High Court to clarify ‘honest concurrent use’ in trade mark law

On 4 September 2025, the High Court of Australia granted special leave to Zip Co Limited to appeal the Full Federal Court’s decision in Firstmac Limited v Zip Co Limited [2025] FCAFC 30 (Firstmac). This will present a valuable opportunity for the High Court to provide much needed clarity to brand owners, trade mark applicants, examiners and practitioners alike, on the interpretation of “honesty”, as required in order to establish honest concurrent use under section 44(3)(a) of the Trade Marks Act 1995 (Cth) (TMA).

Why does it matter?

In a nutshell, the concept of honest concurrent use requires a brand owner to choose a trade mark honestly, and use the mark extensively for a significant period (and concurrently with a third party’s conflicting trade mark) to show that the brand owner’s mark and the third-party mark may coexist in the market with no real danger of consumer confusion. Any subsequent High Court ruling on the interpretation of “honesty” will have implications on the availability of honest concurrent use to trade mark applicants and unregistered brand owners in Australia.

The availability of honest concurrent use affects both:

• trade mark applicants: filing evidence of honest concurrent use can be an effective strategy for overcoming both objections raised by trade mark examiners and grounds of opposition based on earlier trade mark registrations or applications owned by a third party. If honest concurrent use is not available, then there would be fewer options for overcoming objections, defending oppositions and obtaining registration of the chosen trade mark, and more trade mark applications could lapse as a result; and
• owners and users of unregistered brands: honest concurrent use, if established, may be raised as a full defence to trade mark infringement. A lack of honest concurrent use could diminish the prospects of successfully defending a third-party infringement claim.

A real-life example

We received an adverse examination report shortly after the Firstmac decision of 19 March 2025, which provided a real-life example of the shifts in the interpretation of “honesty” by Australian trade mark examiners. The report was issued after the applicant filed evidence of honest concurrent use, in an attempt to overcome an objection based on an earlier trade mark registration owned by a third party.

In the report, the Examiner quoted the following passage from IP Australia’s Trade Marks Manual:

Given the accessibility of the Australian Trade Mark Search, and the ease with which a proposed new brand can be searched via Google or other search engines, it will be difficult for an applicant to establish that their adoption and use was honest if they commenced use without any serious attempt to inform themselves whether someone else in Australia may have prior rights that would pose an obstacle to use of the trade mark.¹

The Examiner noted that, although the applicant had, as part of their evidence, explained the reasons for adopting the mark as applied for, and that they were unaware of any third-party use of an earlier mark at the time of adoption, those statements alone were insufficient to show that the applicant had adopted their mark honestly. The Examiner then required an explanation of what due diligence was conducted prior to commencing use of the mark as applied for, including whether any searches were undertaken to check whether a third party owned or was using a similar mark at the time.

Although the above quoted passage has been included in the Trade Marks Manual since October 2023 (according to the list of updates published by IP Australia), this was the first time we have seen an examiner insisting on proof of objective honesty rather than simply accepting an applicant’s evidence as to its subjective knowledge at the time of adoption and first use of the mark as applied for. We see this is a strong indicator of Australian trade mark examiners adapting their examination practice in the wake of Firstmac, which follows a line of authority cementing the objective element in honest concurrent use, starting with the significant decision in Flexopack SA Plastics Industry v Flexopack Australia Pty Ltd [2016] FCA 235 (Flexopack).

What does the law say?

In Flexopack, Beach J considered the defence under section 122(1)(a) of the TMA of good faith use of a person’s own name. At [110] – [118] of the decision, his Honour observed:

• There may be a lack of good faith where the person acts in a deliberate manner to capitalise on a third party’s reputation, or is otherwise fraudulent or dishonest. However, this does not necessarily mean that good faith is shown where there is a lack of fraud or dishonesty.
• The test to be applied has an objective element. There is no good faith where the person has effectively taken a risk, by not taking steps that an honest and reasonable person would have otherwise taken, to inform themselves as to whether they have the right to use a trade mark.
• Good faith requires reasonable diligence to ascertain whether the chosen trade mark does not conflict with a registered trade mark.
• Good faith could be established by showing that legal advice was sought.

The Flexopack reasoning was applied by analogy in the context of honest concurrent use in Insight Radiology Pty Ltd v Insight Clinical Imaging Pty Ltd [2016] FCA 1406 (Insight Radiology). In deciding that there was no honest concurrent use, Davies J at [125] criticised the applicant’s Google search as inadequate, either because the search was not sufficiently comprehensive to identify the third party’s website, or if it did, because the applicant did not proceed to visit the identified website. In any event, Davies J observed that there had been “a lack of diligence and reasonable care in carrying out adequate searches” and accepted expert evidence to the effect that, had the searches been conducted properly, they would have identified the third party’s website and its similar trade marks. This decision was unanimously upheld on appeal in Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd [2017] FCAFC 83.

The above reasoning in Flexopack and Insight Radiology was adopted by the Full Federal Court in Firstmac (see Perram J’s judgment at [12] and Katzmann and Bromwich JJ’s judgment at [63]).

Accordingly, unless the High Court overturns this line of authority, trade mark applicants and unregistered brand owners relying on honest concurrent use must be able to show that their honesty in adopting their trade mark is both:

• subjective: supported by statements of a lack of knowledge of any third party who owned or was using a similar mark in relation to the same or similar goods and services in Australia; and
• objective: supported by evidence of adequately scoped searches (preferably conducted by an experienced trade mark lawyer or registered IP attorney) to identify any conflicts with registered and pending trade marks, as well as unregistered marks in use in Australia, prior to the date of first use of the mark as applied for.

What to know before adopting a new brand

Unless the Flexopack, Insight Radiology and Firstmac line of authority is overturned by the High Court, the current law imposes a heavier legal burden on trade mark applicants and unregistered brand owners to objectively prove their honesty in adopting a new trade mark, by conducting adequate due diligence before using the mark in the Australian market. The burden is also an administrative one, as written records of these investigations should also be maintained, in case evidence of objective honesty is later required to prosecute trade mark applications or defend trade mark infringement proceedings.

As most Australian businesses do not have in-house resources to manage these legal and administrative requirements, it is best to consult an experienced trade mark lawyer or registered IP attorney before adopting and investing in a new brand, to ensure that any searches are carefully scoped and conducted, and proper records of those searches are kept as evidence.

At HopgoodGanim, our expert intellectual property team has provided comprehensive brand protection support to new and established businesses, successfully securing thousands of trade mark registrations in Australia. We work closely with our clients during the brand development process, and regularly conduct trade mark clearance searches to ensure our clients are free to use and register their new brand assets in Australia, before a brand is officially launched in the market. By engaging with our team of experienced trade mark lawyers early in the process, you are placing your business in the strongest position to secure trade mark registration for your key brand assets, and (if required) effectively defend infringement claims made by third parties.

1. IP Australia, Trade Marks Manual of Practice and Procedure, Part 28.3.