Firstmac Limited v Zip Co Limited [2025] FCAFC 30

Firstmac Limited v Zip Co Limited [2025] FCAFC 30 | Case summary | Zoe

[73]

It is convenient to begin with the respondents' defence of the primary judge's reasoning and conclusion on the topic of deceptive similarity.
The respondents effectively conceded that the primary judge erred by comparing the impression the notional buyer would have of the respondents' marks as actually used with the impression the notional buyer would have of Firstmac's mark as actually used, rather than as notionally used on all services covered by the registration. Nevertheless, the respondents contended that the outcome would be no different if the correct approach were taken because her Honour's other reasons supported the same conclusion and this Court would be satisfied that there was no risk of confusion.
None of the arguments for the respondents were compelling, especially as they did not engage with the substance and detail of the ground of appeal and submissions in support of it. Thus, the fate of this ground largely turns on an examination of the primary judge's reasons and an evaluation of Firstmac's arguments.
The respondents also submit that, if this ground is upheld, while it may add to the infringing conduct of the respondents, it is only of significance if grounds 2 and 3, addressing the defences, are also upheld. That is plainly correct as a matter of logic, but the question of whether the primary judge erred on this ground of appeal as a threshold matter remains unavoidable for it is only necessary to consider the defences if ground 1 succeeds.
It is not in doubt that the respondents used the word "ZIP" in the provision of financial services, that is, in the same category in which the Firstmac Mark is protected, albeit that the sector of the financial services market which each side occupied was quite different. The respondents admitted that the name and trade mark "ZIP" taken alone is substantially identical to the Firstmac Mark. They could hardly do otherwise, and the limited contrary arguments advanced before the primary judge justifiably received short shrift from her Honour. This encompassed conclusively the stand-alone use of the word "Zip", in upper or lower case (items 1 to 6 in Annexure A), and the sole use of "Zip" as the substantive domain name (item 26 in Annexure A), which were correctly characterised by her Honour as substantially identical to the Firstmac Mark.
However, when turning to deceptive similarity, her Honour found that items 7 to 25 of Annexure A, being the ZIP Formative Marks, as well as domain names of the respondents containing the word "ZIP" accompanied by other words, in items 27 to 29 of Annexure A, were not deceptively similar to the Firstmac Mark: PJ [198]-[207], [223]-[224]. In reasoning to this conclusion, the primary judge correctly identified the relevant question as "whether the ZIP Formative Marks so closely resemble the [Firstmac] Mark for financial affairs (loans) in class 36 that they are likely to deceive or cause confusion about the source of the services": PJ[212]. Her Honour also articulated the test as one which concerns the notional buyer's imperfect recollection of the registered trade mark, used in relation to the full range of services to which the registration extends, by comparing the impression (imperfectly recollected) of that mark against the impression of the alleged infringer's mark as used: PJ [212]. Her Honour formed the view that there was "no real tangible danger of deception or confusion occurring from use of the ZIP Formative Marks": PJ[213].
The primary judge found that the similarity between the Firstmac Mark and each of the ZIP Formative Marks begins and ends with the use of the word "ZIP". Because the respondents' ZIP Formative Marks include an additional word (or words) attaching to "ZIP", being ordinary English words, her Honour found they operated to distinguish the ZIP Formative Marks from the Firstmac Mark both visually and aurally to the notional buyer: PJ[214]-[215]. These words include "money", "pay" "business", "trade", "card" and others that are used in conjunction with the word "ZIP". Her Honour did not accept that the essential feature in each of the ZIP Formative Marks was the use of the word "ZIP", instead giving each of the two words in the ZIP Formative Marks, "ZIP" and one of those ordinary English words, equal weighting, and finding that neither took prominence: PJ[216].
The primary judge found that, as the ZIP Formative Marks each use additional ordinary English words which serve to distinguish those ZIP Formative Marks visually and aurally from the Firstmac Mark, the word "ZIP" is not an essential feature of each of the ZIP Formative Marks as it has equal weighting to the other word/s in the ZIP Formative Marks, with "ZIP" being absorbed into the made-up merged word (such as ZIPPAY and ZIPMONEY): PJ [214]-[217]. The primary judge held that the stylised ZIP Formative Marks, which have been used since 2018 by the respondents, have distinctive elements and a use of colour which visually distinguished them from the Firstmac Mark.PJ [218-219]) The primary judge also referred to her own judgment in Gain Capital UK Ltd v Citigroup Inc (No 4) [2017] FCA 519; 123 IPR 234 in relation to the mark "CITYINDEX" and Halley J's judgment in Energy Beverages LLC v Cantarella Bros Pty Ltd [2022] FCA 113; 165 IPR 301 in relation to the mark "MOTHERSKY" in support of this conclusion.
The primary judge next considered "whether the notional buyer would be caused to wonder whether the services came from the same source": PJ[220]. The context her Honour identified for this enquiry was in relation to home loan products for the Firstmac Mark, and for ZIP, contrasting online use for home loans and related features by Firstmac with in-person retail short term small loan products by the respondents. Her Honour found that "[i]n those circumstances, there is no real tangible danger of confusion or deception between the [Firstmac] Mark on the one hand and the ZIP Formative Marks on the other": PJ[221]. Her Honour also referred to there being no evidence of actual confusion among customers having occurred in relation to the marks: PJ [222].
Firstmac submits that, despite identifying the reasoning process required, especially by reference to Self Care v Allergan, the primary judge failed to apply it correctly.
Firstmac challenges the finding by the primary judge that the ZIP Formative Marks were not deceptively similar to the Firstmac Mark upon the bases that:

