What happens when a digital giant with a household name faces off against a newcomer using a nearly identical-sounding brand on physical store shelves? The Federal Court of Australia recently addressed this exact scenario in the decision of Prezzee Proprietary Limited v Epay Australia Proprietary Limited [2025] Federal Court of Australia 1662. This case shows how trade mark law protects established brands in the digital age, particularly when a competitor attempts to enter the market using branding that sounds the same, even if the products look different. The ruling centers on whether a “Powered by” tagline can constitute trade mark infringement and how far a court will go to stop a product launch that threatens an established company’s reputation.
Background of the Dispute
The applicant in this matter, Prezzee Proprietary Limited, is a major player in the Australian gift card market. They own a suite of Australian registered trade marks for the word “Prezzee” and various related marks, with their earliest registrations going back to October 2014. Prezzee has built a massive business around electronic gift cards, reporting billions of dollars in sales over the last twelve months. Their brand is synonymous with the digital delivery of vouchers and stored value cards through mobile applications and web platforms.
The respondent, Epay Australia Proprietary Limited, is part of a larger group that has operated a successful gift card business in New Zealand since 2006 under the name “Prezzy Card”. In late 2024, Epay decided to expand its reach into the Australian market. However, rather than launching directly as “Prezzy Card,” they initially registered trade marks in Australia for the word “Giftzzy”. In August 2025, they launched the “Giftzzy Card” in Australia as both a virtual product and a physical card available in retail stores.
The conflict arose because of a specific design choice on the Epay cards. While the cards were branded as “Giftzzy,” they also featured the phrase “Powered by Prezzy Card” in a top corner. Prezzee alleged that this use of the word “Prezzy” was far too similar to their “Prezzee” trade mark and was likely to confuse Australian consumers. They sought an urgent interlocutory injunction, i.e. a temporary court order, to stop Epay from using the “Prezzy” name while the full legal case was being prepared.
The Legal Test for an Injunction
To get a temporary injunction, Justice Charlesworth explained that Prezzee had to prove two main things. First, they had to show there was a “serious question to be tried”, meaning their case for trade mark infringement had a sufficient likelihood of success. Second, they had to show that the “balance of convenience” favored granting the order. This means the court must weigh the potential harm to the applicant if the order is refused against the potential harm to the respondent if the order is granted.
Justice Charlesworth noted that these two factors are not considered in isolation. If a case is very strong on its merits, the court might be more willing to impose a burden on the respondent. Conversely, if the injunction would cause massive, irreversible damage to a business, the applicant needs to show a very high probability of winning at trial.
Was the Use of “Prezzy” a Trade Mark Use?
A major point of contention was whether Epay was actually using “Prezzy” as a trade mark. Under section 17 of the Trade Marks Act 1995, a trade mark is a sign used to distinguish goods or services from those of another business. Epay argued that “Prezzy” was just a tagline of low prominence and that consumers would only see “Giftzzy” as the main brand.
The court did not agree. Justice Charlesworth looked at the intention of Epay’s Regional Managing Director, who admitted he included the tagline to draw a connection to the successful New Zealand “Prezzy Card” brand. The judge found that the phrase “Powered by Prezzy Card” was intended to serve as a badge of origin, telling customers that the “Giftzzy” card was backed by the reputation of “Prezzy”. This subjective intention, combined with the objective appearance of the card, led the court to conclude that it was indeed being used as a trade mark.
The Comparison of the marks
The next question was whether “Prezzy” was “deceptively similar” to “Prezzee”. Epay did not strongly argue against this point during the hearing. The two words sound identical when spoken aloud, which is a key factor in trade mark law. Even though the spelling is slightly different, the phonetic identity creates a high risk that a consumer would hear one and think of the other or assume they are related brands from the same company.
Physical Cards and Digital Software
One of Epay’s most interesting defenses focused on the specific categories of goods and services for which Prezzee had registered its marks. Prezzee’s registrations in Class 9 primarily cover computer software, application software, and gift cards in electronic form. Epay pointed out that their products were physical, magnetically encoded cards, which they argued were not covered by Prezzee’s specific trade mark descriptions.
