Retail

Afterpay rival Zip Co embroiled in trademark case over right to use its own name

Matthew Elmas /

Zip Co has become embroiled in a legal stoush over whether it has the right to use its own name.

Non-bank lender Firstmac has filed Federal Court proceedings claiming Zip infringed its longstanding trademark over the term “ZIP”, which the buy now pay later provider unsurprisingly uses very frequently.

Zip was forced to disclose the court proceedings to investors on Monday, saying in a short statement it intends to fight the legal bid. 

“Zip notes that Firstmac has commenced these proceedings now, when prior to this year Firstmac had not raised any issue in connection with Zip’s use of any of its trademarks,” the company said.

Firstmac lodged a trademark for “ZIP” back in 2004, nine years before Zip Co even existed, as a name for one of its home loan products, which it currently sells through subsidiary loans.com.au.

Zip has argued Firstmac hasn’t used the trademark consistently, filing two separate removal applications for Firstmac’s “ZIP” trademark in recent years.

Zip first registered its opposition to the trademark back in 2016 and was unsuccessful in striking the trademark for non-use in December the following year.

Evidently undeterred, Zip’s lawyers Corrs Chambers Westgarth took another pass in March this year, a case which is still being processed.

Firstmac has defended the trademark cases through lawyers Spurson & Ferguson, the company would not reveal how much it has spent on legal fees defending the cases when asked.

Now on the offensive, Firstmac could cause some significant headaches for Zip, which uses its name in interactions with over 14,000 retailers at more than 30,000 points of acceptance across the country.

“Zip Co and Zipmoney commenced use of, and have continued to use, ZIP and ZIP formative marks in Australia notwithstanding their prior knowledge of Firstmac’s registered trademark rights,” Firstmac said in a statement circulated on Monday evening.

Firstmac said it wasn’t enforcing its trademark while Zip’s removal application was pending, but has now decided to move ahead with court proceedings.

“Firstmac, and its affiliates and licensees have used and have every intention to continue to use (and/or license the use) of the ZIP mark in relation to their respective loan products. Firstmac has provided no representation to the contrary to Zipmoney or Zip Co,” the company said.

Firstmac did not respond to questions about whether it has used the ZIP trademark consistently over the last 15 years.

NOW READ: Afterpay, Zip escape buy-now-pay-later crackdown but stricter regulation is on the way

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Matthew Elmas

Matthew is the news editor at SmartCompany. You can contact him at [email protected].