The Zip Co Ltd (ASX: Z1P) share price has come under pressure on Monday after the payments company revealed that it is embroiled in a trademark dispute.
At the time of writing the Zip Co share price is down 4% to $3.01.
What has happened?
This morning Zip Co advised that Firstmac Limited has commenced proceedings in the Federal Court against Zip Co alleging infringement of its ZIP trademark which is registered in respect of financial affairs (loans).
Zip Co was quick to point out that Firstmac has only commenced these proceedings now and had not raised any issue in connection with its use of any of its trademarks previously.
According to the release, the company has used the Zip trademarks extensively since the business began six years ago in June 2013. Since then it has partnered with over 14,000 retailers at more than 30,000 points of acceptance and has more than 1.2 million customers.
Furthermore, management believes that Firstmac ceased offering a ZIP home loan product before the Zip Co business commenced trading.
What now?
Zip Co revealed that it has engaged law firm Corrs Chambers Westgarth to act for it and will vigorously defend the proceedings. Notwithstanding these proceedings, Zip is confident that it will continue to be able to use its trademarks.
It also expressed its concern over recent activity by Firstmac subsidiary Loans.com.au Pty Ltd, which operates the loans.com.au website. Management notes that recent home loan and debit card products are being promoted by reference to ZIP.
It is now considering what action it will take in relation to this conduct as well.
Elsewhere in the industry today, the Afterpay Touch Group Ltd (ASX: APT) share price rally looks to have come to an end this morning. The payments company's shares have run out of steam after a solid run and are down 0.5% in early trade.
