271 The primary judge found that the Katy Perry Mark had a reputation prior to the priority date of Ms Taylor's Mark, however, despite that reputation, the primary judge was not satisfied that because of that reputation, use of Ms Taylor's Mark was likely to deceive or cause confusion. The reasons for that conclusion are set out above.
272 Section 88(2)(a) of the Trade Marks Act provides that an application for cancellation of a trade mark may be made on any of the grounds on which the registration of the trade mark could have been opposed. One of those grounds is s 60 of the Trade Marks Act.
273 Section 60 was amended by the Trade Marks Amendment Act 2006 (Cth) to remove an express requirement in para (a) to the opposed mark being "substantially identical or deceptively similar" to the earlier mark that benefitted from the reputation. Post amendment, s 60 places the focus on the reputation of the earlier mark and extends the operation of the section to marks that are so well known that, by reason of their reputation, use of the opposed mark would be likely to deceive or cause confusion, even if it was not deceptively similar to the well-known mark.
274 Section 60 involves a two-stage enquiry. First, whether an earlier mark (in this case the Katy Perry Mark) to the mark sought to be opposed (in this case Ms Tayor's Mark) had acquired a reputation in Australia. Second, whether because of that reputation, the use of the mark sought to be opposed would be likely to deceive or cause confusion.
275 Even if the conflicting marks are not deceptively similar, the s 60 objection may be established if the reputation of the first mark is such that use of the opposed mark is likely to result in a real risk of confusion in the trade mark sense. That is not to say that the question of the degree of similarity between the allegedly conflicting marks will be irrelevant. It is a material consideration. However, the standard set by s 60 focusses attention on the reputation of the first mark: see Qantas Airways Limited v Edwards [2016] FCA 729; 338 ALR 134 at [141]-[143] (per Yates J); Rodney Jane Racing Pty Ltd v Monster Energy Company [2019] FCA 923; 370 ALR 140 at [83], [84] (per O'Bryan J); McD Asia Pacific LLC v Hungry Jack's Pty Ltd [2023] FCA 1412; 175 IPR 397 at [143] (per Burley J). Where the conflicting marks are not deceptively similar, the strong reputation of a well-known mark may enhance the prospect that no consumers are likely to be confused: Delfi Chocolate at [29] (per Jessup J).
276 Reputation in the context of s 60 involves the recognition of the earlier trade mark by the public generally: McCormick at [81] (per Kenny J).
277 There is no statutory requirement that the reputation in the earlier mark be specific to the goods or services the subject of the opposed mark.
278 The standard of "confusion or deception" under s 60 is the same as under s 44(1) of the Trade Marks Act, namely, it is necessary to show a real tangible danger of deception or confusion occurring. A mere possibility is not sufficient: Qantas Airways at [130], [145] (per Yates J).
279 The relevant comparison for considering whether use of the opposed mark is likely to deceive or cause confusion is between the reputation of the prior mark (in this case the Katy Perry Mark) derived from the actual use of that mark, and a notional normal and fair use of the mark sought to be opposed (Ms Taylor's Mark) across all of the goods or services for which registration is sought; ie the statutory rights of use in the opposed mark: Qantas Airways at [167] (per Yates J).
280 The primary judge found at PJ [725], [741] that the Katy Perry Mark was used as a trade mark in Australia in relation to entertainment and music before the priority date of Ms Taylor's Mark, and at PJ [729] that reputation in that mark had been established. The primary judge considered that the reputation in the Katy Perry Mark was limited to music and entertainment and had no reputation in clothing (PJ at [742]).
281 In the view of the primary judge, clothes are not related to entertainment and music. This was despite evidence, acknowledged by the primary judge at PJ [742], 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. Ms Taylor's accepted such conduct as a common practice (PJ at [735]). There was also evidence before the primary judge that fashion is "a common area into which celebrities launch brands" (PJ at [137]). A parallel may be drawn between this practice and that of a brand extension. According to the primary judge, that practice did not make a reputation in one thing; ie entertainment and music, related to another; ie clothing.
