac is estopped from asserting that case. In particular the Zip Companies contend that: (1) they have conducted the ZIP business based on the state of affairs which Firstmac has permitted to prevail in the market since at least 2013 and which they have assumed would continue; (2) Firstmac did not make any demands of the Zip Companies in respect of the Applicant's Mark, or indeed any asserted right, until March 2019; (3) it would be unconscientious for Firstmac to depart from the state of affairs that it has allowed to prevail in the market since at least 2013; and (4) Firstmac is estopped from asserting its rights in the Applicant's Mark against them and obtaining any remedies in relation to that mark in this proceeding. 286 Further or in the alternative, the Zip Companies contend that Firstmac should be denied any remedies by reason of acquiescence, delay or laches. 287 The principles of estoppel were summarised by Nettle JA (with whom Ormiston JA agreed) of New Zealand Pelt Export Co Ltd v Trade Indemnity New Zealand Ltd [2004] VSCA 163 at [96] as follows: According to Deane, J. in The Commonwealth v Verwayen, the central principle of estoppel is that the law will not permit an unconscientious departure by one party from the subject matter of an assumption which has been adopted by another party as the basis of some relationship, course of conduct, act or omission. Consequently, an estoppel may arise where the party claiming the benefit of the estoppel has adopted an assumption as the basis of action or inaction and thereby placed himself or herself in a position which would be productive of significant disadvantage if the party claimed to be estopped were permitted to depart from the assumption. The question whether the departure would be unconscionable relates to the conduct of the allegedly estopped party in all the circumstances but the cases indicate four main but not exhaustive categories in which an affirmative answer to that question may be justified, namely, where the party: (a) induced the assumption by express or implied representation; (b) entered into or continued contractual or other material relations with the other party on the conventional basis of the assumption; (c) exercised against the other party rights which would exist only if the assumption were correct; or (d) knew that the other party laboured under the assumption and refrained from correcting him when it was his duty in conscience to do so. In cases falling within category (a), a critical consideration will commonly be that the allegedly estopped party knew or intended or clearly ought to have known that the other party would be induced by his conduct to adopt, and act on the basis of the assumption and, in cases falling within category (b), actual belief in the correctness of the fact or state of affairs assumed may not be necessary. The facts of a particular case may, however, be such that it fall within more than one of the categories. 288 In Orr v Ford (1998) 167 CLR 316 at 337-338 Deane J considered the principles applying to the defence of acquiescence. At 337 his Honour noted that "[s]trictly used, acquiescence indicates the contemporaneous and informed ('knowing') acceptance or standing by which is treated by equity as 'assent' (i.e. consent) to what would otherwise be an infringement of rights" and that the word is also used to refer to "a representation by silence of a type which may found an estoppel by conduct" or to "acceptance of a past wrongful act in circumstances which give rise to an active waiver of rights or release of liability". At 338 Deane J referred to a plaintiff losing their right to relief by what his Honour termed an "inferior species of acquiescence" which did not amount to assent, waiver or election or give rise to an estoppel, observing that in that context acquiescence could be used in at least one of three ways including that: … Thirdly, and more commonly, acquiescence is used, in a context where laches is used to indicate either mere delay or delay with knowledge, to refer to conduct by a person, with knowledge of the acts of another person, which encourages that other person reasonably to believe that his acts are accepted (if past) or not opposed (if contemporaneous): … 289 At 339 Deane J expressed the view that the doctrine of laches: … comprises those rules which define the circumstances in which equity will, without need to resort to the rules governing other more particular defences and in the absence of applicable statutory provisions, refuse relief by reason of standing by or lapse of time before action. So understood, the field of operation of the doctrine of laches overlaps the areas of operation of other more specific defences. It does not, however, include the particular rules governing those other more specific defences. 290 In Autocaps (Aust) Pty Ltd v Pro-Kit Pty Ltd (1999) 46 IPR 339; [1999] FCA 1315 at [58] Finkelstein J said: What must be shown to make out a defence of laches or acquiescence? For delay to operate so as to deny a plaintiff a remedy, speaking generally, it must be shown that it would be unjust to give the remedy, because by his neglect the plaintiff has put the defendant in a situation where it would not be reasonable to grant the remedy: Lindsay Petroleum Co v Hurd, Farewell & Kemp (1874) LR 5 PC 221 at 239-40. A shorthand way of stating this proposition is that the remedy will be withheld if it would be unconscionable for the plaintiff to insist upon it: see eg Electrolux Ltd v Electrix Ltd (1953) 71 RPC 23 at 35. However, delay of itself will not be a good defence where, as here, there is a statute of limitations: s 134. That is, the defence of laches cannot be relied upon when there is a statutory time bar: Re Pauling's Settlement Trusts [1962] 1 WLR 86 at 115; affirmed [1964] Ch 303 at 353. H Laddie, P Prescott and M Vitoria in their text The Modern Law of Copyright and Designs, 2nd ed, Butterworths, London, 1995, vol 1, para 24.23, argue that in applying this rule, if the court does not consider delay in a case where infringement has occurred for a period longer than the limitation period, a remedy may be granted although it might be unconscionable due to delay. Perhaps the answer lies in the proposition that where a defence such as estoppel cannot be made out the defendant who continues his wrongdoing beyond the statutory period will be taken to know that he does not have a defence for the unprotected period based on delay. Another view might be that it is not unconscionable to act on the basis that if there is a statutory time bar, the statute covers the field. 291 Firstmac drew my attention to Electrolux Ltd v Electrix (1953) 71 RPC 23 where at 40 Jenkins LJ said: As to the question of acquiescence, the matter may perhaps be put in this way: When the Defendants started using the word "Electrix", they either knew of the Plaintiffs' mark "Electrux" or they did not. If the Defendants did know of it - I make that assumption merely for the sake of argument - then they adopted and used "Electrix" at their peril and were not entitled to assume that the Plaintiffs accorded them their consent to the infringement involved merely because the Plaintiffs, knowing of the Defendants' use of "Electrix", did nothing to enforce their rights. In this alternative, it would have been for the Defendants to apply for and obtain the Plaintiffs' consent to their use of "Electrix", or, failing that, to adopt some other name instead of it. If, on the other hand, the Defendants did not know of the Plaintiffs' mark "Electrux", that could only be because they omitted to take the precaution of searching the Register of Trade Marks. In this alternative, the position was that the Defendants chose to adopt and use the word "Electrix" taking the risk that any registered proprietor of a closely resembling mark in respect of goods of a relevant class might take proceedings against them for infringement. If they desired to avoid this risk, it was for them to search the Register and apply for and obtain consent to their use of "Electrix" from the registered proprietor of any such closely resembling mark, or, failing such consent to adopt some other name instead of "Electrix". Had they searched, they would have found the Plaintiffs' mark "Electrux", and thus brought themselves within the alternative first above stated, with fatal results to their defence based on acquiescence. So far as I can see, they cannot claim to be in any better position because they omitted to search the Register and thus did not know of the Plaintiffs' mark "Electrux". On that footing, they cannot justly say that they adopted and used "Electrix" in the reasonable belief that they were entitled to do so. The most they can justly say is that they adopted and used "Electrix" on the assumption, made without proper enquiry, that there was no one entitled to object to their doing so. In other words, they chose to take the risk that there might be such a person who might, sooner or later, assert his objection. Thus, even in the second of the two alternatives above stated, I fail to see how the Plaintiffs' delay in taking proceedings after becoming aware of the Defendants' use of "Electrix" can be held to have led the Defendants to spend money in building up the good-will associated with "Electrix" in the belief, induced by such delay, that they were entitled to use that name. From first to last, the defendants, in the second alternative, were taking the risk that some registered proprietor of a resembling mark might intervene and, in the words of Bowen, L.J. in Proctor v. Bennis (1887), 4 R.P.C., 333, at p. 358 there was nothing that passed between the parties on the part of the Plaintiffs that lulled them into any more security than they took upon themselves the risk and responsibility of supposing to exist. 292 These defences only arise for consideration in the event that my findings in relation to the availability of the defences under ss 122(1)(f) and (fa) and s 122(1)(a) are found to be wrong. Notwithstanding that, having regard to the applicable principles and the evidence before me, in my view they could not succeed. My reasons for reaching that view follow. 293 The Zip Companies allege that although Firstmac knew about their use of the trade mark ZIP by 2016, and likely earlier, it failed to take any steps prior to 8 March 2019 to prevent the Zip Companies from using the trade mark ZIP or variants of it or to indicate it would do so. 294 The evidence is that Firstmac became aware of Zipmoney Payments in late August or September 2016 following the filing by Zipmoney Payments of its first non-use application (see [58] above). There is no evidence that Firstmac knew that the Zip Companies were acting on the alleged mistaken assumption (set out at [285(1) and (2)] above) and no evidence that Firstmac or Mr Gration knew of the Zip Companies' use of the trade mark ZIP and variants of it prior to August or September 2016. 295 Unsurprisingly Firstmac did not make any demands in relation to the Zip Companies' use of the trade mark ZIP and variants of it upon becoming aware of such use given the extant non-use application. Mr Gration's evidence was that he expected that, if Firstmac was successful in its opposition to the application, the Zip Companies would have a contingency plan and change names. That evidence was not challenged. In any event, as Firstmac submitted, its defence of the first non-use application was a clear signal to the Zip Companies that it intended to preserve and defend its rights and thus would act to dispel any assumption they may have had that they could continue to conduct their business based on the state of affairs that had prevailed since 2013. 296 The first non-use application was resolved on 4 December 2018 favourably to Firstmac. Shortly thereafter, on 8 March 2019 Firstmac by its solicitors, Spruson & Ferguson, wrote to Zipmoney Payments in relation to its use of the trade mark ZIP and variants of it as trade marks and demanded such use to cease, failing which proceedings would be commenced. That letter was sent approximately six weeks after the end of the appeal period from the delegate's decision in relation to the first non-use application. On 20 June 2019 Firstmac commenced this proceeding. 297 Further, there is no evidence from Messrs Diamond or Gray to the effect that they were acting in reliance on Firstmac's inaction prior to 8 March 2019 and on that basis they assumed that they could continue to build their business as they had since 2013. 298 In those circumstances the Zip Companies have not established that: they were acting on the basis of an assumption or understanding about a state of affairs; Firstmac engaged in any conduct that led to the mistaken assumption; or Firstmac knew that the Zip Companies were acting on the mistaken assumption. 299 Further, in the circumstances, I do not accept that there was any delay in Firstmac commencing this proceeding. It was entirely reasonable for it to await the outcome of the first non-use application before proceeding to take any steps. If it had failed in its opposition to that application, it would have likely taken different steps. In any event, it cannot seriously be suggested by the Zip Companies that, had a demand been sent by Firstmac during the currency of the first non-use application, in say late 2016 or during the course of 2017, it would have behaved any differently and relinquished use of the trade mark ZIP or the variants of it, particularly while that application was pending. There was nothing unconscientious about Firstmac's conduct in this regard.

