Zip in an IP fix

Zip Co’s Australian business is facing a period of turbulence, following an unreported decision by the Full Court of the Federal Court to issue injunctions that restrain Zip Co subsidiaries from using the ‘ZIP’ word mark in relation to relevant services or any mark or sign that is substantially similar in Australia.

Non-bank lender Firstmac registered Zip as a trademark way back in 2004 in respect of ‘financial affairs’ and first used it in trade in 2005.

Since 2013, Zip have operated their buy now pay later service using the trade mark “Zip” or “ZIP”, either on its own, or in connection with another word, such as “money”, “pay”, “trade” or “business”, both as plain words and in stylised formats, as well as using a number of domain names including that word.

While Zip prevailed in a hearing before the primary judge, it is no surprise Firstmac won their appeal.

At trial, Zip had relied upon defences of honest concurrent use, and use of own name in good faith, but the Full Court had no time for this.

“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” Justices Anna Katzmann and Robert Bromwich wrote in their joint opinion, in what was a unanimous decision.

“It was incorrect to treat the services being provided by Firstmac and Zip as being relevantly different when regard is had to the requirement … 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” the justices wrote.

Zip’s heavy loss on appeal raises questions around governance, since Zip Co has failed to advise – via the ASX – of this adverse judgement handed down on 19 March, and its inability to continue trading as Zip in Australia.

Which, unlawfully, it continues to do.