282 By the priority date, Ms Taylor accepted that Ms Hudson was a nationally and internationally famous pop star. Ms Hudson had released several singles and an album which had achieved significant exposure in Australian media, the singles had been played on Australian radio, and each had achieved a level of popularity given their respective rankings on the Australian music charts (PJ at [724]). At PJ [727], the primary judge referred to the media coverage relied upon by Killer Queen and Ms Hudson which included numerous references to Ms Hudson's stage name, "Katy Perry" and observed that such references did not constitute trade mark use, but they evidenced the extent of Ms Hudson's reputation before the priority date. That reputation was in the name "Katy Perry".
283 The primary judge acknowledged at PJ [731] that it was not necessary to establish a reputation in respect of the particular goods and services of the mark sought to be opposed. She observed, however, that the distinction between those goods and services and those of the earlier mark may be a relevant matter to consider. The primary judge referred to her own observations at [148] in GAIN Capital UK Ltd v Citigroup Inc (No 4) [2017] FCA 519; 123 IPR 234, that where an opponent has a reputation in particular goods or services but that reputation does not encompass the goods or services for which registration is sought, that may be a basis for a finding that s 60 is not made out, citing Hills Industries Ltd v Bitek Pty Ltd [2011] FCA 94; 214 FCR 396 (per Lander J) in support. Both cases are distinguishable from the present case. Neither GAIN nor Hills Industries involved well-known marks or the use by an internationally famous person of their name as a trade mark. The reputations of the marks in both cases were industry and product specific, and there was no evidence of any related reputation or any practice of brand extension.
284 In Hills Industries, a case under the unamended form of s 60 of the Trade Marks Act, dealing with television set-top boxes and installation accessories, Lander J found at [197] that the DGTEC mark had only been used on set-top boxes and had not acquired a reputation in Australia of the kind that is contemplated in s 60. The evidence was that there had been no brand extension beyond the set-top boxes which were a "unique" product: Hills Industries at [188] (per Lander J). Although given his finding on reputation, it was not necessary for him to consider whether, if the DGTEC mark had acquired a sufficient reputation, the use of the DIGITEK mark would be likely to deceive or cause confusion, Lander J made some brief observations.
285 Assuming, contrary to his finding, that the DGTEC mark had acquired a sufficient reputation, it had only acquired a reputation in respect of set-top boxes. In the niche and specialist market in Hills Industries, Lander J found at [208] that the use of the DIGITEK mark in respect of television installation accessories (excluding external antennas) was not likely to deceive or cause confusion because those goods were unrelated to a set-top box. The DIGITEK registration specifically excluded set-top boxes from its registration.
286 The primary judge also referred to Davies J's comments at [203] of Singtel Optus that s 60(b) is unlikely to be satisfied unless the reputation applies to the goods and services the subject of the opposed mark. In Singtel Optus, the respondent accepted that the OPTUS mark had a reputation in Australia in respect of telecommunication services, but contended that the reputation did not extend beyond telecommunications goods and services. Davies J accepted that contention, finding on the evidence that public awareness and appreciation of the OPTUS mark did not extend beyond telecommunications goods and services and incidental services, to other services such as healthcare services (at [201]). The marks in Singtel Optus were not deceptively similar (at [138]).
287 Having found that the Katy Perry Mark had acquired a reputation in Australia, the primary judge moved to consider the second stage of the enquiry: whether because of that reputation, the use of Ms Taylor's Mark would be likely to deceive or cause confusion, concluding at PJ [753] that she was not satisfied that because of the reputation in the Katy Perry Mark, use of Ms Taylor's Mark would be likely to deceive or cause confusion.