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The practical thrust of Firstmac's argument on appeal was captured in its reply submissions to the evocative effect that the matters of impression involved in deceptive similarity in the area of financial affairs and loans is that a hypothetical person with an imperfect recollection of the Firstmac Mark may be caused to wonder whether, for example, Zip Pay or Zipmoney is a kind of loan, and be led to think that it was something additional from the people who provided the Zip home loans, or another offering being made by them.
The resolution of this ground ends up turning on the evaluative exercise carried out by the primary judge being replicated by this Court on appeal in order to discern the presence or absence of error. This Court is at no disadvantage to her Honour in that respect. The only real issue is whether or not the respondents' marks in items 7 to 25 in Annexure A had sufficient resemblance to the Firstmac Mark to be deceptively similar, to be assessed by reference to the notional full use of the Firstmac Mark and the actual use of the ZIP Formative Marks.
Respectfully, the primary judge may be seen to have erred in a number of independent and important respects, which individually and in combination have produced an erroneous conclusion.
First, it was incorrect to treat the services being provided by Firstmac and the respondents as being relevantly different when regard is had to the requirement adverted to in Self Care v Allergan at [29] to consider the notional use by a Trade Mark owner across the full range of services to which that mark could be applied and compare that to the actual use by the alleged infringer. BNPL services were within the range of services able to be covered by the Firstmac Mark, such that confining consideration to how that mark had in fact been used only for loans brings to bear the wrong comparison in the sense of being incomplete. In these particular circumstances, that full range could readily apply to extended financial services, such as BNPL, of the kind provided by the respondents. It is not stretching the concept of a full range to contemplate a home loan provider such as Firstmac also providing BNPL services. That is the required mindset for the comparative exercise required to be carried out. Thus, the full notional use by Firstmac, including BNPL, needed to be compared with the actual use by the respondents for BNPL.
That "ZIP" was a mark in fact used for home loans does not diminish the significance of its potential use for consumer loans. This is all the more significant when consideration is given to the admission by the respondents that they used certain marks containing the word "ZIP" in relation to credit and payment services, admitting broadly that the respondents' services are services in respect of "financial affairs (loans)", the category in which the Firstmac Mark is registered.
Second, the assessment by the primary judge that the word "ZIP" as used by the respondents was equal in prominence to each of the other words used with it failed to have regard to the distinction between the former as being distinctive and non-descriptive, and each of the latter as being non-distinctive and descriptive. Moreover, her Honour also treated the usage of "ZIP" as being substantially the same as the usage of the other words, whereas that usage clearly differed with the former being emphasised, especially in the logo usage, by use of a range of visual devices for "ZIP" as depicted by a number of the items within the ZIP Formative Mark range from items 7 to 25 in Annexure A, such as colour, a stylised use of the "Z", bolder lettering, or the other word being used as part of the word "ZIP", including in place of the "i",. To express this evocatively, the image conveys that "ZIP" is the kind of, or provider of, the pay, money, payments, trade or business, in the sense of a badge of origin.
Third, the primary judge's reliance on Gain Capital and Energy Beverages was misplaced. Her Honour referred to her reasons in Gain Capital at PJ[107]-[108] to support her conclusion that neither word used in the ZIP Formative Marks could be characterised as the essential feature of the mark as "neither takes prominence". Whatever the position may have been in Gain Capital where the competing marks were CITYINDEX and CITI, in our view, the same reasoning does not apply to the ZIP Formative Marks.
The relevant passage in Energy Beverages did not survive an appeal: Energy Beverages LLC v Cantarella Bros Pty Ltd [2023] FCAFC 44; 407 ALR 473at [161]-[166] (Yates, Stewart and Rofe JJ). The primary judge referred to Energy Beverages at PJ[217]. There, her Honour noted that Halley J had 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", amongst other things because he found that the MOTHERSKY mark comprises a single invented word, where the word "mother" is completely absorbed within MOTHERSKY and the emphasis and impression conveyed is not on the word "mother". Her Honour considered that "the same may be said in relation to ZIP when compared to 'ZIPPAY', 'ZIPMONEY' and 'ZIPTRADE'.
In its judgment in the Energy Beverages appeal, however, the Full Court relevantly observed at [167] that, although "mother" might be a commonly used word, it was not at all descriptive of the relevant goods (non-alcoholic beverages); rather it was inherently distinctive. Their Honours added (at [168]) that it was important that the word "mother" was wholly incorporated within the MOTHERSKY mark because the word "mother" does not lose its identity by the simple addition of the suffix "sky".
Finally, the absence of any evidence of actual confusion, referred to by the primary judge at PJ[222], was of no moment in this case and in any event does not overcome the problems in reasoning already identified. If such evidence is available, it may help the case for the Trade Mark owner, especially when the resemblance is more at the margin, but in a case such as this where the use of the word mark is stark and undeniable, the absence of such evidence does not weaken the outcome of a proper comparative exercise.
It follows that ground 1 must succeed. The use of "ZIP" by the respondents in conjunction with other words as set out in items 7 to 25 of Annexure A was deceptively similar, not confined as the primary judge did to items 1 to 6 and 26.

[81]

Thus, while s 44(3) is dealing with an actual application for registration of a trade mark, it provides a mechanism for giving content to the hypothetical application for registration contemplated by s 122(1)(f) and (fa), ordinarily, and in this case, to be assessed at the first date of the infringing conduct: see Killer Queen, LLC v Taylor [2024] FCAFC 149 (Yates, Burley and Rofe JJ) at [193], adopting the reasoning in Anchorage Capital Partners Pty Ltd v ACPA Pty Ltd [2018] FCAFC 6; 259 FCR 514 (Nicholas, Yates and Beach JJ) at [217]; see also Cantarella Bros Pty Ltd v Lavazza Australia Pty Ltd (No 3) [2023] FCA 1258 (Yates J) at [631]. Here, the undisputed time of first infringement is November 2013, being the date of first use by the respondents.
The cornerstone of the primary judge's reasoning in upholding the honest concurrent use defence was her finding that the respondents' adoption of the ZIP and ZIP MONEY marks, which took place before August 2013 when the respondents applied to register those marks, and therefore before they became aware of the Firstmac Mark, was both honest and concurrent, having followed extensive internet searches which had not revealed the use of the Firstmac Mark. Her Honour attached determinative weight to those internet searches, having regard to the limited challenge in cross-examination to the sufficiency of those searches. Her Honour placed little weight on the absence of any search of the Register or on the adverse examination reports from IP Australia which Zipmoney received in October 2013, the month before they proceeded to use the ZIP and ZIP MONEY marks.
The honesty required to be established by the respondents for the defences to apply was not merely an absence of dishonesty, but the presence, objectively ascertained, of honesty: see, by analogy with good faith, Anheuser-Busch Inc v Budějovický Budvar, Národní Podnik [2002] FCA 390; 56 IPR 182 (Allsop J) at [217]-[218]; see also Flexopack S.A. Plastics Industry v Flexopack Australia Pty Ltd [2016] FCA 235; 118 IPR 239 (Beach J) at [110]-[111], [118]. An absence of sufficient care and diligence can be sufficient to find the evidence relied upon is inadequate to establish either honesty or good faith: Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd [2017] FCAFC 83; 251 FCR 379 (Greenwood, Jagot and Beach JJ) at [103], expressly applying Flexopack reasoning. There, the Full Court relevantly held that the primary judge was "correct to reject the contention of 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 by Insight Radiology' (at [125]), based on the reasoning in Flexopack". The respondents did not submit that the Full Court was plainly wrong in this respect.
With the above in mind, there are a number of errors in the primary judge's reasoning.
First, it was not for Firstmac to show that the respondents' internet searches were inadequate. The onus was on the respondents to establish that using the unregistered trade marks "ZIP" and "ZIP MONEY" on the basis of its internet searches alone was sufficient in all the circumstances to establish honesty for the purpose of honest concurrent use. In our respectful opinion that onus was not discharged.
In August 2013, prior to the relevant use by the respondents of "ZIP" or "ZIP MONEY" in November 2013, Zipmoney Payments (using its then name, Zipmoney Pty Ltd) applied to register "ZIP" and "ZIP MONEY" as Trade Marks. In October 2013, Zipmoney received adverse reports refusing each application. Each adverse report not only included details of the relevant existing registered Trade Marks (ZIP and ZIPFUND respectively), but expressly said that each proposed trade mark was identical to, or closely resembled, the existing registered Trade Mark, with an earlier priority date. Those adverse reports each stated (with only slight variation in wording):