Conclusion on Firstmac's infringement claim 300 It follows from the above that: (1) as they admit, the Zip Companies infringed the Applicant's Mark by their use of ZIP simpliciter; and (2) the Zip Companies infringed the Applicant's Mark by their use of the Stylised ZIP Marks. 301 However, the Zip Companies have successfully established their entitlement to rely on the defence under s 122(1)(f) and/or (fa) of the TM Act which is a complete defence to the claim for infringement. Zip Co has also established its entitlement to rely on a more limited defence based on s 122(1)(a) of the TM Act in relation to its use of ZIPMONEY (or ZIP MONEY) in the period from 7 September 2015 to 7 December 2017 when its corporate name was Zipmoney Limited. 302 Accordingly, Firstmac's claim for infringement fails and its FASOC should be dismissed. 303 In those circumstances it is not necessary nor appropriate for me to consider Firstmac's claim for additional damages pursuant to s 126(2) of the TM Act.

The Zip Companies' non-use application 304 On 22 March 2019 Zipmoney Payments filed a second application pursuant to s 92(1) and s 92(4)(b) of the TM Act for removal of the Applicant's Mark from the Register (second non-use application). On 21 August 2019 that application was referred to this Court. 305 In its point of claim filed in this Court in support of the second non-use application, Zipmoney Payments contends that: (1) Firstmac has been the registered owner of the Applicant's Mark for "financial affairs (loans)" in class 36, i.e. the Services, since 20 September 2004; (2) under s 92(4)(b) of the TM Act the relevant period for the second non-use period; (3) Firstmac did not, at any time during the second non-use period, use the Applicant's Mark in Australia in good faith in relation to the Services within the meaning of s 92(4)(b)(i) of the TM Act; (4) further and in the alternative, Firstmac did not, at any time during the second non-use period, use the Applicant's Mark in good faith in relation to the Services within the meaning of s 92(4)(b)(ii) of the TM Act; and (5) by reason of those matters, the Applicant's Mark is liable to be removed from the Register pursuant to s 101 of the TM Act. 306 In answer to Zipmoney Payments' points of claim Firstmac denies that the Applicant's Mark is liable to be removed from the Register and denies that it has not at any time during the second non-use period, used the Applicant's Mark in Australia and/or in Australia in good faith in relation to the Services within the meaning of subs 92(4)(b)(i) and/or (ii) of the TM Act. It contends that: (1) it used and/or licensed the use of the Applicant's Mark in respect of the Services in Australia during the second non-use period; (2) on 18 August 2016, Zipmoney Payments filed the first non-use application in relation to which the relevant non-use period is 18 July 2013 to 18 July 2016 (first non-use period); (3) the first non-use application was successfully defended by Firstmac and the s 105 Certificate was issued in respect of the Applicant's Mark; (4) there is a period of overlap between the second non-use period and the first non-use period; and (5) the solicitors for Firstmac have written to the solicitors for Zipmoney Payments and invited Zipmoney Payments to withdraw the second non-use application in view of the matters set out at (1) to (4) above but Zipmoney Payments has refused to do so.

Legislative framework and legal principles 307 Section 92 of the TM Act relevantly provides: (1) Subject to subsection (3), a person may apply to the Registrar to have a trade mark that is or may be registered removed from the Register. … (3) An application may not be made to the Registrar under subsection (1) if an action concerning the trade mark is pending in a prescribed court, but the person may apply to the court for an order directing the Registrar to remove the trade mark from the Register. (4) An application under subsection (1) or (3) (non‑use application) may be made on either or both of the following grounds, and on no other grounds: … (b) that the trade mark has remained registered for a continuous period of 3 years ending one month before the day on which the non‑use application is filed, and, at no time during that period, the person who was then the registered owner: (i) used the trade mark in Australia; or (ii) used the trade mark in good faith in Australia; in relation to the goods and/or services to which the application relates. (Notes omitted.) 308 Section 100 of the TM Act provides that in any proceeding relating to an opposed application, as is the case here, it is for the opponent, i.e. Firstmac, to rebut any allegation made under s 92(4)(b) of the TM Act that the trade mark has not, during the three years ending one month before the date on which the opposed application is filed, been used or been used in good faith. Relevantly, the allegation is taken to have been rebutted if the opponent establishes that the trade mark was used in good faith during the applicable three year period. 309 Section 101 of the TM Act relevantly provides: … (2) Subject to subsection (3) and to section 102, if, at the end of the proceedings relating to an opposed application, the court is satisfied that the grounds on which the application was made have been established, the court may order the Registrar to remove the trade mark from the Register in respect of any or all of the goods and/or services to which the application relates. (3) If satisfied that it is reasonable to do so, the Registrar or the court may decide that the trade mark should not be removed from the Register even if the grounds on which the application was made have been established. … 310 One of the questions that arises on the second non-use application is whether Firstmac has used the Applicant's Mark as a trade mark. As observed above, in Self Care the High Court, in addressing the requirements to establish infringement under s 120 of the TM Act, considered the question of use of a sign as a trade mark. Relevantly, at [23]-[25] of Self Care the Court said: 23 Use of a trade mark in relation to goods means use of a trade mark upon, or in physical or other relation to, those goods, and so can include use of the mark on product packaging or marketing such as on a website. There is a distinction, although not always easy to apply, between the use of a sign in relation to goods and the use of a sign as a trade mark. A trade mark is a sign used, or intended to be used, to distinguish goods dealt with by one trader from goods dealt with by other traders; that is, as a badge of origin to indicate a connection between the goods and the user of the mark. 24 Whether a sign has been "use[d] as a trade mark" is assessed objectively without reference to the subjective trading intentions of the user. As the meaning of a sign, such as a word, varies with the context in which the sign is used, the objective purpose and nature of use are assessed by reference to context. That context includes the relevant trade, the way in which the words have been displayed, and how the words would present themselves to persons who read them and form a view about what they connote. A well known example where the use was not "as a trade mark" was in Irving's Yeast-Vite Ltd v Horsenail, where the phrase "Yeast tablets a substitute for 'Yeast-Vite'" was held to be merely descriptive and not a use of "Yeast-Vite" as a trade mark. Therefore, it did not contravene the YEAST-VITE mark. 25 The existence of a descriptive element or purpose does not necessarily preclude the sign being used as a trade mark. Where there are several purposes for the use of the sign, if one purpose is to distinguish the goods provided in the course of trade that will be sufficient to establish use as a trade mark. Where there are several words or signs used in combination, the existence of a clear dominant "brand" is relevant to the assessment of what would be taken to be the effect of the balance of the label, but does not mean another part of the label cannot also act to distinguish the goods. (Footnotes omitted.) See too Woolworths Ltd v BP plc (No 2) (2006) 154 FCR 97 at [77]. 311 Relevant to the question of use, s 7(3) of the TM Act provides that an authorised use of a trade mark by a person is taken to be a use by the owner of the trade mark. Section 8 of the TM Act defines the terms "authorised user" and "authorised use" as follows: (1) A person is an authorised user of a trade mark if the person uses the trade mark in relation to goods or services under the control of the owner of the trade mark. (2) The use of a trade mark by an authorised user of the trade mark is an authorised use of the trade mark to the extent only that the user uses the trade mark under the control of the owner of the trade mark. (3) If the owner of a trade mark exercises quality control over goods or services: (a) dealt with or provided in the course of trade by another person; and (b) in relation to which the trade mark is used; the other person is taken, for the purposes of subsection (1), to use the trade mark in relation to the goods or services under the control of the owner. (4) If: (a) a person deals with or provides, in the course of trade, goods or services in relation to which a trade mark is used; and (b) the owner of the trade mark exercises financial control over the other person's relevant trading activities; the other person is taken, for the purposes of subsection (1), to use the trade mark in relation to the goods or services under the control of the owner. (5) Subsections (3) and (4) do not limit the meaning of the expression under the control of in subsections (1) and (2).

