High Court (Australia) to decide the battle of the Katy(ie) Perrys

Section 60 – Existing Reputation

1. The Full Court did not give proper regard to the distinction that section 60 draws between reputation generally and reputation in another trademark. They stated that it would be “artificial to excise and disaggregate the reputation of Katy Perry, the entertainer, from the reputation in the Katy Perry Mark for the purposes of the s 60 enquiry”. Ms Taylor’s counsel argued this was incorrect both as a matter of fact and principle, as section 60 requires that an objection must be based on a trademark having a reputation in Australia, not on a person’s reputation alone.
2. The Full Court’s focus on the common practice of pop stars selling merchandise involved a blurring of the test in section 60. They considered the potential for a celebrity to extend into other areas by brand extension, rather than focusing on the reputation in the trademark established at the date of filing. This approach effectively used hindsight to make good the breach of section 60, which was another error.
3. The Full Court applied a test of imperfect recollection, which is used to gauge deceptive similarity, but section 60 expressly requires a consideration of reputation in a mark. The Full Court’s reasoning overlooked the proposition that deceptive similarity and section 60 involve different considerations.

This misinterpretation could result in unjust outcomes for trademark owners who have established a reputation in a specific trademark but not in other areas.

Section 88(2)(c) – Cancellation because ongoing use would be likely to deceive or cause confusion

1.  The Full Court did not properly deal with the submission that section 88(2)(c) requires consideration of the actual use made by the registered owner of its trademark as at the date of the application for rectification. The circumstances of reputation and use at that time should be used as a means of predicting what is likely to happen, in terms of confusion going forward.
2. There was no evidence any confusion had occurred, however, the Full Court asserted that on the basis of actual use, there was a requisite likelihood of deception or confusion occurring.
3. Ms Taylor’s counsel argued that Ms Taylors limited use of her trademark and the global reputation of Ms Hudson in 2019 meant consumers of each person’s clothing goods were and are unlikely to be deceived or confused, at that time or in the future.

The Full Court’s failure to address the submission that section 88(2)(c) requires consideration of the actual use made by the applicant of the registered owner of its trademark as at the date of the application for rectification could lead to an incorrect assessment of the likelihood of deception or confusion based on actual use.

Section 89 – Courts discretion not to cancel

1. The Full Court declined to exercise its discretion not to cancel Ms Taylor’s trademark because the Full Court considered the grounds for cancellation under section 88(2)(c) were “contributed to” by Ms Taylor’s actions. That is, she applied to register her trademark with the knowledge of Ms. Hudson’s reputation and that it was a common practice of pop stars to sell clothing merchandise.
2. Ms Taylor’s counsel argued the Full Court erred by:

   (a) relying on the “act” limb of section 89 and including subjective knowledge elements which, are not ‘acts’ or could not objectively affect the likelihood of deception or confusion occurring for section 88(2)(c) to apply;

   (b) stating Ms Taylor’s acts “contributed to” the ground for rectification arising because that is a lesser involvement than required by the words of section 89, which require that the ground relied on under s88(2)(c) must arise because of both the “act or fault of the registered owner”; and

   (c) not giving sufficient weight to the requirement for “fault” and noting the Full Court acknowledged that Ms. Taylor’s conduct was innocent and not blameworthy.

This could make it more difficult for trademark owners to defend their trademarks against rectification claims, even when their conduct was innocent and not blameworthy.