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Having applied for registration and being aware that it had been refused, it can readily be inferred that the respondents were aware of the likelihood that there was a material impediment to the legitimate use of the respondents' marks: see, by analogy, Pereira v Director of Public Prosecutions [1988] HCA 57; 82 ALR 217 at 219-220 (Mason CJ, Deane, Dawson, Toohey and Gaudron JJ); see also Kural v The Queen [1987] HCA 16; 162 CLR 502 at 505 (Mason CJ, Deane and Dawson JJ); Saad v The Queen [1987] HCA 14; 70 ALR 667 at 669 (Mason CJ, Deane and Dawson JJ).
The adverse reports also advised of the options available to overcome the problems with the respondents' application, including identifying the sorts of evidence required, and pointed out the difficulties in successfully doing so (an extension of time to make such an application was sought and granted, but never acted upon). Having received the adverse reports, the respondents were squarely on notice of the registered priority marks, including the Firstmac Mark, and they were also aware that IP Australia considered that their marks so nearly resembled the earlier registered marks such that using their marks was likely to cause confusion. Due to concerns with other business matters, the respondents chose not to engage with the adverse reports or their findings, including by not seeking legal advice which might have assisted in proving honesty (see the reasoning in relation to good faith by Beach J in Flexopack at [112]). In those circumstances, it was not to the point that a more thorough exploration in cross-examination of the process of conducting internet searches was possible; the cases in which internet searches or other steps had been challenged to a greater extent relied upon by the respondents and addressed by the primary judge were not reasonably capable of being determinative on their own.
It follows that the primary judge's reliance on the extent of the cross-examination on the internet searches was misconceived insofar as it contributed to a finding that the defence of honest concurrent use had been established: PJ[246]. The fact of conducting those searches was not sufficiently material to the defence to lend any real support to the honesty of the use that the respondents relied upon. It did not address the fact that before the first use of their marks the respondents were fixed with knowledge of the Firstmac Mark as a barrier to registration. It follows that the respondents were unable to establish honesty in relation to the use of later variations of their marks, all of which incorporated the Firstmac Mark.
This conclusion is not intended to provide any incentive not to apply for a trade mark to be registered. Failing to apply for the Trade Marks, and hence not receiving the adverse reports, which would be a failure to engage with the Register at all, would not have been any better. As mentioned above, the respondents had the onus to prove the defence, and hence to prove honesty. In circumstances such as these, one would expect an honest trader to do more than the respondents did.
Second, it is apparent from the primary judge's focus on honesty at the time of the decision to adopt the marks of "ZIP" and "ZIP MONEY" ahead of their use, which took place by June 2013, and her finding that no subsequent events were sufficient to infect or displace that conclusion of honesty, that her Honour asked the wrong ultimate question, or applied the wrong test, when it came to honest concurrent use. That is not because prior adoption was an irrelevant contextual circumstance. Nor is it because subsequent events may not also have had contextual relevancy, including the internet searches that were carried out in early 2013. Rather it is because the question of whether there is honest concurrent use is to be assessed as at the date that the first infringing conduct, being use, took place: Anchorage Capital at [217], in the context of [209]-[216]. Her Honour referred to the principle and to the relevant paragraphs in Anchorage Capital at PJ[236] but did not apply them.
As the Full Court said in Anchorage Capital at [217], "if the court is not satisfied that the respondent would obtain registration of the relevant trade mark with effect from that date, then the defence fails". If honest concurrent use cannot be established as at the time of first use, a prior or subsequent state of affairs could not ordinarily assist, and did not do so in the present case. By the first instance of infringing conduct, there was an objective lack of entitlement to use the unregistered marks, with the respondents by then having been given express written notice of that state of affairs. This, too, undermines the primary judge's finding of honesty.
The parties made submissions on appeal as to the correct time for assessment of honesty for the purpose of the honest concurrent use defence. Having found that honesty was not established, it is not strictly necessary to determine whether it would be possible to establish, in any circumstances, honest concurrent use where the first infringement is the first use, due to an inability to establish concurrent use. It is likely that an inability to establish any concurrency of use would also have been fatal to any attempts to establish the defence, at least for the respondents' use of the "ZIP" mark simpliciter: see Killer Queen, LLC v Taylor [2024] FCAFC 149 at [215]- [216]. However, there is some complexity arising out of the subsequent uses of variations of the mark by the respondents, for which the concurrency issue was not as clear-cut as the honesty issue. The failure to prove honesty at first use infects the findings in relation to subsequent uses as well.
Third, the primary judge erred in discounting the significance of the respondents' knowledge of the prior registration of the Firstmac Mark. In this respect, her Honour's analysis focused on statements made in Re Alex Pirie & Sons Ltd's Trademark Application (1933) 50 RPC 147 at 159 (as cited by Nicholas J in Dunlop Aircraft Tyres Ltd v Goodyear Tire and Rubber Company [2018] FCA 1014; 262 FCR 76 at [266]) and McCormick & Company Inc v McCormick [2000] FCA 1335; 51 IPR 102 (Kenny J) at [30] and [32]. As the following discussion demonstrates, the facts of each of those cases is materially different from the facts of the present case, calling for caution in the application of the principles upon which the respondents relied.
Alex Pirie was an actual registration case, rather than a hypothetical registration case of the kind created by the use of s 44(3) to address the question of registrability for the purposes of s 122(1)(f) or (fa). Registration was allowed by the Registrar, overturned by a single judge, and restored by the Court of Appeal, with that restoration being upheld by the House of Lords. There had been a substantial period of concurrent use of a similar product name by companies in the USA (being registered) and in the UK (seeking registration). The presence of undoubted honesty was not in issue, giving rise to the seminal statement by Lord Tomlin that "[k]nowledge of registration may be important where the honesty of the user of the mark sought to be registered is impugned, but ... once the honesty of the user has been established the fact of knowledge loses much of its significance ...". Consequently, Alex Pirie is of no assistance in the present case.
In McCormick, the delegate found the respective marks had co-existed in the market for a long time and there was no suggestion of any improper motive in the small-scale individual trader who was the respondent seeking registration. The case was not concerned with the hypothetical situation in s 122(1)(f) or (fa). Registration was allowed in all the circumstances, but confined to the home State of Queensland where the respondent's mark was used, with adverse findings as to conduct being rejected. Again, the facts in that case limit the applicability of the principles stated.
Dunlop was again an actual registration case, in which there had been a long period of prior use under a legal and factual regime which had ceased to apply, and honesty overtly was not in issue, such that there was a parallel to Alex Pirie, which was applied in the same way. By contrast, here the respondents were on notice of the Firstmac Mark before their use of the marks commenced, were on notice that this was a problem because their registration application was rejected, and they had the benefit of the views of IP Australia about how the problem might be addressed, including how they might go about proving honest concurrent use. Further, once Firstmac became aware of the respondents' BNPL service, as the primary judge found, it gave a clear signal that it intended to "preserve and defend its rights", which would act to "dispel any assumption that [the respondents] may have had that they could continue to conduct their business based on the state of affairs that had prevailed since 2013": PJ[295].
Firstmac correctly draws a closer parallel with In Re Parkington & Co Ltd's Application (1946) 63 RPC 171, which also described and thereby distinguished Alex Pirie (see Parkington at 183). Although not on all fours with this case, in Parkington at 183 Romer J said:

