In the recent Australian Federal Court decision of Taylor v Killer Queen, LLC (No 5) [2023] FCA 364, Justice Markovic aptly explained “a tale of two women, two teenage dreams and one name” and held that international popstar Katy Perry infringed Australian clothing designer Katie Taylor’s registered trade mark for KATIE PERRY by selling clothing merchandise in Australia branded with her Katy Perry stage name.

Background

The applicant Katie Taylor, born Katie Jane Perry, is a fashion designer who has been operating a fashion label in Australia under her birth name Katie Perry since 2007.

The second respondent Katy Perry, born Katheryn Hudson, is a professional musician who has been known by her alias Katy Perry since 2002. Katy Perry adopted her mother’s maiden name Perry as her stage name in order to avoid confusion between her and the actress Kate Hudson.

The other respondents, Killer Queen LLC, Kitty Purry, Inc and Purrfect Ventures LLC (Associated Companies), are companies owned and controlled by Katy Perry under which she operates her commercial endeavours, including the sale of merchandise. 

In September 2008, Ms Taylor applied to register the trade mark KATIE PERRY in class 25 for clothes (Taylor Mark). In May 2009, over a month after the opposition period for the Taylor Mark had ended, Ms Hudson belatedly attempted to oppose registration of the Taylor Mark by applying for an extension of time to file a notice of opposition. This application was rejected, and the opposition subsequently failed. As such, the Taylor Mark achieved registration.

Ms Hudson then unsuccessfully tried to dissuade Ms Taylor from trading under the Taylor Mark, before attempting to negotiate a co-existence agreement with Ms Taylor. Ms Taylor rejected these attempts. Ms Hudson was subsequently unable to secure her own trade mark registration for KATY PERRY in class 25.

Nevertheless, Ms Hudson began promoting and selling KATY PERRY branded merchandise and clothing in Australia regardless of Ms Taylor’s registration, during her Australian tour in August 2009 and periodically from that date onwards at concerts, in retail stores and online.

Ms Taylor did not have the financial resources to demand Ms Hudson stop selling KATY PERRY branded clothing in Australia for a decade, despite her registration of the Taylor Mark. However, once she was made aware of the possibility of a litigation funder funding the case she commenced proceedings in October 2019.

The proceedings

Ms Taylor brought proceedings against Ms Hudson and the Associated Companies (collectively, Respondents) alleging trade mark infringement under s 120 of the Trade Marks Act 1995 (Cth) (Act) on the basis that the Respondents had imported for sale and distributed, advertised, promoted, marketed, sold and manufactured in Australia clothing bearing the word mark KATY PERRY from August 2009. 

Killer Queen and Ms Hudson subsequently brought a cross-claim seeking cancellation of the Taylor Mark from the Australian Trade Mark Register largely on the basis that the Taylor Mark would be likely to deceive or confuse consumers given Ms Taylor’s delay in enforcing her trade mark rights and Ms Hudson’s continually growing reputation under the KATY PERRY name in Australia.

Trade mark infringement

Markovic J held that not whilst not all Ms Taylor’s allegations of trade mark infringement could be substantiated, the following actions constituted trade mark infringement under s 120 of the Act:

• Ms Hudson in her personal capacity by posting on Twitter and Facebook promoting costumes and merchandise available for sale in Australia online, at Australian pop-up stores or during Australian tours; and

• Kitty Purry as a joint tortfeasor in infringement of the Taylor Mark by Bravado International Group Inc., a merchandise company that operated in the music industry, by advertising, offering for sale and selling clothes (or goods of the same description) bearing the words KATY PERRY during the Australian leg of Ms Hudson’s Prismatic Tour, at pop-up stores in Sydney and Melbourne, during the Prismatic Tour; and on Bravado’s website.

One relevant issue between the parties was which types of merchandise sold by the Respondents could be considered infringing goods in relation the Taylor Mark’s claim for “clothes”. Markovic J confirmed that only certain types of merchandise sold in Australia bearing the words KATY PERRY constituted clothes or goods of the same description as clothes, and that only these types of merchandise were capable of infringing the Taylor Mark. Markovic J considered that footwear, headgear, caps, hats, headbands, novelty jewellery, bags, decorative masks and decorative headwear (including cat masks, cat ears and novelty glasses) were not clothes or goods of the same description as clothes. As such, the Respondents were not infringing Ms Taylor’s trade marks by selling these products branded with KATY PERRY in Australia. In making this finding, Markovic J made reference to Pt 1 of Sch 1 of the Regulations, which draws a distinction between clothes, footwear and headgear, and limits clothes to garments which cover the body but not the extremities of feet or head

Markovic J also confirmed that use of an infringing trade mark on the internet uploaded to a website based outside Australia constitutes use for the purposes of s 120 of the Act, so long as orders from Australian could be and were in practice accepted by the relevant website. 

As such, both Ms Hudson and Kitty Purry were held to have infringed the Taylor Mark under s 120 of the Act.

Own name defence

Ms Hudson and Kitty Purry raised a defence under s122(1)(a)(i) of the Act, which overcomes a finding of trade mark infringement for a person who can show “use” of that person’s name in good faith.