Consideration 312 Firstmac bears the onus of rebutting the allegation made by Zipmoney Payments that the Applicant's Mark has not, at any time during the second non-use period, been used, or been used in good faith, by Firstmac in relation to the Services. 313 In order to do so Firstmac relies: first, on the s 105 Certificate which it contends is conclusive of the second non-use application; and secondly, on its use during the second non-use period evidenced by: (1) its continued management and servicing of the original ZIP home loans made before that product was discontinued in 2014 but which had not been discharged before the second non-use period; and (2) the relaunch of the 2018 ZIP home loan in September 2018 initially through Loans.com.au and from February 2020 through more than 8,000 brokers. 314 I turn first to address the effect of the s 105 Certificate. That certificate was issued following determination of the first non-use application (see [172]-[175] above). Section 105(1) of the TM Act requires, among other things, that if in any proceeding relating to an opposed registration the Registrar has found that a trade mark has been used in good faith during a particular period, the Registrar, if so requested, must give the registered owner of the trade mark a certificate of those findings. Section 105(2) of the TM Act relevantly provides that in any subsequent proceeding in which non-use of the trade mark is alleged, the certificate is, on being produced, evidence of the facts stated in it. 315 The s 105 Certificate states that the Applicant's Mark "has been used with respect to the [Services] during the three year period ending on 18 July 2016". In other words, the s 105 Certificate is evidence of the fact that the Applicant's Mark was used during that period but it does not state whether there was continuous use during the period or, if not, when in fact the use occurred and whether, in particular, there was use in the period of overlap between the first non-use period and the second non-use period i.e. 22 February 2016 to 18 July 2016. 316 In any event, as the Zip Companies submitted, the s 105 Certificate is a piece of evidence to be weighed in the balance and is not determinative of the second non-use application. Firstmac does not suggest that any estoppel arises from the delegate's decision in Firstmac v Zipmoney. 317 I turn next to consider the evidence, other than the s 105 Certificate, relied on by Firstmac to rebut the allegation of non-use. 318 The first category of evidence is that going to Firstmac's continued servicing of the original ZIP home loans. The evidence is set out at [19]-[32] above. Firstmac relies on a confidential exhibit which sets out the dates of settlement and discharge of the original ZIP home loans settled between April 2005 and March 2014 which shows that many of these loans had discharge dates during or after the second non-use period and that some remained current as at the date of Mr Gration's affidavit, being 6 May 2020. It contends that almost 200 original ZIP home loans were still active or discharged within the second non-use period. Mr Gration's evidence was that as at 3 February 2020, 127 original ZIP home loans remained active. 319 In relation to the original ZIP home loans which were active during the second non-use period, Firstmac relies on statements issued by it using the Applicant's Mark to identify the loan product and the statements issued by it under originators' branding using the Applicant's Mark to identify the loan product (see [27] and [30] above). 320 The question to be addressed is whether the inclusion of the Applicant's Mark in statements and other documents of this nature was use as a trade mark. 321 Firstmac submitted that the setting and context for how a consumer would understand use on the statements, correspondence and rate cards during the second non-use period requires an understanding of how the product was marketed and presented to the public before the customer entered into the loan and an understanding of what other traders were offering and using in the market. 322 As to the former Firstmac relies on the product sheets for the original ZIP home loan, an example of which is reproduced at [24] above, and the rate sheets. It submitted that the terms "Fulldoc", "LoDoc", "NoDoc", "LOC" and "Term Loan" (explained at [20] above) are common terms in the trade and are descriptive of the type of loan product being offered. 323 As to the latter Firstmac relied on Mr Gration's evidence that he is not aware of any other trader offering a home loan product in the market under or by reference to ZIP and the fact that no evidence of any loan product being marketed as ZIP has been advanced. 324 In my opinion, the use of the Applicant's Mark on statements issued to borrowers in the second non-use period, including when viewed in the context in which the original ZIP home loans were marketed to, and understood by, members of the public, was not trade mark use. My reasons for reaching this conclusion follow. 325 First and most fundamentally, use of the Applicant's Mark on the home loan statements issued by Firstmac or a mortgage originator for the original ZIP home loans was not use as a trade mark but use as a product descriptor, subordinate to the trade mark "Firstmac", in the case of statements issued by it, or to the mortgage manager's or mortgage originator's brand, in the case of statements issued by it on behalf of them. The examples of those statements at [27] and [30] above demonstrate that to be so: (1) in the statement issued by Firstmac (see [27] above) the Firstmac logo appears prominently at the top of the page while the Applicant's Mark appears only as part of the "Product Description" which for the purposes of the example is "ZIP FULL DOC LOC 100091503"; and (2) the same can be said for the statement issued on behalf of Resicom (see [30] above) where the brand Resicom appears prominently with what I infer is its logo and the "Product Description" is "ZIP 100076908". 326 While, as Firstmac submitted, there is nothing unusual in the use of multiple trade marks for the same product, that is not the case here: see Anheuser-Busch at [191]. Rather, there is in each case in the examples set out above and in evidence before me a clear dominant brand, either Firstmac or that of the mortgage manager or mortgage originator, such that when the whole of the statement is assessed, the word ZIP acts as no more than as a descriptor of the particular type of home loan and not as a badge of origin. 327 Secondly, that conclusion does not change having regard to the context in which the original ZIP home loan was marketed. The product information sheets were once again prominently branded Firstmac with the branding and logo it used at the time. They were provided in hard copy or electronically to mortgage originators or brokers, either on their own or together with product sheets for other products offered by Firstmac through its intermediaries. The word "ZIP" was used to describe the home loan product in respect of which it was said that a borrower's home loan could be paid off faster and in connection with which there was a zero (or zip) interest Visa debit card. As for the product rate sheets in evidence before me, Mr Gration's evidence was that they were not provided to potential borrowers. 328 That is, the use of the word "ZIP" as applied to the original ZIP home loans was in a setting or context where it would not have appeared to a consumer as possessing the character of a brand for the purpose of indicating a connection in the course of trade. That connection was accomplished by the Firstmac branding or, in some cases, by the mortgage manager's or mortgage originator's branding. It was the Firstmac brand (or that of the mortgage manager or mortgage originator) that was used to distinguish the Services from those of other traders. The word "ZIP" did no more than describe or identify a particular product supplied by Firstmac directly or through the relevant mortgage manager or mortgage originator. 329 Thirdly, Firstmac contended that the Zip Companies' criticism that its uses on statements and other documents do not show use of ZIP alone but in combination with other phrases such as "home loan" ignores sound trade mark practice that a trade mark should be used as an adjective and not a noun. Otherwise the sign risks becoming generic like, for example, "Hoover" for vacuuming. Firstmac submitted that cases like Bohemia Crystal Pty Ltd v Host Corporation Pty Ltd (2018) 129 IPR 482; [2018] FCA 235 and Community First Credit Union Ltd v Bendigo and Adelaide Bank Ltd (2019) 146 IPR 185; [2019] FCA 1553 are not apposite. While "zip" may be an ordinary English word, unlike the term "community bank" which was found to be a directly descriptive term used by other traders and understood by consumers in a descriptive sense, it is not in the least directly descriptive of home loan products. 330 In Community First, I considered s 41 of the TM Act as it existed prior to the enactment of the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (Cth) (IPL Act). By that section, both in its prior form and currently, registration of a trade mark must be rejected if it is not capable of distinguishing the applicant's goods or services in respect of which the trade mark is sought to be registered from the goods or services of others. The trade mark in issue was for COMMUNITY BANK. The first question to be determined was whether that trade mark was capable of distinguishing the designated goods or services from the goods or services of others for which purpose it was first necessary to take account of the extent to which the trade mark is inherently adapted to distinguish the goods or services from the goods or services of others: see s 41(3) of the TM Act prior to amendment by the IPL Act. 331 In that context, I considered the ordinary signification of "community bank" and found that as at the relevant priority dates it had an ordinary signification or meaning that was directly descriptive of the relevant services (at [204]) and that other traders, not actuated by improper motives, might, and indeed did, legitimately desire to use those words for their ordinary signification (at [233]). In that regard it could be said, as Firstmac contends, that the decision in Community First is not apposite. 332 However, it was then necessary to consider s 41(6) of the TM Act as it then existed which, in turn, required consideration of the extent to which the respondent, Bendigo and Adelaide Bank Ltd, used the COMMUNITY BANK marks as trade marks at the filing dates for registration of those marks. Based on the evidence before me I concluded that Bendigo and Adelaide Bank had failed to establish use by it of the words "community bank" up to the relevant date as a trade mark. That was because for reasons which were explained I was not satisfied that Bendigo and Adelaide Bank's use of the term "community bank" would have appeared to consumers of the services as possessing the character of a brand: see Community First at [258]-[260]. These findings were upheld in Bendigo and Adelaide Bank Limited v Community First Credit Union Ltd (2021) 157 IPR 251; [2021] FCAFC 31 (Bendigo Bank Appeal) at [155]-[188]. 333 Insofar as Community First considers and touches upon the question of use, albeit in the context of the now repealed s 41(6) of the TM Act, it is apposite and provides some support for my findings that the word "zip" used in relation to the original ZIP home loan was descriptive of the services or product but did not serve to distinguish the Services or as a badge of origin to indicate a connection between the Services and Firstmac. That was achieved by the use by Firstmac of its own name and logo which appeared in each case in connection with the original ZIP home loan promotional material and in statements sent to borrowers. Similarly in Community First I found that the words "community bank" appeared with the Bendigo bank branding such that it was the latter that identified the source of the relevant services: see Community First at [266]. As the Full Court said in Bendigo Bank Appeal at [159], by reference to Shell Company at 425: In the present case, to adopt the words of Kitto J in Shell, the words "community bank" were presented in a setting where those words would not have appeared to the viewer as possessing the character of a brand for the purpose of indicating a connection in the course of trade. That connection was instead accomplished by the Bendigo branding. It was the Bendigo branding (and not the term "community bank") that was used to distinguish the Services from those of other traders and to clearly indicate a connection between the Services and Bendigo. 334 The same can be said here in relation to the material associated with the original ZIP home loan and the Firstmac branding. 335 The second category of evidence relied on by Firstmac concerns the 2018 ZIP home loan which was launched in September 2018 with a $5,000 interest free Visa debit card through Loans.com.au and under its branding. The evidence about the development, features and promotion of the 2018 ZIP home loan is set out at [37]-[52] above. 