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There is a material distinction between it being difficult to displace a taint attaching to the commencement of concurrent use, and initial honest conduct prior to use not necessarily being beyond impeachment by the circumstances prevailing at the relevant time of first infringing use, especially when new information comes to hand in the intervening period. Again, in the present case, application of the correct approach tells convincingly against the availability of a conclusion of honesty in the relevant sense.
Fourth, Firstmac's case was not one of positively establishing dishonesty, but rather resisting the respondents' attempts to discharge their onus of positively proving all the features of honest concurrent use as at the relevant time of first infringement of the Firstmac Mark. That is, contrary to PJ[259]-[260], the stance that Firstmac took was to challenge the establishment of honest concurrent use, rather than seeking to establish active dishonesty. Additionally, in relation to subsequent applications for registration of later versions of the respondents' marks no separate attempt was made to meet the necessary test, and for those marks the circumstances did not improve as to honesty.
Firstmac's approach accords with the history of the development of the defence of honest concurrent use, as described by Dawson and Toohey JJ in New South Wales Dairy Corporation v Murray Goulburn Co-Operative Co Ltd [1990] HCA 60; 171 CLR 363 at 405-407; see also Campomar Sociedad, Limitada v Nike International Ltd [2000] HCA 12; 202 CLR 45 at [51]- [52]. That reasoning includes the notion that something more than mere deception or confusion was needed to disentitle a Trade Mark to protection. The proposition advanced by Firstmac is that what is required for honest concurrent use is not just use that is honest, but "the legitimate acquisition of goodwill through trade over a period of time", consistently with what the tort of passing off is intended to protect and therefore "of sufficient length, volume and scope, geographically or otherwise, such as to found valuable goodwill", "honestly acquired". The evident point of this argument is to point out that the respondents did not fall within the category of subsequent user that historically ought to be able to dilute, let alone displace, the protections afforded to a registered owner and user of a Trade Mark. The necessary evaluative inquiry is objective, but may be informed by subjective considerations.
Having found that there was honest concurrent use, the primary judge proceeded to consider "the other factors that inform the exercise of the discretion under s 44(3)". The factors that her Honour identified were "relative inconvenience" and the absence of evidence of confusion.
As we are not satisfied that there had been honest concurrent use, the first alternative basis for the exercise of the discretion does not arise. The question then is whether, because of other circumstances, it is proper to accept the application for registration, conditionally or unconditionally. Neither party addressed this question on the appeal. We are not satisfied that the two factors identified by the primary judge as a basis for the exercise of discretion were circumstances that would have made it proper for the registrar to accept an application for registration of the respondents' marks.
First, lack of proven actual confusion has no real work to do given that the relevant date was prior to any relevant use by the respondents having taken place, but in any event that only has real work to do when there is a direct comparison to be made. In this case, while the services were in the same area and it might have been thought that the respondents' services could have come from Firstmac, there was little likelihood of direct confusion at that time. As Mason J pointed out in Berlei Hestia Industries Ltd v Bali Co Inc [1973] HCA 43; 129 CLR 353 at 363, even if there is no evidence of actual confusion, there may nonetheless be a likelihood of confusion.
Secondly, relative inconvenience was dealt with by reference to the respondents' position from 2013 to the period leading up to 2019 (see PJ[264]-[266]). This may be relevant for some of the later marks, but it was in any event the product of the respondents deciding to plough on with use of their marks despite being fixed with knowledge of the existing registered Firstmac Mark and the risk of confusion.
The respondents commenced infringing use in circumstances where they were taking a risk of being in breach of the TM Act, with all that would entail.
It follows that grounds 2 and 3 succeed and the defences fail.
Further, as ground 1 (deceptive similarity) succeeded, it also follows ground 6 succeeds. The primary judge should have found that the respondents had infringed the Firstmac Mark.

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Zipmoney Payments filed two non-use applications under s 92(1) and s 92(4)(b), the first on 19 August 2016, and the second on 22 March 2019. Each application sought removal of the Firstmac Mark from the Register upon the ground that it had not been used, or not used in good faith, in Australia during the three-year period ending one month before each application was made. The first application was refused by a delegate of the Registrar and there was no appeal from that decision. The second application was referred to this Court and granted by the primary judge. The relevant use required to be proven by Firstmac before the primary judge in order to successfully oppose the application was use of the Firstmac Mark as a trade mark. The good faith aspect was never in issue before her Honour. Nor was there any issue of abandonment.
While s 100(1)(c) imposed a burden on Firstmac as the opponent to the application to rebut any allegation of non-use or non-use in good faith, it is well-established that the threshold to defeat a non-use application is low, because establishing a single bona fide use of a trade mark in the alleged non-use period is sufficient: McD Asia Pacific LLC v Hungry Jacks Pty Ltd [2023] FCA 1412; 175 IPR 397 (Burley J) at [155] and the cases there cited. The primary judge found that Firstmac had not discharged that burden, but this largely turned on the objective evaluation of the documentary material in evidence. To the extent that testimonial evidence was also relied upon, no question of credit was at stake. It follows that, before considering whether the primary judge erred in making this finding, it is useful to make some observations about the nature of this part of the appeal and the Court's function in determining the question.
In GLJ v Trustees of the Roman Catholic Church for the Diocese of Lismore [2023] HCA 32; 414 ALR 635, the High Court unanimously affirmed the distinction between questions to which an appeal court must apply the correctness standard, and those discretionary decisions to which the principles in House v The King (1936) 55 CLR 499 must apply: see in particular [16]-[17] (Kiefel CJ, Gageler and Jagot JJ), Steward J agreeing at [95], Gleeson J agreeing at [161]. Questions in the former category admit of only one legally correct answer, often distinguished by the fact that only binary choices are available. Of course, a primary judge's answers to these questions are built on findings of fact and interpretations of evidence, which themselves are subject to processes of evaluation and inference on which reasonable minds may differ. Due deference must be paid to those findings, bearing in mind any advantages a primary judge enjoyed in the particular case. But while answering the question of whether use was made of the Firstmac Mark "as a trade mark" necessarily involves a process of evidence evaluation in which reasonable minds may differ, the question is an objective one with only one legally correct answer: see, GLJ at [17]; see also the discussion of the appellate standard of review in deceptive similarity cases in Caporaso Pty Ltd v Mercato Centrale Australia Pty Ltd [2024] FCAFC 156 at [134] (Katzmann, Wheelahan and Hespe JJ). As Kiefel CJ, Gageler, Nettle, Gordon and Edelman JJ observed in Minister for Immigration and Border Protection v SZFW [2018] HCA 30; 264 CLR 541 at [49]:

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[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 FA Horsenail (t/as The Herbal Dispensary), 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.

[97]

[82] The primary judge referred to the summary of the relevant principles concerning use "as a trade mark" in Nature's Blend Pty Ltd v Nestlé Australia Ltd [2010] FCAFC 117; (2010) 272 ALR 487 (Stone, Gordon and McKerracher JJ) which was a case in which the words "luscious Lips" were used on packaged confectionary which included lip shaped lollies. The Full Court summarised the relevant principles as follows at [19]:

Use as a trade mark is use of the mark as a "badge of origin", a sign used to distinguish goods dealt with in the course of trade by a person from goods so dealt with by someone else: Coca-Cola Co v All-Fect Distributors Ltd (1999) 96 FCR 107; 47 IPR 481; [1999] FCA 1721 at [19] (Coca-Cola); E & J Gallo Winery v Lion Nathan Australia Pty Ltd (2010) 265 ALR 645; 86 IPR 224; [2010] HCA 15 at [43] (Lion Nathan).

A mark may contain descriptive elements but still be a "badge of origin": Johnson & Johnson Aust Pty Ltd v Sterling Pharmaceuticals Pty Ltd [1991] FCA 310; (1991) 30 FCR 326 at 347-8; [1991] FCA 310; 101 ALR 700 at 723; [1991] FCA 310; 21 IPR 1 at 24 (Johnson & Johnson); Pepsico Australia Pty Ltd v Kettle Chip Co Pty Ltd (1996) 135 ALR 192; 33 IPR 161; Aldi Stores Ltd Partnership v Frito-Lay Trading Co GmbH (2001) 190 ALR 185; 54 IPR 344; [2001] FCA 1874 at [60] (Aldi Stores).

The appropriate question to ask is whether the impugned words would appear to consumers as possessing the character of the brand: Shell Co of Australia Ltd v Esso Standard Oil (Aust) Ltd [1963] HCA 66; (1963) 109 CLR 407 at 422; [1963] ALR 634 at 636; [1963] HCA 66; 1B IPR 523 at 532 (Shell Co).

The purpose and nature of the impugned use is the relevant inquiry in answering the question whether the use complained of is use "as a trade mark": Johnson & Johnson at FCR 347; ALR 723; IPR 24 per Gummow J; Shell Co at CLR 422; ALR 636; IPR 532.

Consideration of the totality of the packaging, including the way in which the words are displayed in relation to the goods and the existence of a label of a clear and dominant brand, are relevant in determining the purpose and nature (or "context") of the impugned words: Johnson & Johnson at FCR 347; ALR 723; IPR 24; Anheuser-Busch Inc v Budejovicky Budvar (2002) 56 IPR 182; [2002] FCA 390 (Anheuser-Busch).

