Hot n Cold ruling from Australian Federal Court partially overturns Katy Perry trade mark decision

Katy Perry has earned a pyrrhic victory in Australia this week. In its judgment delivered on Friday 22 November, the Federal Court of Australia partially allowed the appeal in Taylor v Killer Queen, LLC (No 5) [2024] FCAFC 149, finding that the American entertainer (but not her associated company) was able to rely on the own name defence to infringement and should succeed in her action to cancel the KATIE PERRY trade mark registration.

Background

Katy Perry during the Prismatic tour in 2014.
Wikimedia: Creative Commons Attribution 2.0

The case concerned the Australian trade mark registration for the words "KATIE PERRY" (No. 1264761), which was registered in class 25 for "clothes" with a priority date of 29 September 2008. The trade mark application was filed by an Australian fashion designer, who was born Katie Jane Perry but has also gone by the names Katie Howell and Katie Taylor (called "Ms Taylor" in the judgment). She settled on the brand name Katie Perry and started her own fashion label in 2007. Ms Taylor produced "luxury loungewear" such as jogger-style pants and t-shirts, which were sold online and in a showroom.

Katy Perry is a famous American pop artist, who was born Katheryn Hudson, but adopted the stage name Katy Perry in 2002. Readers may recall that Katy Perry had breakthrough global success in early 2008 with multiple singles (such as "I Kissed a Girl" and "Hot n Cold") from her "One of the Boys" album. Her first worldwide tour in 2009 included four shows performed in Brisbane, Sydney and Melbourne, and she sold "KATY PERRY" branded apparel and merchandise at these concerts. Her management team set up a web-store by 24 September 2008 to advertise and sell such merchandise.

Katy Perry's team became aware of the KATIE PERRY trade mark application in May 2009 and authorised lawyers to send a cease-and-desist letter, then attempt to resolve the matter through negotiation of a co-existence arrangement. Katy Perry also filed an application to register KATY PERRY and launched opposition proceedings against the KATIE PERRY mark, but withdrew the opposition (and eventually her trade mark application) on the view that her interests were best served by avoiding further publicity. Ms Taylor rejected the offer of a co-existence agreement, which, as the Federal Court noted, "would have been an excellent outcome for both parties" because:

... having rejected the offer, Ms Taylor then chose to commence infringement proceedings against [Katy Perry]. In that sense, Ms Taylor has brought this result on herself. Unfortunately, it is no longer possible to return to the time of peaceful co-existence.

Infringement

In the primary judgment, Katy Perry was found liable for trade mark infringement in relation to garments. On appeal, Ms Taylor argued that the judge had construed the specification too narrowly and should have also found that footwear, headgear, caps, hats and headbands fall within the KATIE PERRY registration. The Court considered the dictionary definitions of "clothes", which ordinarily applies to garments that cover the body, but not the head or feet. The Court noted that:

It is the obligation of the trade mark owner clearly to specify the goods in respect of which the mark is to be registered and thereby define the scope of the monopoly they claim. Where there exists a penumbra of uncertainty in the scope of the registration, this would not generally be resolved in favour of the trade mark owner.

Therefore, Katy Perry's shoe range and other merchandise did not fall within the specification. [Merpel: With the SkyKick decision, this has been a big month for cases about the importance of the specification of goods or services!].

Joint Tortfeasors

The Katy Perry-branded clothing had been produced and distributed through arrangements with Bravado Merchandising, which was found liable for primary infringement. It was argued that Katy Perry personally, as well as her associated companies (such as Killer Queen, LLC and Kitty Purry, Inc) were liable as joint tortfeasors. The question was whether these parties had "acted in concert in a common action or design with Bravado, or that one or all of them aided, counselled, directed or joined in commission of the tort of trade mark infringement by Bravado".