336 The first question that arises is whether use of the Applicant's Mark as contended by Firstmac in relation to the 2018 ZIP home loan during the second non-use period was by it or under its control. To that end Firstmac relies on use by Loans.com.au. Mr Gration gives evidence of Loans.com.au's use of ZIP on its website, social media pages and in promotional brochures, correspondence, statements and product rate sheets (see [44] above). 337 The Zip Companies submitted that it is not clear how this is conduct which occurred under Firstmac's control in the relevant sense because the September 2014 Origination Agreement upon which Firstmac relies does not purport to regulate the use of the word ZIP at all. 338 Section 8(2) of the TM Act (see [311] above) provides that "authorised use" means use by a person of the trade mark in question to the extent only that the person uses the trade mark under the control of the owner of the trade mark. Therefore for present purposes there will be authorised use by Loans.com.au of the Applicant's Mark if Loans.com.au uses that trade mark under Firstmac's control. 339 Firstmac also relies on subs 8(3) and (4) of the TM Act (see [311] above) and contends that there will be use of the Applicant's Mark under its control where it exercises financial control over the user's trading activities and/or where it exercises quality control over the services provided by the user under or by reference to the Applicant's Mark. 340 The requirement of control of the use of the trademark in s 8 of the TM Act means "actual control in relation to the trade mark from time to time". It will be a question of fact and degree in each case and involves the notion of a sufficient connection. There must be control as a matter of substance: Lodestar Anstalt v Campari America LLC (2016) 244 FCR 557 at [97]-[98]. 341 Relevantly Firstmac relies on the following evidence to establish authorised use by Loans.com.au of the Applicant's Mark in relation to the 2018 ZIP home loan: (1) Loans.com.au is part of the Firstmac Group of companies (see [9] above); (2) Firstmac and Loans.com.au share a principal place of business and have one common director, Mr Cannon, who is also the secretary of both companies; (3) the September 2014 Origination Agreement which Firstmac says governs Loans.com.au's marketing and sale of Firstmac's products; and (4) evidence given by Mr Gration, Ms Pendrey and Ms Sudarmana to the effect that Firstmac actually exercised these rights of control. 342 In order to establish authorised use Firstmac must establish actual control over use of the Applicant's Mark by Loans.com.au in relation to the Services. That is, as I have already observed, a question of fact and degree. 343 That Mr Cannon is the secretary of both Firstmac and Loans.com.au and a director of both companies (with others) is not sufficient to establish the requisite control. There was no evidence from Mr Cannon or any other director as to whether, in that capacity, they exercise any control over Loans.com.au's use of the Applicant's Mark in relation to the 2018 ZIP home loan including as to whether they exercised any quality or financial control over the Services offered by reference to the Applicant's Mark. 344 The next relevant fact relied on is the September 2014 Origination Agreement. That agreement is between Firstmac Origination, a wholly owned subsidiary of Firstmac, and Loans.com.au. It specifies that the counterparty to the agreement, i.e. Loans.com.au, is XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX. 345 Putting those matters to one side, the September 2014 Origination Agreement does not in terms address use of the Applicant's Mark. On the use of names or trade marks it only addresses use of Firstmac's name and logo, which it prohibits without obtaining Firstmac's prior written consent, and in relation to advertising and promotional material, it similarly prohibits such material where it names Firstmac, without obtaining Firstmac's prior written consent. The September 2014 Origination Agreement otherwise sets out the terms on which a mortgage originator, in this case Loans.com.au, can participate in Firstmac's origination and mortgage management program. In my opinion the September 2014 Origination Agreement does not assist Firstmac in demonstrating the relevant degree of control over the use of the Applicant's Mark by Loans.com.au. 346 The final set of facts relied on is the evidence given by Mr Gration, Ms Pendrey and Ms Sudarmana. That evidence comprises: (1) the fact of entry into the September 2014 Origination Agreement, into which all originators enter. I have already addressed that agreement. While it shows that Firstmac controls its mortgage originators, that control does not go to use of trade marks other than Firstmac's own name and logo; (2) the fact that Firstmac creates, structures and funds its products as set out at [18] above. This demonstrates that Firstmac structures and develops its products and keeps a tight rein on mortgage originators and managers to ensure they meet its requirements in terms of suitability of loans for particular borrowers and approvals. I am satisfied that by doing so Firstmac exercises quality control over the products and the Services. That is, Firstmac controls both the products offered and the suitability of borrowers; (3) the fact that Loans.com.au acts exclusively as a mortgage originator of Firstmac's products. This is not evidence of the control of use of the Applicant's Mark in that it does not demonstrate that Firstmac exercises either quality or financial control over the products. It simply describes Loans.com.au's business model; (4) the fact that employees of Firstmac and Loans.com.au work from the same office location and that the managers at each company report to Mr Gration. In that regard Mr Gration says that he is the person to whom relevant managers at Firstmac and Loans.com.au report in relation to products that are promoted and marketed by Firstmac and by Loans.com.au on its behalf. He describes the nature of the reports he receives to include: … the number of home loans 'sold' (i.e. the number of home loan applications filed), the value of those applications, the number of applications that proceed to approval, and the quality of the applications received. I also receive reports as to the performance of the loans, prior to and after settlement, which identifies the number of loan applications which have been correctly or falsely completed, and whether there are (and the details of) any default in the repayment of a home loan by a borrower. That is, reports are provided to Mr Gration by both Firstmac and Loans.com.au in relation to the number, nature and quality of loan applications and whether any loans are in default. To the extent these reports concern the 2018 ZIP home loan, in doing so Firstmac is exercising quality control over the Services; (5) Mr Gration's evidence that Firstmac conducts all collection activities for its mortgage managers and mortgage originators, as it is the only entity approved to do so, and takes on the primary role of communicating and dealing with a defaulting borrower in relation to collections. To the extent this conduct concerns the 2018 ZIP home loan, this is another way in which Firstmac exercises both quality and financial control over the Services in relation to which the Applicant's Mark is used; (6) Mr Gration's evidence that Loans.com.au's marketing team is staffed by Firstmac employees who create promotional material such as brochures for Loans.com.au for publication on its website and social media pages and design and update Loans.com.au's websites and social media pages. Despite these tasks being undertaken at Loans.com.au's expense, to the extent they concern use of the Applicant's Mark in relation to the 2018 ZIP home loan, they are another example of Firstmac exercising quality control over the Services insofar as they are provided by Loans.com.au; (7) that Firstmac generates the statements issued to originators' customers according to its requirements. According to Mr Gration this means that the statements are issued in a consistent format. This is an example of conduct which amounts to control of the use of the Applicant's Mark by Loans.com.au in relation to the Services. That is, Firstmac issues the statements on Loans.com.au's letterhead according to its requirements including as to the use of the word "zip". That said, my findings as to whether the use of the word "zip" on the statements generated by Firstmac amounts to trade mark use (see [324] above) apply equally to the statements generated in relation to the 2018 ZIP home loans; (8) Mr Gration's evidence that he approves the structure of, and the final form of any documents sent in connection with, all of Firstmac's products which, I infer, includes the 2018 ZIP home loan. This is an example of Firstmac exercising quality control over the Services provided by Loans.com.au in relation to which the Applicant's Mark is used; (9) Mr Gration's evidence that he approves the content of changes to Loans.com.au's website where they concern Firstmac's products and services. In particular in September 2018 Mr Gration reviewed proposed changes to the Loans.com.au website identifying the 2018 ZIP home loan before they went live. To the extent the Loans.com.au website displays the Applicant's Mark in connection with the Services, I am satisfied that use is authorised use. That is, the use on the Loans.com.au website is under Firstmac's control given Mr Gration's approval of any changes to it insofar as it concerns Firstmac's products including the 2018 ZIP home loan; and (10) that Loans.com.au's staff are trained by Firstmac in relation to the features of the 2018 ZIP home loan. This training focused on the features of the 2018 ZIP home loan as is evident from the PowerPoint presentation used for the purpose of the training. The provision of training is a method of exercising quality control over the Services in relation to which the Applicant's mark is said to be used, namely the 2018 ZIP home loan. 347 Having regard to the totality of the evidence relied upon by Firstmac, on balance, I am satisfied that, subject to whether the Applicant's Mark is in fact used as a trade mark in relation to the 2018 ZIP home loan, Loans.com.au uses that mark under Firstmac's control and thus that Loans.com.au would be an authorised user for the purposes of s 8 of the TM Act. 348 I turn to consider whether use of ZIP (or the Applicant's Mark) in relation to the 2018 ZIP home loan was use as a trade mark. Firstmac relies on Loans.com.au's use of ZIP on its website and social media pages and in its promotional brochures, correspondence, statements and product rate sheets, examples of which are at [44] above, as evidence of use of ZIP as a trade mark. 349 My findings at [324]-[334] above apply equally to the use of ZIP in connection with the 2018 ZIP home loans. That is, in my opinion, the word ZIP, where it appears, is not use as a trade mark. Rather, it is used to describe the product and is subordinate to, in this case, the trade mark "Loans.com.au". By way of example the Facebook and Twitter posts at [44(2)] above prominently display the loans.com.au logo while the word ZIP appears before the word home loan i.e. "ZIP home loan" which is accompanied by a more fulsome description of the loan product noting that it not only comes with a "super-low-rate" but with a Visa debit card "that gives you $5,000 Credit which is interest free". The word "ZIP" identifies the particular product but does not act to identify the origin of the Services. 350 The 2018 ZIP home loan had, as set out above, as part of the product a Visa debit card. The examples of the promotional material used show that the words "ZIP debit" appear on the credit card as do "VISA" and "Loans.com.au". My findings above about the use of the word "ZIP" in this context apply equally, if not more so, here given the dominance of the Visa and Loans.com.au branding of the Visa debit card. But in any event, a debit card is not encompassed in the Services. It is not a loan as that term is understood such that any use of ZIP on the debit card is not use of the Applicant's Mark. 351 Finally to the extent it is relevant, as the Zip Companies submitted, Mr Gration who conceived of the 2018 ZIP home loan accepted the descriptive quality of the word ZIP in connection with the relaunched home loan product, as is apparent from his email to Ms Sudarmana dated 26 July 2018 where he described it as a product with "Zip zero zilch interest" (see [38] above) and as he acknowledged in cross-examination (see [39] above). 352 Having regard to the matters set out above, Zipmoney Payments has established a ground for removal of the Applicant's Mark under s 92(4)(b) of the TM Act. That is, the Applicant's Mark remained registered throughout the second non-use period and at no time during that period did Firstmac use the Applicant's Mark in Australia in relation to the Services.