In determining the nature and purpose of the impugned words, the court must ask what a person looking at the label would see and take from it: Anheuser-Busch at [186] and the authorities there cited.

[83] The fact that a mark considered as a whole is largely or predominantly descriptive does not preclude a finding that it is also acting as a brand. Similarly, the fact that a product may bear more than one brand does not mean that only one of them is used as a trade mark. As the High Court said in [Self Care v] Allergan at [25]:

[101]

An important point to draw from the approach outlined in the cases cited above is the potential importance of context, and the use and constraints on the use of the concept of a dominant brand, being features present in this case.
As the respondents point out in the application of principle, for the use of "ZIP" to be trade mark use, it would have to represent a brand on its own; it is not sufficient if it has to be read with the Firstmac logo and the other descriptors of the product. The respondents used the example of "Nutri-Grain", which is itself recognisable as a brand, without needing to be accompanied by the head-brand "Kellogg's".
The respondents further argue that for "ZIP" to be used as a trade mark it must be used in the form in which the Trade Mark has been registered. The argument is that where Firstmac has trademarked only "ZIP" and not "ZIP home loan" or any other variant, use of "ZIP" as "Zip home loan" is not sufficient to substantiate trade mark use, as the combination of words is not the mark, and so the use within that phrase means that "ZIP" is not being used as a badge of origin, rather it is only a descriptor.
Further as to principle, s 7(3) provides that "authorised use" of a trade mark by a person is taken to be use of the trade mark by its owner, with s 8(1) defining an "authorised user" as a person using the trade mark in relation to goods or services under the control of the owner; s 8(2) defining use of a trade mark as authorised use only to the extent that this takes place under the control of the owner; and s 8(3) and (4), when read with s 8(5), providing non-exhaustive circumstances of quality control or financial control in which s 8(1) is taken to be satisfied.
The primary judge at PJ[347] found that the requirement of authorised use so as to engage s 7(3) was met in relation to Firstmac's related company, Loans.com.au Pty Ltd. Loans.com.au, was a member of the Firstmac group of companies through which the second iteration of the Zip home loans product, relaunched in September 2018, was initially sold and marketed. That finding was not challenged by way of a notice of contention. It follows that any trade mark use by Loans.com.au was use authorised by Firstmac.

[102]

For the first, unsuccessful, non-use application made on 19 August 2016, the relevant period during which use was required to be established was 18 July 2013 to 18 July 2016 (first non-use period). A certificate of use was issued to Firstmac regarding use during that period by the Registrar under s 105. That certificate is evidence, but not necessarily conclusive evidence, of the facts stated in it: s 105(2)(a).
For the second, successful, non-use application on 22 March 2019, the relevant period during which use was required to be established was 22 February 2016 to 22 February 2019 (second non-use period). That second application was referred to the Federal Court on 21 August 2019. The second non-use application was made after Firstmac sent a letter to the respondents on 8 March 2019 demanding that it cease use of the Firstmac Mark and its variants, or Firstmac would commence legal proceedings: PJ [296].
There was an overlap of the non-use periods for the two applications of almost five months, between 22 February 2016 and 18 July 2016 (overlap period).
In allowing the second non-use application, the primary judge found that at no time during the second non-use period, between 22 February 2016 and 22 February 2019, did Firstmac use the Firstmac Mark in Australia as a trade mark, and that Firstmac had not adequately rebutted the application: PJ[352]. Her Honour determined the non-use application upon the basis of non-use as a trade mark simpliciter, without reference to good faith or abandonment. The sole issue was therefore whether the undoubted use that did take place was use as a trade mark.
While the Court, if satisfied that the grounds of a non-use application have been established, may order the Registrar to remove the trade mark from the Register in respect of the goods or services to which the application relates, the Court may also decide that it should not be removed even if those grounds have been established: s 101(2) and (3). The primary judge ordered removal. Firstmac challenges that exercise of discretion, but the substance of its case turns on challenging the finding on use.

[110]

The primary judge observed at PJ[315] that the reference in the certificate to trade mark use "during the three year period ending on 18 July 2016" did not state whether there was continuous use or when within the period that use occurred, and in particular whether it occurred in the overlapping non-use period for the two applications of 22 February 2016 to 18 July 2016. The effect of her Honour's finding is that the certificate did not on its face state that any of the use found to have taken place occurred during that period, being the only period which was relevant to the second non-use application, rather than the earlier period from 18 July 2013 to 21 February 2016, which preceded the non-use period for that second application. Her Honour further observed that the certificate was evidence to be weighed in the balance and was not determinative: PJ[316]. Later, at PJ[363], her Honour observed that the arguments raised before her were not ventilated before the delegate, and in light of the conclusion reached in relation to ongoing use of the Firstmac Mark in connection with the original home loan product would not place much, if any, weight upon the certificate.
The thrust of Firstmac's argument, based upon that conclusion, appears to be that the primary judge did not place any weight on the certificate, which is certainly within the spectrum of weight attributed to it, and at least implicitly asserts that her Honour erred in not giving it any weight. This argument has little work to do in this appeal. That is because success on either of the other two issues directly addressing use without reliance on the s 105 certificate means that success on this ground does not make any material difference, and failure on both those issues means that a favourable result on this issue alone would not be enough, on its own, to enable the decision of the primary judge to be overturned. Nevertheless, the argument should be addressed for completeness.
The problem for Firstmac is that, at best, the certificate might have provided some, rather vague, evidence of use in the relevant overlap period of 22 February 2016 to 18 July 2016 and, at worst, it was only evidence of use before the second non-use period, so of no probative value at all. In those circumstances, it is plain that her Honour did not err. Indeed, her Honour would still have been right to go further and overtly give the certificate no weight at all because in its terms it was too ambiguous to provide any evidence of use during the only period that was relevant.

[113]

[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.

[116]

Firstmac's case for use of the Firstmac Mark as a trade mark in the overlap period, being the first five months of the second non-use period, turned upon the manner in which documents displayed or otherwise made use of the word "ZIP". This arose in relation to statements issued by Firstmac which used the Firstmac Mark to identify its home loan product, and statements issued by Firstmac using mortgage originator or manager branding which also used the Firstmac Mark to identify the home loan product: PJ[319]. As the primary judge succinctly put it at PJ[320], the question was whether the inclusion of the Firstmac Mark in statements and other documents of this nature was use as a trade mark. Her Honour concluded that it was not, for reasons given at PJ[325]-[334]. Those reasons were also adopted in relation to the third category of evidence considered below (PJ[348]-[352]), and therefore constitute the assessment of both categories of evidence beyond the s 105 certificate. As will be seen, her Honour erred by applying the reasoning from the second category of evidence to the third category of evidence, because of material differences between those two sets of evidence.
In key aspects of those passages at PJ[325]-[334], the primary judge concluded that the use of the Firstmac Mark was as a product descriptor, subordinate to the separate trade mark "Firstmac" in the case of statements it issued, or subordinate to the mortgage manager or originator's brand in the case of the statements Firstmac issued on their behalf in relation to the continuation of the original ZIP home loan product. While her Honour accepted that there could be multiple trade marks for the same product, she found that did not occur. That was because she characterised the word "ZIP" as entirely descriptive of the particular type of home loan, in the manner of a product description, rather thana badge of origin. Her Honour concluded that this remained true even when regard was had to the context in which the original ZIP home loan was marketed, because the word "ZIP" was used to describe the home loan product as enabling the loan to be paid off faster, in connection with which there was a zero (or zip) interest Visa debit card, that debit card itself not being part of the services. This meant that the use of "ZIP" was in a setting or context in which 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 instead being achieved by the Firstmac branding, or the mortgage managers' or originators' brand. It was that dominant brand that was used to distinguish the service provided from those services provided by other traders. Her Honour found that "ZIP" was not being used as an adjective as sound trade mark practice generally required, but as a noun for the home loan, and was only descriptive of the home loan products; and that the source of the services did not come from the use of the word "ZIP".
The particular documents upon which the primary judge based her assessment were samples from before, during and after the second non-use period, including the overlap period, for which only key features need to be reproduced here:

[124]

These documents did not exist in a vacuum. Rather, they were preceded by other documents, such as loan product sheets distributed to mortgage brokers and mortgage managers, which were plainly written for customers to read, and rates sheets distributed to mortgage originators and not provided to customers, which contained information about interest rates and loan to value ratios to indicate how much could be borrowed. Firstmac's case below and on appeal is that such documents have contextual importance for the purpose of objectively evaluating those uses of "ZIP" as trade mark use, especially because certain of those documents were also provided to customers, which then objectively informed their understanding of the ongoing loan servicing documents, such as statements and correspondence, in recognising the use made of "ZIP".
Mr Gration, Firstmac's Sales and Operations General Manager, gave evidence in cross-examination about the product information sheets. He stated that they were, to his knowledge, distributed from when he joined Firstmac in 2011 until the first iteration of the Zip home loan product was discontinued in 2014 (but continued to be serviced through the second non-use period). The contents of those documents are plainly addressed to consumers rather than the intermediary brokers, originators or managers, and it can readily be inferred that they would have been provided to consumers, being delivered in bundles as well as electronically to those intermediaries. The product information sheet is reproduced as Annexure B to these reasons.
Her Honour effectively dismissed the product rate sheets as irrelevant because, she said (at PJ[327]), Mr Gration's evidence in cross-examination was that they were not provided to potential borrowers. Her Honour was mistaken in this respect.
The error about the document upon which Mr Gration was being cross-examined, referred to in bold in the paragraph of the primary judgment reproduced below, assumes some importance. Her Honour proceeded upon the basis that consumers did not have access to the information in the product information sheets (albeit an earlier document before the relevant period), at the time of entry into the loans prior to their discontinuance in 2014. The product information sheets had the important contextual information summarised by her Honour at PJ[327], flowing into the adverse conclusion in PJ[328] as to what would have been apparent to a consumer, which is an important test, following Shell Co of Australia Ltd v Esso Standard Oil (Aust) Ltd [1963] HCA 66; (1963) 109 CLR 407 at 422. Her Honour said:

[126]

As the product information sheet was provided to brokers, with the apparent intention that it would be passed on to consumers, at least in the period from 2011 to 2014, potential borrowers would have been informed about the "Zip home loans" mentioned in the statements and correspondence they subsequently received. While the Firstmac logo is present at the bottom right hand side of each page of the product information sheet, the larger heading on the first page is "ZIP home loans" and the larger heading on the second page is "Zip loan specifications".
The thrust of Firstmac's argument is on its face quite simple. It is that the primary judge erred because the reference to "Zip" in relation to the home loan is to be properly understood objectively, and in context, as a reference to its badge of origin with respect to its financial affairs and loans. In the example relied upon in the appeal, a "full doc" loan (being a reference to the type of loan, namely, a full documentation loan), Firstmac argues that the word "Zip" signified the identity of the product's source, being Firstmac as the owner of the Firstmac Mark. Firstmac says that the situation is even clearer in relation to documents issued by mortgage managers (and originators), such as Resicom, with the "Zip" reference more starkly being used as a badge of origin because it is the only reference to the provider of the product (namely, Firstmac). Rhetorically, Firstmac argues that the putative borrower (that is to say, the customer), by reference to what has been conveyed to them by these documents, in the context of the product information sheet, can objectively be taken to be able to say that they have a Zip home loan from Firstmac. Moreover, Firstmac contends that these documents are to be viewed in the context of the product information sheet, which overtly refers to ZIP home loans, which are described as a passport to a zero-interest visa card, while the reference to Firstmac's name and thereby trade mark is plainly less prominent, being at the bottom of the page and to one side. This argument is also adopted for the quite different third category of evidence, dealt with below.

[131]

[348] I turn to consider whether use of ZIP (or the [Firstmac] 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 used 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 [Firstmac] 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 [Firstmac] Mark under s 92(4)(b) of the TM Act. That is, the [Firstmac] Mark remained registered throughout the second non-use period and at no time during that period did Firstmac use the [Firstmac] Mark in Australia in relation to the Services.

[146]

The primary judge's conclusion concerning the second category of evidence does not disclose appealable error, given the way the ZIP mark was deployed in the documents within that category. Her Honour's conclusion that this is how a consumer would have likely viewed the bland reference in the statements and the like as being only descriptive may be debateable to some degree, but it is not without reasonable support visually. In those circumstances a different view of the use of the word "ZIP" in the second category of evidence as being only descriptive falls within the category for which an appellate court's different view does not rise to the level required to establish error.
The same cannot be said, however, of the third category of evidence. First, in PJ[348]-[352] reproduced above, the primary judge did not refer to any of the Loans.com.au website images. While "loans.com.au" does feature there, it only does so as a homepage or entry point. The size of the letters in the phrase "ZIP Home Loans" in the drop-down page, across from the words "I am interested in ...", are only a little smaller than "loans.com.au", but no less prominent in any other way. The use of "ZIP Home Loan" is not subordinate to "loans.com.au", and is used in a different way from the other listed products ("Essentials", "Offset", "Fixed" and "Investor Smart Package"). The word "Zip" is not being used only as a noun. It is more likely that it would be read by a consumer as referring to a brand, rather than a function or description. It is "ZIP" that is the point of distinction, not the accompanying words "home loan". "ZIP" is being used to describe the source of a home loan.
The primary judge referred to some, but not all, of the second set of images for the third category of evidence, being the social media pages, in PJ[348]-[352]. By reference to Facebook image 3 and Twitter image 2, her Honour concluded that "ZIP" was used only to describe the product and was subordinate to "loans.com.au", in a way that does not identify the origin of the services. In doing so, her consideration of the Facebook and Twitter posts was confined to those including a photograph of a family, where the loans.com.au is comparatively prominent. In the images referring to "ZIP Home Loan Features" (Facebook image 1 and 2, Twitter image 2 and the Instagram image), however, "ZIP Home Loan" dominates the posts, with "loans.com.au" in a smaller font, at the bottom of the image. While her Honour does reproduce the Instagram image, which refers to "ZIP Home Loan Features" at PJ[44(2)], she does not mention it in her analysis at PJ[348]-[352]. The appropriate conclusion for all of the social media posts, especially taking those for Facebook and Twitter as a whole, is that "ZIP" is being used as a brand rather than a description.
The third kind of image, the Loans.com.au website brochure was not reproduced by the primary judge. Loans.com.au is used in the middle on the right hand side as a URL at which to apply for a loan (www.loans.com.au/apply), and as a logo at the bottom of the page, both in a subordinate way.
The images in the third category of evidence reproduced do not fairly meet the description given to them by the primary judge at PJ[324]-[325] as ones in which "ZIP" is used as a subordinate trade mark relative to the Loans.com.au logo. While "Loans.com.au" presents as a website URL and perhaps also as the name of a business, it is, to differing degrees, visually subordinate to the use of Firstmac's word mark "ZIP". The latter is used more prominently in the phrase "ZIP Home Loans". Thus "ZIP" was not subordinate to "Loans.com.au".
Moreover, because Zip Home Loans were being promoted and sold by Loans.com.au, and not by Firstmac, the logo and trade mark of Firstmac is not to be seen at all, let alone in a dominant way. Indeed, as already noted, the references to Loans.com.au are largely, if not entirely, references to its website (which is also its name), or to it as the entity posting the information in the case of the social media posts. In any case, that is subordinate to "ZIP Home Loans", bolstering the conclusion that "ZIP" is being used as a trade mark. It cannot fairly be described as only descriptive, although it may be seen to have that characteristic as well.
As the dominant feature is "ZIP Home Loans", "Loans.com.au" is subordinate, and the Firstmac logo is not seen because Loans.com.au is an authorised user. It follows that the primary judge's conclusion at PJ[349] about the use of "ZIP" in connection with the 2018 Zip Home Loans is erroneous. Her Honour should have found that this use does constitute use of the mark as a trade mark, during the relevant second use period.
The primary judge's conclusion as to removal from the Register and the consequential order relied substantially upon the finding of non-use. That was the trigger for the exercise of the discretion. Once the finding of non-use is overturned, the legal and factual substratum for the order for removal falls away.
Ground 4 as to the finding of non-use succeeds. Firstmac did rebut the assertion of non-use in the second non-use period. The order for removal from the Register must therefore be quashed.