288 With respect, we consider that the primary judge erred in reaching her conclusion. In coming to our conclusion we keep in mind that, in undertaking an analysis of questions of fact and degree, involving matters of judgment, minds may well differ on the result. A mere difference in opinion as to the result does not mean that appealable error is involved in the judgment under appeal. In the present case, there are four matters which strike at the conclusion the primary judge reached and which lead us to conclude that the primary judge's assessment was affected by error. We deal with each in turn.
289 First, the primary judge unduly confined the reputation of the Katy Perry Mark. Ms Hudson, under her stage name "Katy Perry" was by the priority date an internationally famous pop star (PJ at [723(8)]). By reason of her fame and success as an international entertainer, there would be recognition of the name Katy Perry by the public generally: McCormick at [81]-[82] (per Kenny J). The reputation in her name was of necessity a reputation in her name as a mark.
290 We consider that it was 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. To confine the reputation in the mark to music and entertainment overlooked relevant evidence.
291 In concluding that the Katy Perry Mark did not have a reputation in clothes, the primary judge ignored the common practice of pop stars to sell merchandise including clothing at concerts and to launch their own clothing labels. Ms Taylor accepted that in September 2008, it was commonplace for musical artists to put out items of clothing bearing their names and likenesses. Ms Taylor gave as examples such as Gwen Stefani and Jennifer Lopez, observing that "now obviously there's like, Rihanna and - they've kind of exploded". Further support for this proposition is found in:
(a) Mr Jensen's evidence that in addition to merchandise associated with concerts and performances, artists license their name, or another name or brand they own, as a brand for merchandise, including clothing, and other fashion items such as footwear, cosmetics, fragrances and other goods. Mr Jensen gave as examples Rihanna, Jennifer Lopez, Beyoncé and Gwen Stefani.
(b) an article published in the 16 June 2009 issue of The Australian newspaper relied on by Ms Taylor:
Fashion is a common area into which celebrities launch brands, with singers including Jennifer Lopez and Gwen Stefani launching their own fashion labels.
"A lot of US popstars are moving into all sorts of merchandising,"…"Clothing is an obvious one for popstars.."
292 Second, it was common ground that the Katy Perry Mark and Ms Taylor's Mark were deceptively similar. As both are two-word, word marks, that are aurally identical and differ only by one letter ("ie" v "y"), that concession is properly made. The two Katie/y Perry Marks are to be contrasted with, for example, MEGA MAC and MEGA JACK, which are not aurally identical and where the change from "M" to "J" changes the second name and makes a significant difference: McD Asia at [124] (per Burley J). Section 10 of the Trade Marks Act provides that a mark is taken to be "deceptively similar" to another mark "if it so nearly resembles that other trade mark that it is likely to deceive or cause confusion".
293 Notwithstanding that common ground, the primary judge proceeded to conduct her own comparison of the two marks at PJ [751], highlighting differences between the marks. While noting that the two marks were aurally the same, the primary judge emphasised the visual difference (albeit very slight), between the two marks and concluded "even when affixed to the same types of clothing a performer such as Ms Hudson might offer for sale and sell, they would not cause deception or confusion" (PJ at [751]). This finding, at odds with the common position, was said to be due to the difference in the spelling of "Katie" which was "immediately apparent" and the "more conservative" appearance of Ms Taylor's Mark. As both marks are word marks, the reference to "more conservative" appearance can only be to the spelling of the first name with an "ie" rather than with a "y" and could not be to any particular representation of the mark.
294 In our respectful view, the difference in spelling of "Katy" v "Katie" does not take the aurally identical word marks beyond deceptive similarity. Nor in our view is the difference in spelling "striking". Nor was there any evidence that "Katy" is an "unusual" spelling of the name. Whilst some die-hard fans of Ms Hudson may recognise the incorrect spelling, the ordinary consumer with an imperfect recollection of the Katy Perry Mark confronted with a garment with Ms Taylor's Mark on it would be likely to be confused as to the source of the item and wonder whether it was associated with Ms Hudson.