Should the Applicant's Mark be removed from the Register? 353 Where a ground for removal has been made out the Court may order removal of a trade mark from the Register in relation to all or any of the goods and/or services to which the application relates: see s 101(2) of the TM Act. However, once non-use has been established, the trade mark should be removed "unless sufficient reason appears for leaving it there": see Hills Industries Ltd v Bitek Pty Ltd (2011) 214 FCR 396 at [309]. 354 The Court has a discretion not to order removal of the mark, even if the grounds on which the application was made have been established, where it is satisfied that it is reasonable to do so: see s 101(3) of the TM Act. Section 101(4) of the TM Act provides that, without limiting the matters to which the regard can be had, in deciding under subs (3) not to remove a trade mark from the Register, the Registrar may take into account whether the trade mark has been used by its registered owner in respect of similar goods or closely related services or similar services or closely related goods to those to which the application relates. 355 In Austin, Nichols & Company Inc v Lodestar Anstalt (2012) 202 FCR 490 at [28] a Full Court of this Court (Jacobson, Yates and Katzmann JJ) said the following about s 101(3) of the TM Act: … The question to be asked is whether it was reasonable not to remove the trade mark from the Register, although the trade mark had not been used during the statutory period. As the High Court said in a different context, "no paraphrase of the expression can be adopted as a sufficient explanation of its operation, let alone definition of its content": Spencer v Commonwealth (2010) 241 CLR 118 at [58]. In the present context Lander J emphasised the danger of adopting statements of principle made about the exercise of a discretion in a section of an Act which is not in the same form as the section under consideration: Kowa Company Ltd v NV Organon (2005) 223 ALR 27 (Kowa) at [97]. On a fair reading of his Honour's reasons, we are satisfied that he was well aware of the statutory test. Despite his opening remark, his Honour later (at [154]) correctly noted that the discretion is to be exercised "when it is reasonable to do so". 356 At [35] the Full Court observed that the discretion to be exercised under s 101(3) is "a broad one" limited only by the subject matter, scope and purpose of Pt 9 of the TM Act, in relation to which at [38] their Honours said: The purpose of Pt 9 is to provide for the removal of unused trade marks from the Register. In that regard it is plainly designed to protect the integrity of the Register, and in this way, the interests of the consumer. At the same time, however, it seeks to accommodate, where reasonable, the interests of the registered trade mark owners. Otherwise, there would be no need for the discretion. There is no doubt that his Honour took Lodestar's interests into account but he was not wrong to do so. They were not irrelevant. 357 If the Court orders removal of a mark from the Register, the order operates from the date it is made: see E & J Gallo Winery v Lion Nathan Australia Pty Ltd (2009) 175 FCR 386 at [62]-[66]. 358 The starting point is that, as the ground for removal under s 92(4)(b) of the TM Act has been established, the Applicant's Mark should be removed from the Register unless there is sufficient reason for leaving it there. 359 Firstmac submitted that I would exercise the discretion to retain registration of the Applicant's Mark. It submitted that it has not abandoned its registration and has continued using it in the course of trade after expiry of the second non-use period and that no occasion arises for any re-writing or narrowing of the description of the Services in its registration. 360 The evidence relied on by Firstmac as to its continued use of the Applicant's Marks is that since February 2020 it has launched the 2018 ZIP home loan to over 8,000 of its accredited mortgage brokers and that, as at the same time, there were 127 of the original ZIP home loans that Firstmac continued to manage and service, including by the despatch of monthly statements. This latter task is estimated to continue until 2044, assuming the remaining loans are not terminated or discharged at an earlier date (see [50] and [51] above). 361 Against that, as is evident from confidential Annexure B to these reasons, the number of 2018 ZIP home loans settled by Loans.com.au since the end of the second non-use period to April 2020 is very modest. Although there was no evidence of the total value of Firstmac's loan book for the same period I infer, given its value as at 30 June 2019, that the total number of 2018 ZIP home loans written in the period would be very modest when considered as a percentage of the total value of loans. There was no evidence before me of the number of loans written since February 2020 when Firstmac started to offer the 2018 ZIP home loan through other accredited mortgage brokers. 362 I am not satisfied that it is reasonable not to remove the Applicant's Mark from the Register. Firstmac did not use the Applicant's Mark as a trade mark in the second non-use period. It relies on its continued use by the continued offering of its 2018 ZIP home loans through an expanded network of mortgage brokers as well as the ongoing servicing of the remaining relatively few original ZIP home loans. In relation to the former, I infer that use continues in the same way as it did throughout the second non-use period, that is, without using the Applicant's Mark as a trade mark. In addition, while the expanded network through which the product is offered comprises more than 8,000 of its existing mortgage brokers, there was no evidence of how many 2018 ZIP home loans had been settled or, if it became necessary to do so, the inconvenience in terms of cost and effort that would be occasioned to Firstmac to use a different name in connection with the 2018 ZIP home loan. 363 I have also taken into account the s 105 Certificate issued at the conclusion of the first non-use application. But given that the arguments raised before me were not ventilated before the delegate of the Registrar and in light of the conclusion I have reached in relation to the ongoing use of the Applicant's Mark in connection with the original ZIP home loan I would not place much, if any, weight on it. In any event it does not persuade me that I should be satisfied in the circumstances that it is reasonable not to remove the Applicant's Mark from the Register. 364 No specific proposal was put in the alternative that the registration for the Applicant's Mark should be amended by the narrowing of the class of services in relation to which it is registered. Indeed, Firstmac contended that I would not do that given that the Services are the same as those provided by the Zip Companies. That is so and there is no basis upon which I am persuaded that it is appropriate to make an order that the Registrar amend the registration of the Applicant's Mark.

