I Guess It's Never Really Over: Full Court overturns Katy Perry trade mark infringement finding

The Full Federal Court of Australia has overturned a 2023 first instance decision which found that US pop star, Katy Perry, had infringed the registered trade mark of Australian designer, Katie Taylor, by selling and promoting merchandise bearing her stage name.

The decision arises out of a trade mark dispute between the singer (real name Katherine Hudson) and Taylor, who runs a Sydney loungewear label under the brand name Katie Perry. The dispute first began in 2009, when Taylor received a cease and desist letter from Hudson’s lawyers, who also sought to oppose a trade mark application filed by Ms Taylor, by filing an application for an extension of time to file a notice of opposition. Ms Taylor successfully registered her trade mark KATIE PERRY, which was registered in class 25 for “clothes” with a priority date of 29 September 2008. Hudson abandoned the opposition and both she and Ms Taylor continued on with their ventures under the names Katy Perry and Katie Perry, respectively.

In 2019, Taylor secured the support of a litigation funder and brought infringement proceedings against Hudson in the Federal Court of Australia. Hudson cross-claimed for cancellation of Taylor’s trade mark, including on the basis that Hudson could have opposed registration of the mark in 2008.

KATIE PERRY mark removed

At first instance, Justice Markovic found that Hudson had infringed Taylor's mark (albeit only as a joint tortfeasor, given the infringing acts of designing, manufacturing and selling KATY PERRY branded merchandise were undertaken by third party merchandising companies). By cross-claim, Hudson sought that Taylor's trade mark be cancelled on the basis that Hudson's reputation meant that Taylor's mark would be likely to deceive or cause confusion, pursuant to s 60 of the Trade Marks Act, both as at the 2008 priority date of the trade mark (under s 88(2)(a) of the Act) and as at the date the cross-claim was filed in 2019 (under s 88(2)(c) of the Act).

That cross-claim failed at first instance as Justice Markovic found that although Hudson had acquired a reputation at the priority date, that reputation was in relation to entertainment and music, rather than clothes (being the goods for which Ms Taylor's mark was registered). In addition, there was no evidence of confusion between the two marks at that time. Although Hudson had a substantial reputation in 2019, by that point being a globally renowned pop star, the judge considered that fame made it unlikely that consumers would be deceived or confused by Taylor's mark (making her a "victim of her own success").

On appeal, the Full Court considered that the first instance decision on this point was affected by error. When considering whether Ms Taylor's mark would have been likely to deceive or confuse in 2008, Justice Markovic overlooked the common practice of pop stars to expand into fashion. Although evidence of actual confusion may be a strong indicator that confusion is likely, it is not determinative and the paucity of confusion evidence was found to be explicable by the small scale of Ms Taylor's business both in 2008 and in 2019.

Although the power to cancel a mark under s 88 of the Act is discretionary, the Full Court determined that Ms Taylor's mark should be cancelled on the basis that she was aware of Ms Hudson and her reputation at the time she applied for her trade mark. Further, since 2008, Ms Taylor had often sought to align herself with Ms Hudson to obtain some benefit, which the Court considered would only increase the likelihood of consumers being deceived or confused.

No mark = no infringement

The Full Court's judgment is both hot and cold for Ms Hudson, as her case with respect to infringement actually went backwards on appeal. At first instance, only one of her corporate entities, Kitty Purry LLC was found liable for infringement as a joint tortfeasor with one of the third-party merchandising companies (of three companies who sold KATY PERRY branded merch during the relevant period). On appeal, the Full Court held that Ms Hudson had acted beyond her role as merely a director of that company, such that she was also a joint tortfeasor in her personal capacity. The merchandise bore her name and likeness, she was closely involved in providing feedback on, and approving the design of merchandise, and for selecting merchandise to be brought on tour. Further, a side letter entered into by Ms Hudson with one of the merchandising companies contained a personal guarantee by Hudson to fulfil the commitments contained in Kitty Purry LLC's agreement with that company.

Nevertheless, in circumstances where the Full Court has resolved to remove Ms Taylor's trade mark from the register, there can be no infringement of that trade mark by Kitty Purry LLC or Ms Hudson herself.

Current state of play

As a result of the Full Court's decision, Ms Taylor's registration for her KATIE PERRY trade mark will be cancelled. As is the usual practice, the order doing so is stayed until Ms Taylor has had the opportunity to appeal to the High Court of Australia. If, and when, Ms Taylor's mark is cancelled, neither party will have a trade mark registration for KATIE or KATY PERRY in relation to clothing. Notwithstanding her loss on appeal, Ms Taylor can ostensibly continue on selling clothes under her KATIE PERRY brand name. Ms Hudson is also, however, now free to apply for registration of her brand KATY PERRY in class 25 for clothing. Once granted, Ms Hudson will then have the option of enforcing that registration against Ms Taylor but will assumedly weigh up the strategic benefits and optical disadvantages of doing so.

As their Honours said at paragraph 322 of the judgment, "it is no longer possible to return to the time of peaceful co-existence."