Regarding the liability of Katy Perry herself, the matter was complicated because she was the sole shareholder, director, and CEO of the companies Killer Queen and Kitty Purry. Therefore, the Court had to disaggregate her actions as the human agent of these companies from any actions she took in her personal capacity. The Court found that both the Kitty Purry company and Katy Perry herself were joint tortfeasors, the latter because her actions went beyond her role as director and CEO due to her personal investment in promoting her image. She had also signed a side agreement with Bravado Merchandising, which demonstrated her knowledge of the tortious acts.

Infringing clothing was also advertised and sold under the Katy Perry mark by the companies Blackout Merch and Epic Rights. However, these arrangements were different, so Katy Perry and her associated companies were not joint tortfeasors with Blackout Merch or Epic Rights.

Defences

The decision would have been music
to Katy Perry's ears (but not Kitty Purry's)

Katy Perry and associates sought to rely on the honest concurrent use defence (see previous GuestPost about this defence in Australia here). Whilst the Court found that the use had been honest, there had not been concurrent use of the Katy Perry mark in Australia in relation to clothing by the relevant date, so this defence was not available.

Katy Perry and associates also sought to rely on the own name defence. Ms Taylor argued that this defence should only be available in relation to a person's legal name, and therefore would not apply to a stage name. However, the Court found that the defence was available for adopted names, if that was the name by which a person is usually known. Katy Perry was also able to rely on the defence even though she had assigned all of her trade marks to the Killer Queen company. 

The question arose whether the defence was available to joint tortfeasors, namely the Kitty Purry company. The Court agreed with the primary judge that it only applies to a person who "uses" the name, and being a joint tortfeasor did not amount to "use". Whilst a successor company can rely on the defence, Katy Perry had assigned her trade marks to Killer Queen, not to Kitty Purry. Therefore, the company was still liable for infringement.

Cancellation

Katy Perry argued that the KATIE PERRY registration should be cancelled. The Court agreed, finding that the primary judge had erred in finding that mark would not be likely to cause confusion. 

Katy Perry had obtained international fame before the priority date. This was not confined to her reputation as a pop star: she enjoyed general public recognition. Given the common practice of pop stars to sell merchandise including clothing at concerts and to launch their own clothing labels, the Court found that Katy Perry's reputation could extend to clothes. [Merpel: by contrast, in the UK case involving Rihanna, the courts did not take the view that all pop stars would necessarily have a reputation or goodwill associated with clothing].

Whereas the primary judge took the view that "Katie" is more conservative than "Katy", such that consumers would notice the "striking" difference in spelling and not be confused, the Court held that the ordinary consumer would have an imperfect recollection of the "Katy Perry" mark and would likely be confused by the aurally identical marks. For these and other reasons, the Court held that the KATIE PERRY mark would be likely to deceive or cause confusion.

The Court noted that "[t]his case is an unfortunate one in the sense that two enterprising women in different countries each adopted their name as a trade mark at a time that each was unaware of the existence of the other." However, by the time of filing the trade mark application, Ms Taylor knew of Katy Perry and her international reputation. After rejecting the co-existence agreement, from time to time, Ms Taylor has sought to align herself with Katy Perry in order to obtain some reflected benefit. Finally, there were public interest considerations in preserving the integrity of the register and ensuring that trade mark registrations only be made in favour of applicants who are entitled to obtain them.

Therefore, the Court declined to exercise its discretion in Ms Taylor's favour, and the KATIE PERRY registration will be cancelled. 

Final Thoughts

With hindsight, Ms Taylor might regret her refusal to co-exist with the American pop star and sue for trade mark infringement in October 2019. Speaking to the press yesterday, Ms Taylor said that "My fashion label has been a dream of mine since I was 11 years old and now that dream that I have worked so hard for, since 2006, has been taken away." Sometimes, that's what you get for waking up in Federal Court.

The trade mark cancellation will not come into effect immediately, as the Federal Court wanted to allow time for Ms Taylor to seek leave to appeal to the High Court. We will have to wait and see whether she decides to keep fighting this trade mark battle.