Conclusion on the second non-use application 365 It follows from the above that I am satisfied that an order should be made requiring the Registrar to remove the Applicant's Mark from the Register.

Cross-claim 366 In their cross-claim the Zip Companies seek cancellation of the Applicant's Mark under s 88(1)(a) of the TM Act, relying on s 88(2)(c) of the TM Act, and an injunction restraining Firstmac from making threats that their use of the names and trade marks ZIP, ZIP MONEY and ZIP PAY, both simpliciter and stylised, constitutes infringement of the Applicant's Mark. In effect, Firstmac denies that the Zip Companies are entitled to the relief sought in their cross-claim.

Cancellation under s 88(2)(c) of the TM Act 367 Section 88(1) of the TM Act provides that, on the application of an aggrieved person, the Court can order the Register to be rectified by, among other things, cancelling the registration of a trade mark or entering any condition or limitation affecting the registration of a trade mark that ought to be entered. The exercise of the discretionary power in that subsection is subject to s 88(2) and s 89 of the TM Act. 368 Section 88(2) of the TM Act sets out the grounds on which an application under s 88(1) of the TM Act can be made and includes, relevantly for the purposes of the Zip Companies' cross-claim, that because of the circumstances applying at the time when the application for rectification is made, use of the trade mark is likely to deceive or cause confusion: see s 88(2)(c) of the TM Act. 369 Section 89 of the TM Act provides: (1) The court may decide not to grant an application for rectification made: (a) under section 87; or (b) on the ground that the trade mark is liable to deceive or confuse (a ground on which its registration could have been opposed, see paragraph 88(2)(a)); or (c) on the ground referred to in paragraph 88(2)(c); if the registered owner of the trade mark satisfies the court that the ground relied on by the applicant has not arisen through any act or fault of the registered owner. Note: For registered owner see section 6. (2) In making a decision under subsection (1), the court: (a) must also take into account any matter that is prescribed; and (b) may take into account any other matter that the court considers relevant. 370 Regulation 8.2 of the Trade Marks Regulations 1995 (Cth) sets out the matters that must be taken into account, insofar as they are relevant, in making a decision under s 89(2) of the TM Act as follows: (a) the extent to which the public interest will be affected if registration of the trade mark is not cancelled; (b) whether any circumstances that gave rise to the application have ceased to exist; (c) the extent to which the trade mark distinguished the relevant goods and/or services before the circumstances giving rise to the application arose; (d) whether there is any order or other remedy, other than an order for rectification, that would be adequate in the circumstances.

Is use of the Applicant's Mark likely to deceive or cause confusion? 371 Whether the Applicant's Mark is likely to deceive or cause confusion is to be assessed as at the date of the filing of the cross-claim, that is 15 August 2019. 372 The parties were agreed that the principles applicable to confusion in connection with deceptive similarity for the purposes of s 120 of the TM Act (set out at [192]-[193] above) apply to the test for "likely to deceive or cause confusion" for the purpose of s 88(2)(c) of the TM Act. In short the question to be addressed is whether consumers will be caused to wonder if the person's goods or services might come from the same source. A mere possibility of confusion is not enough, there must be a real and tangible danger. 373 I was not taken to any authorities in relation to the principles guiding the application of s 88(2)(c) of the TM Act. In that regard in Swancom Pty Ltd v Jazz Corner Hotel Pty Ltd (No 2) (2021) 157 IPR 498; [2021] FCA 328 at [172]-[173] O'Bryan J said: [172] There has been very little judicial analysis of s 88(2)(c) since its amendment by s 41 of the Trade Marks Amendment Act 2006 (Cth). JCHPL placed reliance on the statement of Jacobson J in Health World Ltd v Shin-Sun Australia Pty Ltd (2008) 75 IPR 478; [2008] FCA 100 (Health World 2008) at [176] that s 88(2)(c) is concerned with reasons for rectification of the Register which were not available as a ground for rejection or opposition to registration (ie at the time of filing). However, in that case Jacobson J was considering the pre-amendment form of s 88(2)(c). By virtue of the amendment, the question posed by the section is simply whether, by reason of the circumstances applying at the time when the application for rectification is filed (and regardless of whether those circumstances existed pre-registration), the use of the trade mark is likely to deceive or cause confusion. [173] There seems to be little doubt that the phrase "likely to deceive or cause confusion" should be construed in a similar manner as the equivalent phrase in s 43. In that context, the word "likely" has been construed as meaning a real and tangible possibility rather than more probable than not: McCorquodale v Masterson (2004) 63 IPR 582; [2004] FCA 1247 at [35] per Kenny J, following Registrar of Trade Marks v Woolworths Ltd (1999) 93 FCR 365; 45 IPR 411; [1999] FCA 1020 (Registrar v Woolworths) at [43] per French J (with whom Tamberlin J agreed). Adapting the test propounded by Kitto J in respect of s 28(a) of the Trade Marks Act 1955 (Cth) in Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592 at 595; [1955] ALR 115; (1954) 1A IPR 465 (Southern Cross Refrigerating), it will be sufficient if the ordinary person would entertain a reasonable doubt whether the two products come from the same source. 374 The development of the Zip Companies' ZIP brand is chronicled above. As at the time of the filing of the cross-claim, 15 August 2019, the circumstances were as follows. 375 The Zip Companies had been using the word ZIP and different versions of the Stylised Zip Marks and of the ZIP Formative Marks for almost six years. By that time they had developed a business and an associated reputation of some significance. As set out above, for the financial year ended 30 June 2019 the ZIP business had 16,249 Merchants across a range of sectors, 1.3 million Customers, reported TTV of $1,127 million and total revenue of $84,231,132. 376 The ZIP business had been promoted by reference to the word or brand ZIP and the variants of it over the period of its development including through in-store and online marketing, its own websites, its Zip App which became available in mid 2018, its social media accounts and its direct marketing campaigns. 377 In terms of use, a normal and fair use of the Applicant's Mark would include the provision of credit and payment services in a retail setting (both in-store and online) of the type provided by the Zip Companies. 378 Firstmac was using the Applicant's Mark in connection with its ongoing servicing of the original ZIP home loans and the 2018 ZIP home loans. That being so, in my opinion, if Firstmac commenced providing those services, as set out in the preceding paragraph, by reference to the Applicant's Mark such use would cause confusion of the relevant kind. That is, there would be a real and tangible possibility that a person would have cause to wonder whether the service offered by Firstmac by reference to the Applicant's Mark came from the same source as that offered by the Zip Companies.

