Katie Perry v Katy Perry – what happens next?

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Posted By on 10/03/22 at 10:02 AM

By Shannan Welsh (Paralegal) and David Robbins (Principal Solicitor)

Late last year we reported on the trade mark infringement battle between Australian clothing designer Katie Taylor (nee Katie Perry) and American popstar Katy Perry.  While the case is yet to be determined, it is interesting to consider what the appropriate form of relief to be awarded to Ms. Taylor may be, if she is successful.

Earlier on in the case, Federal Court Justice Markovic determined that the issues of liability and quantum in this case would be split, with the trial on liability to be held in November 2021, and a separate trial on quantum to be held at a later date if required. On the question of liability, if Ms. Perry is found to have infringed Ms. Taylor’s trade mark, the focus in the quantum trial will then be on the appropriate form of monetary remedy. However, there will be no need to proceed with a hearing on quantum if Ms Taylor cannot establish liability by Ms Perry, or Ms Perry is successful in her cross claim to have Ms Taylor’s trade mark cancelled from the register.

Damages

The most common remedy awarded in trademark infringement cases is damages. Damages are awarded to compensate any loss suffered by the applicant (Ms. Taylor) as a result of infringement by the respondent (Ms. Perry). They aim to return the applicant to the position they would have been in had the respondent’s infringement not occurred.

In addition to compensatory damages, additional damages may also be available. The court has broad discretion to award additional damages even where an applicant may only be entitled to nominal compensatory damages. In exercising its discretion, the court will consider factors such as the flagrancy of the infringement, any “calculated disregard for the applicant’s rights” or “cynical pursuit of benefit” by the respondent.  The amounts awarded for additional damages are not restricted by any mathematical formula, and in many cases are significantly more (often in the hundreds of thousands) than compensatory damages. A key reason for this is that compensatory damages alone are perceived to be an insufficient deterrent not to engage in infringing conduct.

Account of Profits

An alternative remedy that is available, but less commonly sought by applicants, is an account of profits. The idea of this remedy is to strip the respondent of any financial gain obtained by reason of the infringement and award it to the applicant. A key reason why applicants don’t often pursue this remedy is because additional damages are not available for an account of profits, and as noted above, such damages may be the main source of monetary relief. In this case, it may also be difficult for Ms. Taylor to show that any profits obtained by Ms. Perry are attributable to the use of Ms Taylor’s trade mark, rather than her fame and reputation as a popstar.

Which to choose?

If successful in her claims, Ms. Taylor will have to decide whether she wishes to obtain damages or an account of profits – she cannot have both.

If the case proceeds to a quantum trial, we expect Ms Perry’s lawyers will argue that Ms. Taylor has not suffered any loss, nor has Ms Perry made any profits, by reason of the use of Ms Taylor’s trade mark – but rather any profits Ms Perry has made are attributable to her fame and reputation. Accordingly, should the case reach that point, it may well be that the amount of money Ms Taylor receives will largely depend on the Court’s view of whether Ms. Perry acted in good faith in using her own name, or acted flagrantly and dishonestly.

Predicted outcome

If the liability trial does find that Ms. Perry infringed Ms. Taylor’s trade mark (and Ms Perry’s cross claim is unsuccessful), for the reasons above we predict that Ms Taylor will pursue a claim for damages. This will give her the opportunity to also receive additional damages, which could be substantial if Ms Perry’s conduct is found to be flagrant  or dishonest. Pursuing damages instead of an account of profits may also alleviate the difficulties Ms. Taylor may face in proving that any profits Ms Perry made were attributable to her trade mark infringement, and not her own fame and reputation.

The court heard the parties’ oral closing submissions in late February, and with the case now awaiting judgment we look forward to seeing how this one plays out.

KHQ Lawyers - David Robbins

David Robbins Principal Solicitor

David leads our Competition Law & Regulatory Compliance team and also specialises in intellectual property law.  He is a highly experienced litigator in state and federal courts, and regularly... Read More