295 Although there is no longer a requirement for deceptive similarity under s 60, the close similarity of the two marks under consideration is highly relevant as to whether or not there is a likelihood of confusion. In the case of almost identical word marks, the likelihood of confusion is likely to be heightened if the earlier mark has a reputation, which is not diminished.
296 Third, the primary judge placed undue weight on the absence of evidence of actual confusion at and since the priority date. The primary judge described the absence as a "powerful factor" which told against the existence of any deception of confusion in any person (PJ at [743], [752]).
297 Whilst evidence of actual confusion can be a strong indicator of a likelihood of confusion, its absence is not an equivalently strong indicator that there is no likelihood of confusion arising. In Fine & Country Ltd v Okotoks Ltd [2012] EWHC 2230 (Ch); 7 WLUK 991, Hildyard J noted at [84] that courts recognise that the finding and producing of actual evidence of confusion is difficult. As observed by Diplock LJ in General Electric Co Ltd (USA) v General Electric Co Ltd "GE Trade Mark" [1972] 1 WLR 729, HL(E) at 737, the absence of confusion may be explicable, for example, by the small extent to which the mark has been used. That is the case here.
298 The absence of evidence of actual confusion is explicable in the present case by the small scale of Ms Taylor's business as at the priority date (and subsequently). At PJ [745], the primary judge noted there was no dispute that Ms Taylor's business was a small business. At PJ [790], the primary judge accepted that the fact that Ms Taylor's Mark was not widely used, by way of profile raising in relation to or on clothes, might explain the absence of any instances of actual confusion.
299 The consideration for s 60 is the notional normal and fair use of the mark across all relevant goods or services. The absence of actual confusion in this case, explicable by the limited use by Ms Taylor of her mark, tells little about the likelihood of any confusion arising from the notional fair use that might be made of Ms Taylor's Mark, and it does not merit the significant weight given to it by the primary judge.
300 Fourth, the primary judge placed some significance on how the Katy Perry Mark had actually been used by Ms Hudson subsequent to the priority date. At PJ [751], the primary judge took into account the actual use of the Katy Perry Mark on clothes sold by the appellants, and the fact that on those clothes the Katy Perry Mark is usually accompanied by graphics or photos of Ms Hudson. However, the relevant comparison for considering whether use of Ms Taylor's Mark is likely to deceive or cause confusion is between the reputation of the Katy Perry Mark, and a notional normal and fair use of Ms Taylor's Mark. Rather than just the reputation acquired by the Katy Perry Mark, the primary judge considered actual use of the mark, in combination with distinguishing graphics and photos, at a time after the priority date. At PJ [742], the primary judge found that as at the priority date, Ms Hudson had not launched her clothing brand. Post priority date use of the Katy Perry Mark on clothes that also bear images of Ms Hudson is not relevant to the s 60 enquiry.
301 Whilst each error on its own might be a matter on which minds may differ, the combined effect of the four errors leads us to conclude that the primary judge's assessment was affected by error.
302 Once the common practice is taken into account, together with the primary judge's finding that the Katy Perry Mark had a reputation in music and entertainment, and Ms Hudson's own reputation in the name "Katy Perry", and the correct comparison is made, we consider that because of the reputation in the Katy Perry Mark, the use by Ms Taylor of her mark on clothes would be likely to deceive or cause confusion. Appeal ground 3 is successful.
9.3.1 Discretion not to cancel for ground 3
303 Ms Taylor submits that even if s 60 is satisfied, the Court should refuse to cancel her mark based on ss 88(1)(a) or 89(1)(b) of the Trade Marks Act. The primary judge did not consider the question of whether to exercise the discretion, as it did not arise on the basis of her conclusions.