Should the Register be rectified by cancellation of the Applicant's Mark? 379 As set out above, s 89 of the TM Act confers a discretion on the Court not to grant an application for rectification on the ground in s 88(2)(c) of the TM Act if the registered owner of the trade mark, in this case Firstmac, satisfies the Court that the ground relied on by the applicant for rectification has not arisen through any act or fault of its own. 380 Firstmac submitted that is so in the present case and that risk of deception or confusion has not arisen through any act or fault on its part but because of the Zip Companies' actions as assiduous infringers. Firstmac submitted that the Zip Companies should not be permitted to benefit from its own wrongful conduct. 381 I do not accept that the risk of confusion or deception has arisen because of the Zip Companies' actions as "assiduous infringers". To the extent there has been infringing conduct it is limited and is not ultimately made out because of the Zip Companies' successful reliance on the defences in s 122(1)(f) and/or (fa) of the TM Act by reason of their honest concurrent use. Rather the situation has arisen because in the intervening period Firstmac did not use the Applicant's Mark and to the extent it did it was only in relation to one home loan product, and not in relation to the type of services offered by the Zip Companies, which was phased out in 2014 and only reintroduced in 2018. 382 In that period the Zip Companies used the trade mark ZIP and the variants of it extensively and built their business and, as I have found, did so honestly despite becoming aware of the existence of the Applicant's Mark. To that extent, the risk of deception or confusion did not arise through any positive act or fault on the part of Firstmac but rather as a result of its omission. For whatever reason it saw no need to use the Applicant's Mark in any significant way. On one view fault cannot be laid at either of the parties' feet. 383 In making a decision not to grant an application for rectification I must take into account any prescribed matter and can also take into account any other matter that I consider to be relevant. 384 The prescribed matters are set out at [370] above. I address each one below. 385 The first prescribed matter is the extent to which the public interest will be affected if registration of the trade mark is not cancelled. 386 Firstmac accepted that there is a public interest in ensuring that trade marks the use of which are likely to lead to deception or confusion should not be registered but submitted that was not the only public interest. It identified the following further matters as relevant to take into account as matters of public interest: (1) traders being able to protect their valuable property rights against infringement, citing Campomar at [42]; (2) not rewarding infringers by allowing them to take advantage of wrongdoing; and (3) ensuring that trade marks are not registered in favour of a person who is not the owner of the trade mark, noting that ownership for the purposes of the TM Act turns on who was the first user or, if there was no use, the first to apply to register the mark in relation to the relevant services, citing Anchorage Capital at [163]-[164]. 387 All of these matters may be accepted as relevant public interests. Here, while Firstmac is the registered owner of the Applicant's Mark, circumstances have changed such that there is a real risk of deception or confusion given the Zip Companies' use of ZIP and variants of it over a period of years. In those circumstances and, based on the findings above, in the absence of any infringing conduct or wrongdoing, the public interest weighs in favour of cancellation. 388 The second matter is whether any circumstances that gave rise to the application have ceased to exist. Firstmac accepted that, in the event that they were unsuccessful in their claim for infringement, they have not. 389 The third matter is the extent to which the Applicant's Mark distinguished the relevant goods and/or services before the circumstances giving rise to the application arose. Firstmac submitted that the word ZIP, while an ordinary English word, is inherently adapted to distinguish the Services. I have not accepted that to be so (see [334] above). This factor does not assist Firstmac. 390 The final matter is whether there is any order or other remedy, other than an order for rectification that would be adequate in the circumstances. Firstmac submitted that the alternate remedy would be to order an injunction to restrain the Zip Companies' flagrant infringement. But no infringement has been found so that submission must be rejected. 391 Firstmac also submitted that as both it and the Zip Companies trade across Australia, or at least the eastern states, this is not a case where registration could be limited to a particular geographic area or where, as an alternative to cancellation, the Court would, as suggested by the Zip Companies, limit the specification of services. 392 Firstmac submitted that the latter would not be workable. It said that the problem that arises in attempting to limit the specification of the Services so as to permit Firstmac, on the one hand, and the Zip Companies, on the other, to each continue to use the word ZIP is exemplified by the fact that each now offers a Visa card as part of their respective product offering. In the case of Firstmac it is a Visa debit card and in the case of the Zip Companies I understand it to be a Visa credit card. Firstmac cautioned against drawing fine distinctions in specifications, especially where there is a degree of convergence. 393 There is scope to limit the specification of the Services in the Applicant's Mark. However, although the Zip Companies suggested that course as an alternative in their submissions, they did not identify how the delineation would operate. Presumably the Services would need to be limited to home loans and exclude the type of credit and payment services provided by the Zip Companies. Given the lack of clarity and Firstmac's objection to taking this course, even in the face, it seems, of a potential for a more dire consequence, I would not be minded to order rectification by limiting the specification of the Services for the Applicant's Mark. 394 There is one other matter that is relevant to my consideration of the exercise of the discretion not to grant the application for rectification and that is that there is no evidence that there has been any actual confusion by reason of use of the Applicant's Mark, particularly since the introduction of the 2018 ZIP home loan. That factor may be relevant to the exercise of the discretion, although not determinative, and it is not a factor that must be given significant weight: see Anchorage Capital at [166]. However it is a factor that weighs in the mix on the exercise of the discretion in the circumstances of this case. 395 On balance having regard to the matters set out above, I would not exercise my discretion against granting the application for rectification. An order should be made directing the Registrar to rectify the Register by cancelling the registration of the Applicant's Mark.

Section 129 of the TM Act 396 The Zip Companies contend that: by letters dated 8 March 2019 and 10 May 2019 from Firstmac's solicitors, Spruson & Ferguson (Spruson & Ferguson Letters), Firstmac has made threats that use by them of the names and trade marks ZIP, ZIP MONEY and ZIP PAY, both simpliciter and in stylised forms, constitutes infringement of the Applicant's Mark; those threats were unjustified; and Firstmac threatens, and will continue to make the threats, unless it is restrained from doing so. The Zip Companies contend that they have suffered loss and damage by reason of the threats and will, unless Firstmac is restrained from making them, continue to suffer loss and damage. 397 Firstmac admits that the Spruson & Ferguson Letters constitute threats to bring an action on the ground that the Zip Companies have infringed the Applicant's Mark but denies that the threats were unjustified. Firstmac contends that the Zip Companies have failed to provide any particulars of the loss and damage they allege that they have suffered and will continue to suffer and that in the absence of any particulars, which it has requested, the allegation is liable to be struck out under r 16.21(1)(c) or (d) of the Federal Court Rules 2011 (Cth) and otherwise denies the allegation of loss and damage. 398 Section 129(1) of the TM Act provides that if a person threatens to bring an action against another person, referred to as the "threatened person", on the ground that the threatened person has infringed a registered trade mark or a trade mark alleged by the person to be registered, any person aggrieved by the threat can bring an action against the person making the threat. The purpose of such an action is to obtain a declaration that the threat is unjustified and an injunction restraining the defendant from continuing to make the threat. A plaintiff may also recover any damages that it has sustained because of the defendant's conduct: see s 129(2) of the TM Act. 399 Section 129(4) of the TM Act relevantly provides: The court may not find in favour of the plaintiff if the defendant satisfies the court that: (a) the trade mark is registered; and (b) the acts of the threatened person in respect of which the defendant threatened to bring an action constitute an infringement of the trade mark. 400 In Stone & Wood Group Pty Ltd v Intellectual Property Development Corp Pty Ltd (2016) 120 IPR 478; [2016] FCA 820 at [233] Moshinsky J said the following about the principles applicable to a claim of unjustified threats pursuant to s 129 of the TM Act and, in particular the defence in s 129(4): It appears from the text and structure of s 129 that, where the terms of s 129(1) apply, subject to subs (5) and (6), a defendant to an action under s 129 can only succeed if the defendant satisfies the court of the matters referred to in s 129(4), namely that the trade mark is registered and that the acts of the threatened person in respect of which the defendant threatened to bring an action constitute an infringement of the trade mark. Thus it is insufficient for the defendant to show, for example, a bona fide belief that the acts of the threatened person constituted infringement; the defendant must establish infringement: cf Coogi Australia Pty Ltd v Hysport International Pty Ltd (1998) 86 FCR 154 at 193; 157 ALR 247 at 284; 41 IPR 593 at 630 per Drummond J, in relation to s 202 of the Copyright Act 1968 (Cth); and Bradken Resources Pty Ltd (ACN 098 300 988) v Lynx Engineering Consultants Pty Ltd (ACN 059 949 469) (2008) 78 IPR 586; [2008] FCA 1257 at [39] per Emmett J, in relation to ss 128 and 129 of the Patents Act 1990 (Cth).