Her Honour confirmed that only the person who goes by or uses the relevant name, in this case Ms Hudson herself, can take advantage of the defence in s 122(1)(a) of the Act. As such, Kitty Purry, despite being controlled by Ms Hudson, was not eligible to rely on this defence.

Her Honour also considered that the defence applied not only to the birth name of a person, but to the name by which a person is known. As such, Ms Hudson in her personal capacity was eligible to argue the defence in relation to her alias “Katy Perry”.

Markovic J set out the following relevant principles:

1. The relevant person must establish that the use of the name is in good faith. In order to do so, it must be established that use of the name was honest use – that is, the person must have honestly thought that no confusion could arise and that the person had no intention of wrongfully diverting business to themselves by using the name. 

2. Satisfaction of the requirements of good faith is not concluded by a lack of fraud or lack of conscious dishonesty.

3. There may be a lack of good faith where the person acts in a deliberate manner to take advantage of another party’s reputation, i.e. acts dishonestly, but it does not necessarily follow that in the absence of fraud or dishonesty, good faith is established, and there may be a level of objectivity to the test.

Given Markovic J considered there was no evidence of lack of good faith on Ms Hudson’s part to operate under her stage name or intention to divert trade away from Ms Taylor, Ms Hudson was held to not have committed trade mark infringement in her personal capacity. 

Rejection of cross-claim

As part of the cross-claim, Killer Queen and Ms Hudson submitted that, because of the reputation in “KATY PERRY” which signified to the Australian public that merchandise goods were supplied by or with the licence or approval of Ms Hudson, the use of the Taylor Mark in relation to clothes was likely to cause deception and confusion. 

Markovic J held that at the time of the Taylor Mark was filed (September 2008), there was no real, tangible danger of a reasonable number of people being caused to wonder whether a trade connection existed between the Taylor Mark and the use of the KATY PERRY name. Her Honour provided the following reasons:

• In September 2008, the reputation in the name KATY PERRY was in relation to entertainment and music which did not bleed over into clothing, despite the Respondents’ intention to use KATY PERRY in relation to clothes and merchandise: 

“Clothes are not related to entertainment and music […]. It may be that popular music stars such as Ms Hudson lend their names (and trade marks) to be used in connection with clothes and sell merchandise at their concerts but that does not make a reputation in one thing ie entertainment and music, related to another, in this case clothes.”

• There was no evidence of any actual confusion provided by Ms Taylor.

• While there was no “bright line of distinction” between the types of clothes offered for sale between the different brands, there was not a real, tangible danger of a reasonable number of people being caused to wonder whether those clothes might not have a trade connection with Ms Hudson. In practice, multiple aspects sufficiently differentiated the marks, namely: visual differences in the marks when affixed to the same types of clothing a performer such as Ms Hudson might wear; the spelling of “Katie” v “Katy”; the “more conservative” appearance of the Taylor Mark; and the fact that in practice, the Respondents tended to use KATY PERRY on clothing accompanied by graphics or photos of Ms Hudson.

Furthermore, Markovic J held under s 88(2)(c) of the Act that there was no likelihood of deception or confusion given:

• There was no evidence of actual confusion (which was “of some persuasion”);

• Ms Taylor had not achieved significant market penetration in its ten years and by the date of the Respondents’ subsequent trade mark application, which suggested the Taylor Mark was not widely used; and

• Ms Hudson’s strong reputation in the KATY PERRY was in fact a “compelling reason” why consumers would not be deceived or confused as to the source of goods bearing the Taylor Mark.

On this basis, Her Honour declined to cancel the KATIE PERRY mark per under s 88(1)(a) of the Act.

Orders

The final orders are yet to be made. 

At the very least Markovic J held that Ms Taylor is entitled to an injunction to restrain Kitty Purry from continuing to sell clothing branded with KATY PERRY in Australia.

Markovic J will determine at a later date how much in damages the Associated Companies will be required to pay. Ms Hudson in her personal capacity will not be required to pay damages.

Furthermore, although “there was no cynical pursuit of a benefit on their part”, Markovic J considered the Respondents’ conduct of taking a calculated risk and proceeding with selling clothing branded with KATY PERRY was “deliberate” and undertaken with a “calculated disregard” of Ms Taylor’s trade mark rights. As such, Markovic J intends to award additional damages to mark the Court’s disapproval of the infringing conduct. 

Key business/legal takeaways

• In relation to trade mark cancellation proceedings, a strong reputation in a trade mark may actually cause that party to become “a victim of [their] own success”. This is because consumers are less likely to be deceived or confused as to the source of goods bearing the well-known company or business mark.

• Use of the classification term “clothing” in class 25 goods appears to only cover garments which cover the body and not the extremities of head or feet. As such, a trade mark applicant should ensure its trade mark claims sufficiently broad goods and services to sufficiently protect its trade mark rights.

• Only a person who goes by or uses their own name can take advantage of the “own name” trade mark infringement defence.

• Where an order is placed for goods on an overseas website proprietor and that order is accepted, the website proprietor is considered to have intended to use and used the relevant trade mark in Australia for the purposes of s 120 of the Act.

• No matter how famous you may be, it is important to conduct proper clearance searches and secure a relevant trade mark registration for your brand to ensure you do not inadvertently or otherwise infringe a third party’s trade mark.

Laura McFadzean also contributed to this article.