Mattel partially successful in 'Monster Doll' case

Spain

On September 25 2014 Section 8 of the Alicante Court of Appeal, in its capacity as the Community Trademark Court of Appeal, has partially upheld Mattel Inc (Mattel)’s claims in an action for trademark and design infringement and unfair competition against Erjutoys SL (Erjutoys). Both companies operate in the toy sector.

Mattel is the owner of:

  • two well-known Community trademarks (CTMs) for MONSTER HIGH to identify, among other products, dolls; and

  • two registered Community designs (RCDs) to be used on dolls and their packaging.

These IP rights are used for ‘gothic-look’ dolls marketed by Mattel. Erjutoys also markets a ‘gothic-look’ doll identified in the market as ‘Monster Doll’.

Mattel filed a claim against Erjutoys before the CTM courts for:

  • infringement of its two well-known MONSTER HIGH CTMs;

  • infringement of its two RCDs; and

  • unfair competition due to acts of confusion, imitation and exploitation of the reputation of others.

Mattel also requested that Erjutoys pay compensation for the damage caused.

The Court of First Instance (CTM Court No 1) partially upheld Mattel’s claim, considering that, by marketing its ‘Monster Doll’ goods, Erjutoys had infringed Mattel’s MONSTER HIGH CTMs and had committed unfair acts of imitation. It sentenced Erjutoys to pay Mattel compensation in the amount of 33.33% of its turnover.

Erjutoys appealed the first instance judgment. Mattel, in turn, challenged the judgment regarding the amount of compensation for damages, considering that it should be higher due to the fact that Erjutoys had supposedly concealed some data in its accounts.

The CTM Court of Appeal confirmed the first instance judgment based on the following:

  • As to trademark infringement, the court deemed that the use by Erjutoys of the name ‘Monster Doll’ to identify its dolls led consumers to confuse that name with the plaintiff’s MONSTER HIGH CTMs, in view of their phonetic, graphic and conceptual similarity, the identity of the products and the extensive reputation of the plaintiff’s trademarks (which was declared to be proven).

  • Likewise, the court declared that, by marketing its ‘Monster Doll’ goods, Erjutoys had committed acts of unfair competition, in particular, acts of imitation of other parties’ products which could lead to a risk of association. In the Court of Appeal’s view, this finding did not contradict the rejection of the design infringement claim (which was not appealed by Mattel), because different parameters needed to be observed in both actions. For instance, in a design infringement action, it is the ‘informed user’ who needs to be taken into consideration, while in unfair competition actions, it is the ‘average consumer’ who is relevant. The Court of Appeal stated that both parties’ dolls share essential features and that these similarities were reinforced by the packaging, which cannot be analysed separately but must be considered together with the products. Finally, the court declared that the unfair imitation act committed by the defendant was not unavoidable, as the evidence showed the existence of many other ‘gothic-look’ dolls that did not have the essential features of Mattel’s product.

  • As to the unfair act of taking advantage of the reputation of others by imitating other parties’ products, the court declared that this had been unchallenged by Erjutoys, which had made no allegation in this regard in the appeal.

  • Regarding the amount of compensation, the court rejected Erjutoys’ argument that the turnover and the costs had been calculated on the basis of improper data. It was not acceptable for the defendant to attempt to challenge the calculation made by the plaintiff at the second instance, as this should have been done at the first instance. Moreover, the court stated that the calculation criterion consisting of the defendant’s profit (chosen by the plaintiff) was grounded on unfair enrichment, so that direct evidence of the damage was not necessary because this was a direct consequence of the infringement.

  • Finally, the Court of Appeal rejected the partial challenge submitted by the plaintiff, which attempted to increase the amount of compensation to the defendant’s total turnover on the ground that the latter had not disclosed the documentation necessary to provide some information about its analytic accounts. The court considered that it was not compulsory for the defendant to possess these analytic accounts, and it declared that the plaintiff had not been sufficiently diligent to request alternative evidence.

Maite Ferrándiz, Grau & Angulo, Barcelona

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