👉 Background: Zip Co was founded in 2013 as one of the OG buy now pay later companies in Australia — even slightly before Afterpay. Since then, it has grown to over 6 million customers globally. Its share price hit a high of $12.35 in February 2021 but as interest rates shot up, its business became a whole lot more challenging and fell all the way down to 27 cents. To cope, Zip cut its European businesses and doubled down on profitability in Australia, NZ, and the US.

‍👉 What happened: Now, Zip has just lost a court case on the use of its trading name ‘Zip’, which has been going on since 2019. Firstmac, Australia's largest non-bank lender, claimed Zip had been using a Zip trademark which they registered in 2004. Zip won round one of this lawsuit in 2023, but Zip has just warned that the Federal Court reversed that decision.

‍👉 What else: Next minute, investors panicked, and Zip’s share price dropped over 6%. Thankfully for Zip, this trademark matter only relates to its Australian operations. But if this decision holds, it could force Zip to change its branding in Australia.

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‍What's the key learning?

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‍💡A company’s name isn’t just a label – it’s a key asset for a consumer business. The buy now pay later space is very, very competitive and as a result, brand recognition and trust are key differentiators between Afterpay, Zip, Klarna and Affirm.

💡Changing your name due to a trademark dispute can become a significant distraction especially since Zip has spent years (and millions) building its brand in Australia and globally. A rebrand would force Zip to spend more in marketing, tech updates, and comms too.

💡Zip ain’t the first company to be potentially forced to rebrand as a result of a trademark issue. In 2002, the World Wrestling Federation (WWF) lost a legal battle against the World Wildlife Fund (WWF) and had to spend millions re-branding to WWE with its ‘Get the F out’ campaign. WWF used this opportunity to redefine its identity… and expand its focus on ‘entertainment’.