Justice Charlesworth admitted there was “apparent merit” in this submission, but it was not enough to defeat the application for an injunction. Under section 120 of the Trade Marks Act 1995, an infringement can occur even if the goods are not identical, provided they are of the “same description” or “closely related”. The court found that a physical gift card and an electronic gift card are undeniably related in the eyes of a consumer. Therefore, there was still a serious question to be tried regarding whether Epay’s conduct infringed Prezzee’s rights.
The Balance of Convenience and Logistical Hardship
The most difficult part of the case for the court was deciding what to do about the physical cards already in stores. By December 2025, there were about 47,000 “Giftzzy” cards bearing the “Prezzy” tagline in approximately 1,800 retail outlets across Australia. Epay argued that being forced to retrieve these cards would be “incredibly expensive,” time-consuming, and potentially fatal to their new business. They claimed that their retailers, i.e. many of whom are small convenience stores, would be frustrated and might stop stocking “Giftzzy” cards altogether.
Epay also argued they had no easy way to communicate with these 1,800 retailers. They claimed they did not have an email database for them and that their only communication tool was a “terminal blast” message that appears on a payment screen and is often ignored.
Justice Charlesworth was skeptical of these claims of “impossibility”. The court pointed out that Epay invoices these smaller retailers twice every week. The judge noted that if a business has the means to send a bill and collect money, it certainly has the means to send a message telling the retailer to stop selling a specific product. The court found that the “balance of convenience” favored Prezzee because their reputation was at stake. If Epay were allowed to keep selling cards with the “Prezzy” name, it would interfere with Prezzee’s exclusive right to use and exploit their own trade mark.
The Court’s Orders
The court ultimately granted the injunction. Justice Charlesworth ordered Epay to stop selling or promoting any goods or services using the “Prezzy” signs. To handle the physical cards in the market, the court imposed a set of strict requirements:
i) Email Communication, i.e. Epay had to send an email to all retailers by December 12, 2025, directing them to stop selling the cards and remove them from display.
ii) Disabling Activation, i.e. by December 15, 2025, Epay was required to disable the electronic activation of these specific cards through their payment terminals, provided it was technically feasible.
iii) Physical Retrieval, i.e. Epay was ordered to physically collect all the offending cards from retail stores by January 30, 2026.
These orders were designed to be clear and enforceable, ensuring that the “Prezzy” name was removed from the Australian marketplace as quickly as possible while a final trial is pending.
Key Takeaways for Brand Owners
This decision provides several important lessons for any business operating in a digital or physical marketplace.
First, phonetic similarity is a powerful factor. If your brand name sounds the same as a competitor’s, it does not matter if you spell it differently or use different colors. The court will look at how the brand is perceived by the average consumer, and the ear is often just as important as the eye.
Second, “Powered by” is more than just a tagline. Using a famous or established name as a secondary brand can still be considered trade mark use. If the goal is to borrow some of the “origin” or “quality” associated with that second name, you are likely infringing on someone’s rights.
Third, technology is not a shield against legal orders. The court is increasingly savvy about how modern businesses communicate. Claiming that it is too hard to reach your partners or retailers will not work if you already have a functional commercial relationship with them. If you can bill them, you can notify them.
Fourth, the court will protect the “exclusive right to exploit”. One of the most important takeaways is that the court values the property rights of trade mark owners. Even if an award of money (damages) might fix some of the problems later, the court is willing to step in early to protect a brand’s reputation and its right to be the only one using a specific name in its industry.
Conclusion
The Prezzee v Epay case is a reminder that trade mark protection is strong in Australia. It shows that the Federal Court of Australia is prepared to take significant steps, i.e. including forcing the recall of thousands of physical items, to protect an established brand from confusingly similar newcomers. Whether a brand is virtual, physical, or a bit of both, the principles of clarity and honesty in branding remain the standard. For companies looking to expand across borders, this case is a clear warning: do your homework on local trade marks, because an “urgent launch” can very quickly turn into an “urgent recall”.
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