French Supreme Court, Decision of 10 July 2012, No. 08-12010, Coeur de Princesse v. Mattel France

The French Supreme Court defined and limited the scope of protection of company names under French law. The decision will have a broad impact on the enforcement of company names, in particular against junior trademarks.

Under French trademark law, a company name constitutes a prior right to a junior trademark if there is a likelihood of confusion in the public's perception (Article L. 711-4 b of the French Intellectual Property Code (IPC)). The likelihood of confusion needs to be assessed by comparing the signs at stake, on the one hand, and the business of the company and the products and services covered by the trademark, on the other hand. The same rationale applies to an action based on unfair competition (Article 1382 of the French Civil Code) if the junior sign is not registered as a trademark.

The French company Coeur de Princesse was founded in 2003. Its business, as recorded with the Commercial Court and as provided for in its bylaws included, in particular, "games, toys and costumes". However, Coeur de Princesse's actual business was the manufacture and sale of children costumes only.

In 2003, prior to the release of its new movie "Barbie Coeur de Princesse", Mattel France (Mattel) launched a series of merchandising items under the name "Coeur de Princesse". Mattel did not register any trademarks.

In September 2004, Coeur de Princesse applied for the French trademark

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to designate toys, games and costumes, in particular.

In 2006, Coeur de Princesse initiated proceedings against Mattel, claiming that Mattel’s use of the sign COEUR DE PRINCESSE constituted trademark infringement and unfair competition.

Mattel counterclaimed and obtained, before the Paris Court of First Instance, the cancellation of Coeur de Princesse's trademark COEUR DE PRINCESSE for fraudulent filling as it was filed almost at the same time as the widely advertised release of Mattel's movie "Barbie Coeur de Princesse" and, in particular, the sale of the merchandising items. However, the Paris Court of First Instance granted Coeur de Princesse's claim for unfair competition, holding that there was a likelihood of confusion between its current business, namely the design and manufacture of costumes, including princess and fairy costumes, and the products sold by Mattel under the name "Coeur de Princesse", including dolls. The consumer was likely to think that Coeur de Princesse' costumes were derived from Mattel's movies and dolls. Mattel was therefore ordered to pay Coeur de Princesse €100,000 as damages.

The Paris Court of Appeal overruled the decision, holding that Mattel sold its dolls under the trademark BARBIE and not under COEUR DE PRINCESSE. More importantly, the actual business of Coeur de Princesse was only the manufacture and sale of costumes which was dissimilar to Barbie dolls.

Coeur de Princesse filed a further appeal before the French Supreme Court, claiming that the Court of Appeal should have taken into account its business listed in its bylaws which included games and toys. The French Supreme Court, however, dismissed Coeur de Princesse's appeal and ruled that the protection of a company name is only enforceable for the business actually carried out and not for that only listed in its bylaws.

With this decision, the French Supreme court defined and limited the scope of protection of company names to the sole business activities actually carried out. It will have a major impact on the assessment of risks a prior company name may constitute, in particular with regard to the registration or use of junior trademarks. Trademark applicants need to be even more cautious as the real business of a company might be difficult to ascertain.