Unpacking the Trade Mark Dispute between Zip Co and Firstmac
The Australian business landscape has been buzzing with the legal tussle between the Buy Now, Pay Later financial service provider, Zip Co, and non-bank lender, Firstmac. At the heart of the dispute is a trademark issue over the name ‘Zip’, which has found its way to the High Court of Australia. This article aims to dissect the origins and implications of this legal skirmish, highlighting the importance of diligent trademarking practices for startups.
The Origins of the Dispute
Zip Co, co-founded by Larry Diamond and Philip Gray, was established in late 2012. Following the selection of the name ‘Zip’, the founders proceeded to register the domain name zipmoney.com.au. However, it wasn’t until early 2013 that Gray initiated internet searches related to the name, none of which identified Firstmac or its products.
A Trademark Oversight
By August 2013, it dawned on Zip’s management to file trademark applications for the logos provided by a designer. This was done without seeking legal advice or conducting a search of the Trade Mark Register, an oversight that would have significant ramifications. In October 2013, Zip received unfavourable reports from IP Australia regarding the trademark applications, as they conflicted with the Firstmac Mark, which Firstmac has controlled since 2004. The founders, engrossed in getting the business off the ground, paid these reports little attention.
The Legal Backlash
In June 2019, Firstmac initiated legal proceedings against Zip for infringement of the Firstmac Mark. This case has been winding its way through the courts for over six years, with no set date for a resolution. The dispute initially saw Zip win at the Federal Court, with the primary judge ruling in their favour due to their “honest concurrent use” defence. However, the Full Court of the Federal Court reversed this decision and ordered the cancellation of the Firstmac mark.
Zip’s Defence and Firstmac’s Counter
Zip’s defence hinges on complex legal semantics around the concept of honesty, arguing that their approach was honest from a trader’s perspective, even if it wasn’t legally sound. Firstmac’s counter-argument is more straightforward; they claim prior use of the Zip mark in relation to financial services, which directly conflicts with Zip’s unregistered name and logo. This argument won the favour of the Full Court.
The Aftermath of the Dispute
As of now, it appears that Zip has not yet registered or applied for an alternative trademark that could replace the Zip logo. Previous attempts by Zip to reach a commercial resolution with Firstmac have been unsuccessful. However, with increasing legal pressure, it’s probable that Zip will reapproach Firstmac on more appealing terms.
Lessons from the Dispute
The Zip Co vs Firstmac dispute serves as a cautionary tale for startups about the importance of a diligent approach to trademarking. Selecting a business name that can be lawfully used and ideally trademarked should be a priority task. Legal advice and a thorough search of the Trade Mark Register can prevent costly and time-consuming legal disputes down the line.
For further details on this ongoing dispute, visit the source Here.
