Singer Katy Perry has lost a trademark battle with an Australian fashion designer called Katie Perry.

Katie Taylor, who sells clothes under her birth name Katie Perry, sued the pop star, saying her merchandise infringed a trademark she owned.

On Friday, a judge agreed that clothing sold for Katy's 2014 Australian tour did breach Katie's trademark.

"This is a tale of two women, two teenage dreams and one name," Justice Brigitte Markovic wrote in her ruling.

The judge said the Teenage Dream singer, born Katheryn Hudson, used the Katy Perry name in "good faith" and does not owe any personal compensation to the designer.

However, the star's company Kitty Purry must pay damages, which will be decided next month.

The designer started selling clothes using the brand name Katie Perry in 2007, and registered it as a trademark in Australia the following year.

The singer, who scored her first hits in 2008, was ruled to have infringed the trademark by promoting a jacket advertising her album Roar, "Cozy Little Christmas" hoodies, T-shirts, sweatpants and scarves, on social media.

However, the judge rejected further claims relating to sales in certain stores and websites, and merchandise for a 2018 tour.

Justice Markovic dismissed a bid by the pop star to cancel the Katie Perry trademark.

The designer described the outcome as a victory in a "David and Goliath" case.

"Not only have I fought [for] myself, but I fought for small businesses in this country, many of them started by women, who can find themselves up against overseas entities who have much more financial power than we do," she wrote on her website.