Pop star Katy Perry has threatened legal action against an Australian fashion designer who shares her name, demanding she remove her title from her clothing line.

Attorneys for Perry have targetted her namesake, Katie Perry, who launched her own loungewear line in Australia two years ago, asking her to remove her birth name from her products, despite the difference in spelling.

Fashion designer Perry admits she was stunned to receive a letter from the singer's lawyers, and has vowed to fight their demands in court.

She says, "I got such a huge shock. It really felt like I was being intimidated and bullied into signing everything away.

"(The letter) asked me to give up the trademark, withdraw sale of my clothes, withdraw any advertising and any websites, and sign that I will not in the future use a similar trademark to Katy Perry. I pretty much burst into tears.

"I love my business. I'm not going to give it away without a fight either. I'm not trying to become a singer. I'm not pretending to be her.

"This is my income. And it's the livelihood of my contractors as well."