The parties' submissions 401 The Zip Companies made no substantive submissions in relation to their claim under s 129 of the TM Act. It contended only that Firstmac's infringement claim should be rejected and that, accordingly, the Court should find that Firstmac made unjustified threats of infringement. 402 In response to the Zip Companies' claim under s 129 of the TM Act, Firstmac submitted that s 129(4) is a complete defence if the respondents are found to infringe and thus if the Court finds, as Firstmac submitted it should, that the Zip Companies have infringed the Applicant's Mark then the Zip Companies cannot succeed. 403 Firstmac submitted that there is authority to support the proposition that the defence under s 129(4) of the TM Act is made out where infringing conduct is proved but the defendant escapes liability because of a successful cross-claim for invalidity and that a threat will not be unjustified where a finding of non-infringement results from successful reliance on a positive defence. Firstmac submitted that accordingly if the Court finds that the cross-claim is successful or that the Zip Companies avoid infringement by reason of their reliance on the s 122 defences, the claim for unjustified threats should still fail. 404 Firstmac submitted that if, despite its submissions recorded above, the Court found that the threats were unjustified it is very difficult to see what, if any, damages were suffered as the letters of demand were sent only to the Zip Companies and there is no evidence that either of them changed their conduct or incurred any commercial detriment as a result, nor do the circumstances suggest a basis for additional damages.

Consideration 405 Despite the finding that some conduct by the Zip Companies amounted to infringement by use of the word "zip" in both plain and stylised form, Firstmac has not made out its claim for infringement. This is because the Zip Companies have made out their defence based on subs 122(1)(f) and/or (fa) of the TM Act. The question that arises is whether, in light of that, the threats made in the Spruson & Ferguson Letters were justified. 406 Firstmac relies on the decision in GM Global Technology Operations LLC v S.S.S. Auto Parts Pty Ltd (2019) 371 ALR 1; [2019] FCA 97 which concerned a claim under, among others, the Designs Act 2003 (Cth). Relevantly, the respondents (S.S.S.) brought a cross-claim seeking relief for unjustified threats under s 77 of the Designs Act. Section 78(b) of the Designs Act provides that a court may grant relief in respect of a threat unless the respondent satisfies the court that the acts about which the threats were made infringe, or would infringe, the registered design. Based on matters that were not in dispute between the parties, at [557] Burley J noted that the conduct of the relevant parties, who were spare parts suppliers, amounted to an infringement of s 71 of the Designs Act subject only to the application of the defence in s 72 of that Act. 407 S.S.S. submitted that a registered owner of a design could not issue a letter of demand threatening infringement without in effect first being able to establish that that the defence in s 72 could not be made out. The actual submission made followed from an argument that the legislative intent and effect of s 72 of the Designs Act was to exclude spare parts from protection under design laws unless the design owner could prove that the parts were being used for non-repair purposes: see GM Global at [558]-[559]. His Honour considered that argument and at [560]-[561] said: [560] The problem with this argument is that it ignores the language of s 72(1), which provides that, before the operation of s 72 will be triggered, the defendant must assert in infringement proceedings that because of the operation of this subsection, the use will not infringe; s 72(2)(b) of the Designs Act. Leaving to one side the reference in that subsection to "infringement proceedings", the evident legislative intention is that a registered owner is not expected to assume that the repair purpose will be asserted. To the contrary, until it is asserted, a registered owner is entitled to proceed on the basis that no such defence will be advanced. [561] This informs the correct approach to whether or not a letter of demand is an unjustified threat within the meaning of s 77 of the Designs Act. A registered owner is free to allege infringement in a letter of demand on the basis that it considers that the requirements for infringement within s 71 are made out (I leave to one side the question of certification for the present). 408 At [564] Burley J rejected the submission that in every case where the impugned product the subject of a threat is potentially a component part of a complex product the party making the threat must assume that the defence in s 72 of the Designs Act applied. At [565] his Honour concluded that Parliament did not intend to stifle the ability of a party to issue a letter of demand for design infringement by requiring a registered owner to anticipate that the defence would be raised and then proceed to establish that there was no repair purpose. His Honour observed that in most cases before the assertion of the repair purpose could arise there must be some sort of threat of suit. 409 By analogy, Firstmac contends that the same principle applies in relation to s 129 of the TM Act. In GM Global, there was reliance on the defence in s 72(2)(b) of the Designs Act which includes language not found in s 122(1)(f) or (fa) of the TM Act, namely that "the first person asserts in infringement proceedings that …. the use or authorisation did not infringe the registered design". The language informed but was not the only basis upon which his Honour reached his conclusion. His Honour also said that a registered owner is free to allege infringement in a letter of demand on the basis that it considers that the requirements for infringement are made out. 410 Despite the language of s 78(b) of the Designs Act including a slightly less onerous test, given the addition of the words "would infringe", the same must be the case for the purposes of the TM Act. That is, the owner of a registered trade mark, in this case Firstmac, who alleges the infringing conduct, cannot know what defence or defences will be relied on by the other person until the threat is made. The owner must be free to allege infringement by way of a letter of demand on that basis and on the basis that it considers that the requirements for infringement are, and, I would add, presumably will be, made out. That is what happened here. Firstmac, through its solicitors, made the threats and admits that they did so. It then proceeded to prosecute the allegations of trade mark infringement. It was successful in terms of establishing infringement by the Zip Companies in relation to an aspect of its claim. It could not know at the time of making the threats that Firstmac would rely on the positive defences in s 122 of the TM Act let alone that it would be successful in them. In those circumstances in my view the threats were not unjustified. 411 Even if I am wrong about that I accept Firstmac's submission that it is difficult to see what, if any, damages were suffered by despatch of the Spruson & Ferguson Letters. There is no evidence from the Zip Companies of any damages having been suffered and certainly no evidence that they changed their conduct as a result of the despatch of the Spruson & Ferguson Letters or incurred any commercial detriment. 412 In my view the Zip Companies have not made out their claim under s 129 of the TM Act and it follows that no relief should be granted to them under that section.

Conclusion on cross-claim 413 It follows from the above that the Zip Companies have succeeded in their cross-claim insofar as they seek rectification of the Register on the basis of s 88(2)(c) of the TM Act and that, as set out at [395] above, an order should be made directing the Registrar to rectify the Register by cancelling the registration of the Applicant's Mark.

Conclusion 414 I have found that: (1) Firstmac has failed in its infringement claim and the FASOC should be dismissed; (2) Zipmoney Payments has succeeded in its application for non-use pursuant to s 92 of the TM Act and is entitled to the relief it seeks; and (3) the Zip Companies have succeeded in their cross-claim insofar as they seek rectification of the Register on the basis of s 88(2)(c) of the TM Act and they are entitled to have the Register rectified by cancelling the registration of the Applicant's Mark. 415 The parties should confer and within seven days of the publication of these reasons provide my Associate with proposed orders giving effect to these reasons, including in relation to costs of the proceeding. If the parties cannot agree on the form of orders they should jointly provide a single marked-up copy of the proposed orders showing where the parties agree and disagree on their proposed terms within the same time. 416 The proceeding will be listed before me to hear argument on the form of orders, if necessary, on 6 June 2023 at 9.30 am AEST. 417 I will make orders accordingly. I certify that the preceding four hundred and seventeen (417) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Markovic.

Associate: Dated: 29 May 2023 Annexure A

1. ZIP, including in stylised form as shown below
7. ZIPPAY (or ZIP PAY or ZipPay), including in stylised form as shown below
11. ZIPMONEY (or ZIP MONEY), including in stylised form as shown below
15. ZIP IT
16. JUST ZIP IT
17. ZIP BIZ
18. ZIP BILLS
19. CAN I ZIP IT?
20. ZIP PAYMENTS, including in stylised form as shown below
22. ZIP TRADE, including in stylised form as shown below
24. ZIP BUSINESS, including in stylised form as shown below
26. www.zip.co
27. www.zippay.com.au
28. www.zipmoney.com.au
29. www.zipmoneylimited.com.au

Annexure B The number of 2018 ZIP home loans originated by Loans.com.au Date No. of 2018 ZIP home loans settled by Loans.com.au Approximate total value of 2018 ZIP home loans originated September 2018 to 31 December 2018 XX XXXXXX 1 January 2019 to 22 February 2019 XX XXXXXX 23 February 2019 to 22 April 2020 XX XXXXXX

The total number and value of ZIP home loans relative to Firstmac's total loan book, compiled from information provided in discovery by Firstmac Date Total no. of loans Total no. of ZIP home loans ZIP home loans % 1 January 2018 XXXXX XXX XXX 15 August 2019 XXXXX XXX XXX

Date Value of loans Value of ZIP home loans Value of ZIP home loans % 31 January 2018 XXXXXX XXXXXX XXX 30 June 2019 XXXXXX XXXXXX XXX