304 Section 88(1), which is expressed to be subject to ss 88(2) and 89, provides that the Court may, on the application of an aggrieved person or the Registrar, order that the Register be rectified by:
(a) cancelling the registration of a trade mark; or
(b) removing or amending an entry wrongly made or remaining in the Register; or
(c) entering any condition or limitation affecting the registration of a trade mark that ought to be entered.
305 The Full Court in Anchorage FC observed at [146] that, unless s 89 is engaged, the discretion under s 88(1) is at large, constrained only by the general scope and objects of the Trade Marks Act. At [158], the Full Court observed that the correct approach to the exercise of the discretion under s 88(1), once enlivened (except in so far as that discretion is qualified by the operation of s 89), is to ask whether sufficient reason appears not to order the cancellation of the registered mark. Where the grounds for cancellation are satisfied, it is for the registered owner to persuade the Court that the discretion not to cancel should be exercised in its favour.
306 Section 89(1) provides that the Court may decide not to grant an application for rectification made:
(a) under s 87; or
(b) on the ground that a trade mark is liable to deceive or confuse (a ground on which its registration could have been opposed (s 88(2)(a) in the present case, s 60); or
(c) on the ground referred to in s 88(2)(c),
if the registered owner of the trade mark satisfies the court that the ground relied on by the applicant has not arisen through any act or fault of the owner.
307 Once the threshold for enlivening the discretion under s 89 is passed, sub-s 89(2) provides that in making a decision under s 89(1), the court must take into account certain prescribed matters, as well as any other matter that the court considers relevant.
308 Regulation 8.2 provides a non-exhaustive list of matters relevant to the exercise of the discretion. These include the extent to which the public interest will be affected if the registration is not cancelled, whether any circumstances giving rise to the application for cancellation have ceased to exist, and whether there is any alternative remedy or order that would be adequate in the circumstances.
309 Whilst there is an overlap between the situations in which ss 88 and 89 could apply, that overlap is not complete. There will be circumstances, such as invalidity on a ground not involving deception or confusion where s 88, rather than s 89 will apply.
310 In this case, s 89 is engaged as we have found that Ms Taylor's Mark is liable to be cancelled on the ground that the trade mark is liable to deceive or cause confusion pursuant to s 60, a ground on which the application for the registration of Ms Taylor's Mark could have been opposed (s 88(2)(a)).
311 Ms Taylor submits that the exercise of discretion under s 89 is intended to codify the previous law as to "blameworthy" conduct, stating that a concern of this provision is to avoid a situation where "the activity of a competing trader which would otherwise be regarded as infringement can bring about a situation where the proprietor's use of its mark, because of confusion, leads to its invalidity": HTX International Pty Ltd v Semco Pty Ltd [1983] FCA 225; 49 ALR 636 at (per Fox J). In essence, the Court may exercise its discretion not to cancel a mark, if the registered owner of the mark is able to satisfy the Court that the ground relied upon, that the trade mark is liable to deceive or confuse, has not arisen through any act or fault of the registered owner. If the registered owner is able to satisfy the Court, then the Court may exercise its discretion not to grant an application for rectification.
312 However, the threshold for enlivening the discretion under s 89 is broader than just the "blameworthy" conduct of the trade mark owner. Section 89 refers to "act or fault", rather than just fault. The inclusion of "act" with the disjunctive "or" suggests that the enquiry is not restricted to blameworthy conduct, but whether the conduct of the trade mark owner has contributed to the mark becoming liable for removal on the basis of deception or confusion.
313 Ms Taylor submits that the s 89 discretion is enlivened. Ms Taylor relies on the following matters:
(a) Ms Taylor's honest adoption of her mark in 2007, without any knowledge of Ms Hudson, in the course of commencing to trade under her own name;
(b) Ms Taylor only became aware of Ms Hudson in July 2008, by which time Ms Taylor had already incurred significant personal expense in terms of time and money in her brand. At that time Ms Hudson's merchandising efforts were not directed to Australia specifically;
(c) Ms Hudson achieved her reputation within a few months prior to the priority date. Ms Taylor submitted that this acquired reputation was a "bolt from the blue".
