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Why Stone Brewing’s verdict stands in the Molson Coors dispute

The US$56 million trial verdict has been upheld by the US Court of Appeals in the final stages of its trademark dispute between Stone Brewing Co and Molson Coors. db investigates how the battle led to this conclusion.

The trademark infringement case began back in 2018 when Stone Brewing sued Molson Coors alleging that Molson changed its packaging of Keystone Light to emphasise the word “stone” in its “Own the Stone” marketing campaign.

According to new reports via The National Law Review, Stone Brewing argued that this change infringed its trademarks and caused consumer confusion while Molson raised a variety of defenses, all of which were rejected. A jury found infringement and ultimately awarded Stone Brewing US$56 million after the evidence supported the conclusion that a beer company’s rebranding of one its beers infringed a competitor’s trademark.

Back in September, the drinks business looked at how the court denied a retrial for the case and revealed how back in March 2022 a jury had returned a verdict in Stone Brewing’s favour, ordering Moors Colson to pay the US$56 million for the breach.

The reports outlined how the court noted that prior to 2017, Molson never referred to Keystone as anything other than Keystone in its packaging, marketing, or advertising materials, and specifically never broke up the product name or used the term “stones” to refer to the number of beers in a case (“30 stones”) or as a catch phrase (e.g., “Hold my Stones”).

As such, the court found that Stone Brewing brought the suit within the four-year statute of limitations period. Additionally, Stone Brewing applied to register the “Stone” mark in 1996, and the Ninth Circuit found there was substantial evidence that Molson Coors did not approve production of packaging that used “Stone” before that date.

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The court also explained that both brands compete in the same beer space, use the same marketing and distribution channels, and are relatively inexpensive products, all of which allowed the jury to plausibly conclude that Molson’s 2017 product refresh of Keystone Light was likely to cause consumer confusion.

However, law reports recently cited how Molson Coors then also challenged the damages award. At trial, Stone Brewing sought damages in three categories: US$32.7 million for past lost profits; US$141.4 million for future lost profits: US$41.8 million for corrective advertising.

The jury for the Ninth Circuit has now returned a verdict of US$56 million in general damages, which was about one quarter of the requested damages, but did not indicate what amount came from each category.

Molson Coors then argued that Stone Brewing could not recover future lost profits because no court has awarded speculative future lost profits. Despite this, the Ninth Circuit has since disagreed, citing its 2014 decision in Oracle v. SAP in which it upheld a damages calculation that considered a lost future “ongoing stream of revenue from [the infringed upon company’s] former customers.”

Both Molson Coors and Stone Brewing have been contacted by db for fresh commentary this week on what has already been described by Stone Brewing co-founder Greg Koch as a “hostile” battle.

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