[154]

... Does the likelihood of deception or confusion howsoever arising, involve invalidity or attract a liability to expungement? It seems inconsistent with the policy of the Act that the activity of a competing trader which would otherwise be regarded as infringement can bring about a situation where the proprietor's use of its mark, because of confusion, leads to its invalidity. Windeyer J. in Re Bali Brassiere Co. Inc.'s Trade Mark; Re Berlei Ltd's Application [1968] HCA 72; (1968) 118 CLR 128, was clearly aware of this problem, and in the General Electric case Lord Diplock narrowed the post-registration operation of the United Kingdom equivalent of s 28(a) to situations where the confusion or deception was brought about by some blameworthy act of the registered proprietor ([1972] 1 WLR 729 at 751).

In my view, the test propounded by Lord Diplock in relation to English legislation is equally applicable here, notwithstanding differences in the legislation. If one looks to a wider test, such as whether the respondent has a greater volume of sales and a wider reputation (resulting in the confusion or deception), the problem of public policy is raised acutely. Is a rival trader, by using a registered trade mark, able to render that mark invalid? The Act acknowledges that a rival trader may unwittingly use an existing registered mark, but provides a process whereby he also may become registered. The provision concerning honest concurrent use (s 34) picks up the common law on the subject (see Kerly (1972) (supra) at 187-189).

It seems to me to be contrary to the scheme and policy of the Act to allow what Windeyer J. in the Bali Brassiere case (supra) called "the assiduous efforts of an infringer"(at p. 133) to invalidate (or render void) a registered trade mark unless, at least, there has been "blameworthy" conduct on the part of the registered proprietor. Doubtless a registered proprietor is expected to take due steps for the protection of his mark, but the infringer must also be expected to take such steps as the Act allows in order to establish an equal or superior right to the use of the mark, or to have the register appropriately rectified. While registration by no means creates indefeasibility, it gives notice, and encouragement should not be given to the trader who fails to search it, or disregards the results of a search, and creates a substantial business using the mark, to the point that the registration is to be regarded as invalid, and liable to be expunged. As I have already noted, non-use of the mark by the registered proprietor is dealt with elsewhere by the Act (s 23).

(Emphasis added).

[172]

The substance of the primary judge's finding is that, if Firstmac extended use of the Firstmac Mark to the provision of credit and payment services of the type provided by the respondents, which would be a normal and fair use of the Firstmac Mark, confusion was likely in the sense of there being a real and tangible possibility that a person would have cause to wonder whether the service offered by Firstmac by reference to the Firstmac Mark came from the same source as that offered by the respondents. This is perhaps in some tension with her Honour's finding at PJ[213], when considering the ZIP Formative Marks in the context of deceptive similarity that "there is no real tangible danger of deception or confusion occurring from use of the ZIP Formative Marks".
There were competing arguments on appeal as to whether or not consideration of events actually occurring after the date of the filing of the cross-claim could be taken into account in assessing whether deception or confusion (here only confusion) was likely in the sense of a real possibility. Firstmac contends that this is not permissible, having regard to the language of "is likely" in para (c) of s 88(2). The respondents contend that the application of that provision is an inherently predictive exercise, such that later actual events could have a bearing on the predictive assessment.
The respondents contended that since Firstmac had not raised this legal argument as to the operation of s 88(2)(c) below, leave was required to do so and should not be granted. Firstmac conceded that the particular argument had not been advanced before the primary judge, but asserted that it was properly before this Court on appeal and at least implicitly sought leave to rely upon it. It is (at best for the respondents) doubtful whether leave is required to raise a new point of law on appeal where it would not prejudice another party, for example, because it could not have been met by evidence: see, Thomas Prince, 'Recurring Issues in Civil Appeals - Part 2' (2022) 96 Australian Law Journal 273 at 275-281. There is High Court authority for the proposition that an appellant is entitled to do so in these circumstances: Spriggs v Federal Commissioner of Taxation [2009] HCA 22; 239 CLR 1 at [43]) (French CJ, Gummow, Heydon, Crennan, Kiefel and Bell JJ).
In this case, the construction point would appear to be moot as the primary judge does not seem to have relied upon anything that occurred after 15 August 2019. Her Honour's assessment was overtly based upon the circumstances prevailing at that date, which does not seem to engage the construction point being advanced. If the construction point is wider than that, which seems to be what Firstmac is suggesting in objecting to the primary judge's reference in PJ[378] to " if Firstmac commenced providing those services", then that highlights the need for caution.
The construction point, and the apparent wider objection flowing from that, was not the subject of argument below, and therefore was not able to be addressed by the primary judge. It raises an issue that may be of considerable importance to the operation of the TM Act in other cases. In those circumstances, the statutory construction point and any related wider argument should be left to a case in which it squarely arises, has been taken at trial and has been addressed by the trial judge, or at least been able to be addressed. Importantly, because of the findings that the primary judge should have exercised the Court's discretion not to order rectification, any findings on this point would not be dispositive on this ground of appeal. As such, Firstmac cannot succeed on this ground of appeal upon the basis that the primary judge erred in finding that the Firstmac Mark was likely to cause confusion. The success of this ground of appeal must therefore turn on the arguments advanced on the decision not to exercise the discretion.

[176]

