The bill, making French obligatory in all official business and government communications, had looked certain to become law this month after breezing through Parliament.
Marketers with English-language slogans like Nike's "Just do it" and Coca-Cola Co.'s "Always" were already rethinking their ad strategies.
But the council, a group that reviews any legislation before it takes effect, on July 30 deemed the law incompatible with the French Constitution's guarantee of free expression.
"The Constitutional Council didn't want the government to legislate on what language should be," said Vincent Negre, Lintas Paris chairman. "We thought [the law] was plain ridiculous."
Mr. Toubon, sometimes mockingly called Mr. Allgood-the English translation of his name-may not be admitting defeat. He said in a French TV interview that the council's ruling is just "a technical setback."