(d) There has been no actual confusion, despite Ms Taylor trading continuously under her mark since the priority date, and nor is there likely to be any confusion.
314 The appellants submit that the s 89 discretion is not enlivened. According to Ms Taylor, the earliest time that she became aware of Ms Hudson was in July 2008 when she first heard the song "I Kissed a Girl" (PJ at [127]). It was after that awareness, in September 2008, that Ms Taylor made a conscious decision to file her application for a trade mark for a mark that was deceptively similar to Ms Hudson's stage name, Katy Perry. Ms Taylor accepted that, as at September 2008, she knew that Ms Hudson was a nationally and internationally famous pop star, and that musical artists such as Ms Hudson offered for sale clothing bearing their names at their concerts.
315 This 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. Both women put blood, sweat and tears into developing their businesses. One became an internationally famous entertainer in the music industry, the other, a small Australian fashion designer. As the fame of one grew internationally, the other became aware of her namesake and filed a trade mark application.
316 Although Ms Taylor adopted her mark innocently, by the time she applied for her mark she had knowledge of Ms Hudson, her reputation, and her mark. She also accepted that at the time she filed her application, she knew that it was likely that music artists sold clothing bearing their names at concerts and that celebrities often moved into merchandising. Ms Taylor applied for her mark with knowledge of the matters that ultimately led to Ms Hudson's success on the s 60 ground.
317 We consider that Ms Taylor's act of filing the trade mark application with knowledge of Ms Hudson, her reputation, and her mark in circumstances where she also knew 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, and accepted such conduct as a common practice, is sufficient not to enliven the discretion under s 89.
318 In the event that the discretion was to be enlivened, we would not have exercised that discretion in Ms Taylor's favour for the following reasons.
319 First, from time to time, Ms Taylor has sought to align herself with Ms Hudson in order to obtain some reflected benefit, conduct which would only increase the likelihood of consumers potentially being deceived or confused (PJ at [220]).
320 Second, although there is no evidence that any consumers have actually been confused despite the many years of overlapping use of the two marks in Australia, the Full Court observed in Anchorage FC in the context of the s 88 discretion, that whilst an absence of deception during the years of overlapping use is a consideration that may be relevant to the exercise of the discretion, it is not a determinative consideration, or even one that must be given significant weight: Anchorage FC at [166] (per Nicholas, Yates and Beach JJ).
321 Third, the public interest considerations in preserving the integrity of the Register and protecting consumers from being confused or deceived do not favour the exercise of the discretion not to remove Ms Taylor's Mark from the Register. There is a public interest in ensuring that trade mark registrations only be made in favour of applicants who are entitled to obtain them. As the High Court explained in Health World Ltd at [27] (per French CJ, Gummow, Heydon and Bell JJ), the Trade Marks Act offers various facilities for "… ensuring that the Register is pure in the sense that no mark is to be registered unless valid, and no registration of a mark is to continue if it is not valid …". The Full Court in Anchorage FC gave significant weight to the public interest considerations: see Anchorage FC at [163], [192] (per Nicholas, Yates and Beach JJ).
322 Fourth, in July 2009, Ms Hudson proposed a co-existence agreement with Ms Taylor that would have let both Ms Hudson and Ms Taylor continue to use their marks. Ms Taylor rejected that offer of a co-existence agreement, which as circumstances turned out, would have been an excellent outcome for both parties. The absence of any actual confusion over the many years of co-existence suggests that there has been no confusion on the part of consumers. However, having rejected the offer, Ms Taylor then chose to commence infringement proceedings against the appellants. 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.
323 Having considered the matters raised by Ms Taylor discussed above, we are not satisfied that sufficient reason has been shown to not cancel the registration of Ms Taylor's Mark, even if we considered the relevant discretion to be enlivened, which we do not.