For completeness, it should be noted that the primary judge took into account, but gave little weight to, the absence of any evidence of actual confusion.
As this was a discretionary decision, to succeed on this ground Firstmac has to satisfy the Court that the discretion miscarried because the primary judge acted on a wrong principle, allowed extraneous or irrelevant matters to guide or affect her, mistook the facts, did not take into account a material consideration or that, upon the facts, her conclusion was unreasonable or plainly unjust: House v The King at 504-5 (Dixon, Evatt and McTiernan JJ).
The key factors which the primary judge ultimately weighed in favour of not exercising the discretion turned on conclusions that have already been found to be infected by error, most notably the finding that there was no infringing conduct by the respondents by reason of upholding the defences in s 122(1)(f) and (fa), which affects the findings summarised at [166] (a), (b) and (d) above. That was at least a serious error of fact sufficient to cause the discretion to miscarry.
As to [166(c)] above, being the rejection of Firstmac's argument that "ZIP" was a word inherently adapted to distinguish its services, and the finding that the Firstmac Mark did not distinguish relevant services before the circumstances giving rise to the application arose, that too cannot stand in light of the conclusion reached about the finding of error in relation to the conclusion as to non-use.
It follows that it falls to this Court to determine whether the discretion should not be exercised and the Firstmac mark should remain on the Register.
As a result of our conclusions, a central and indispensable legal and factual foundation for the decision not to exercise the discretion not to rectify the Register has been removed, leaving intact on the other side of the ledger the public interest features that favoured the exercise of the discretion not to order cancellation and therefore rectification. Those features include the interests of traders in protecting their valuable property rights against infringement and not rewarding infringers by allowing them to take advantage of their wrongdoing, both of which the primary judge accepted were relevant public interests.
The respondents are right to point out that, while s 89 was introduced against the background of the authorities upon which Firstmac relied, it is a new provision which must be read according to its terms. In Anchorage Capital at [142], the Full Court observed that s 89 "covers its own particular field and is aimed at dealing with some well-known difficulties that were encountered in the construction of relevant provisions of the 1955 Act", which were not resolved until the High Court's judgment in Campomar (at [68]-[76]), "some five years after the 1995 Act came into force". Those difficulties were first, the significance of the registered owner's conduct and whether it had contributed to the deception or confusion; and second, whether it was for the person seeking rectification to prove that the deception or confusion arose because of blameworthy conduct on the part of the registered owner or for the latter to show that it was not responsible for the deception or confusion: Anchorage Capital at [145]‑[146]). While the Working Party to Review the Trade Mark Legislation recommended to the Minister in July 1992 that the Act be amended to prevent the mark being removed on the ground that the use of the trade mark at the date of commencement of the rectification proceedings was liable to deceive or confuse if the circumstances did not arise through fault on the part of the proprietor (see recommendation 36A(5)), that recommendation did not find its way into the 1995 Act.
Burrell and Handler observe at [9.22] that there are a number of problems with s 89(1) as drafted, one of which is that "fault" is not defined. In these circumstances, the learned authors go on to say:

[178]

That said, where, as here, the primary judge found that Firstmac was without fault, and we have found that the respondents did not prove that their use of the Firstmac Mark was honest, to exercise the discretion to remove the Firstmac Mark would reward "the assiduous efforts of a misappropriating user". To pick up on what Brennan J said in Murray Goulburn at 389, it would place a premium on those efforts.
We are not satisfied that it would be in the public interest to remove the Firstmac Trade Mark in all the circumstances. The first mandatory consideration is therefore resolved in favour of Firstmac.
The second mandatory consideration is whether any circumstances that gave rise to the application have ceased to exist. As we have found that the respondents infringed the Firstmac Trade Mark, this consideration also weighs in Firstmac's favour.
The third mandatory consideration is the extent to which the Firstmac Trade Mark distinguished the relevant goods or services before the circumstances giving rise to the application arose. For the reasons given above, we have found that the "ZIP" Mark did distinguish the relevant services at this time, although we accept that the word is not inherently adapted to distinguish them.
The fourth mandatory consideration is whether there is any order or other remedy, besides an order for rectification, that would be adequate in the circumstances. Firstmac submitted that this was a "neutral" consideration, including for its lack of clarity. The primary judge was not minded to order rectification by limiting the specification of the services as the respondents' suggested (PJ[393]) and neither side supported this course in their submissions on the appeal.
The final matter to which the primary judge referred was the absence of evidence to indicate that the use of the Firstmac Trade Mark had caused any confusion. Her Honour considered that it was a matter in Firstmac's favour but it was not entitled to "significant weight". There was no argument to the contrary from either side on the appeal.
Taking into account all the various considerations, we are of the opinion that an order for rectification of the Register to remove the Firstmac mark is not justified and should not be made.
It follows that this ground of appeal succeeds and the order for cancellation and rectification must be set aside.

Parties

Applicant/Plaintiff:

Firstmac Limited

Respondent/Defendant:

Zip Co Limited [2025] FCAFC 30

Legislation Cited (6)

Marks Act 1995

Marks Regulations 1995

Marks Act 1955

Court Rules 2011

Marks Amendment Act 2006

Trade Marks Act 1955(Cth)

Cases Cited (45)

Accor Australia & New Zealand Hospitality Pty Ltd v Liv Pty Ltd [2017] FCAFC 56; 124 IPR 264

Aldi Foods Pty Ltd v Moroccanoil Israel Ltd [2018] FCAFC 93; 261 FCR 301

Anchorage Capital Partners Pty Ltd v ACPA Pty Ltd [2018] FCAFC 6; 259 FCR 514

Anheuser-Busch Inc v Budějovický Budvar, Národní Podnik [2002] FCA 390; 56 IPR 182

Berlei Hestia Industries Ltd v Bali Co Inc [1973] HCA 43; 129 CLR 353

Campomar Sociedad, Limitada v Nike International Ltd [2000] HCA 12; 202 CLR 45

Cantarella Bros Pty Ltd v Lavazza Australia Pty Ltd (No 3) [2023] FCA 1258

Caporaso Pty Ltd v Mercato Centrale Australia Pty Ltd [2024] FCAFC 156

Dunlop Aircraft Tyres Ltd v Goodyear Tire and Rubber Company [2018] FCA 1014; 262 FCR 76

Energy Beverages LLC v Cantarella Bros Pty Ltd [2022] FCA 113; 165 IPR 301

Energy Beverages LLC v Cantarella Bros Pty Ltd [2023] FCAFC 44; 407 ALR 473

Firstmac Ltd v Zipmoney Payments Pty Ltd [2018] ATMO 195; 147 IPR 59

Flexopack S.A. Plastics Industry v Flexopack Australia Pty Ltd [2016] FCA 235; 118 IPR 239

Gain Capital UK Ltd v Citigroup Inc (No 4) [2017] FCA 519; 123 IPR 234;

GLJ v Trustees of the Roman Catholic Church for the Diocese of Lismore [2023] HCA 32; 414 ALR 635

Halal Certification Authority Pty Limited v Flujo Sanguineo Holdings Pty Ltd [2023] FCAFC 175; 300 FCR 478

Killer Queen, LLC v Taylor [2024] FCAFC 149

Kural v The Queen [1987] HCA 16; 162 CLR 502

McCormick & Company Inc v McCormick [2000] FCA 1335; 51 IPR 102

McD Asia Pacific LLC v Hungry Jacks Pty Ltd [2023] FCA 1412; 175 IPR 397

New South Wales Dairy Corporation v Murray Goulburn Co-Operative Co Ltd [1990] HCA 60; 171 CLR 363

Pereira v Director of Public Prosecutions [1988] HCA 57; 82 ALR 217

Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd [2017] FCAFC 83; 251 FCR 379

Riv-Oland Marble Co (Vic) Pty Ltd v Settef SpA [1988] FCA 553; 19 FCR 569

Saad v The Queen [1987] HCA 14; 70 ALR 667

Self Care IP Holdings Pty Ltd v Allergan Australia Pty Ltd [2023] HCA 8; 277 CLR 186

Shell Co of Australia Ltd v Esso Standard Oil (Aust) Ltd [1963] HCA 66; 109 CLR 407

Steven Moore (A Pseudonym) v The King [2024] HCA 30; 98 ALJR 1119

Swancom Pty Ltd v Jazz Corner Hotel Pty Ltd (No 2) [2021] FCA 328; 157 IPR 498

(2010) 272 ALR 487

(1999) 96 FCR 107

(2010) 265 ALR 645

(1991) 30 FCR 326

(2002) 56 IPR 182

(1968) 118 CLR 128

(1983) 49 ALR 636

(2004) 63 IPR 582

(1999) 93 FCR 365

(1983) 1 IPR 403

(1936) 55 CLR 499

(1996) 135 ALR 192

(2001) 190 ALR 185

(1963) 109 CLR 407

(2008) 75 IPR 478

(1954) 91 CLR 592

At a glance

Court

Decision date

Before

Source

Judgment (197 paragraphs)

Parties

Legislation Cited (6)

Cases Cited (45)