Molson Coors Appeals The $56 Million Judgement In Stone Brewing Case

When we and others discussed the massive trademark lawsuit between Molson Coors, makers of Keystone beer amongst other brands, and Stone Brewing, it was billed as a David versus Goliath scenario. Now, if I remember my bible studies correctly, once David slung a couple of well-placed rocks into Goliath’s forehead, Goliath didn’t then get up and ask for another go of it (mostly due to David removing Goliath’s head from his body, I assume).

But here, Molson Coors is doing exactly that. After being hit with a $56 million judgement by the jury in the case, Molson Coors asked for the judgement to either be thrown out or that a new trial be spun up. Both of those requests were denied by the court at the time, along with a denial of Stone Brewing’s request for a new trial because it thought Molson Coors hadn’t been hit with enough damages.

Now, it’s important to keep in mind that this trademark action was over actions taken by Molson Coors, such as advertising and trade dress changes that emphasized the “Stone” in “Keystone,” and our analysis that these changes constituting trademark infringement being very questionable. I was a beer-drinker for nearly two decades (I’m in my 40s now, so now I’m a snooty wine/whisky drinker) and it strains credulity to think that anyone is going to be confused between Keystone beer and Stone Brewing beer merely because the former changed the font size of “stone” on its packaging. There were some other issues as part of the suit, such as parts of the trade dress referring only to how many “stones” were in a 15-pack and the like, but most of this rested on the prominence of “stone” on the packaging.

Well, Molson Coors is appealing, with its reasoning being mostly along those same lines.

Molson Coors argued before a panel of Ninth Circuit judges Tuesday that the decision in a trademark dispute against Stone Brewing was based on faulty legal reasoning and asked the panel to reverse the lower court verdict.

“No reasonably prudent beer consumer would ever confuse the two, especially because Stone IPA is priced at three to four times the price of the economy Keystone Light,” said Quinn Emanuel Urquhart & Sullivan attorney Kathleen Sullivan, who represents Molson Coors.

Sullivan also said no rebrand ever took place to capitalize of Stone Brewing’s name, calling her client’s change in design a “trivial” packaging change — not a rebrand, but a “refresh.”

“There’s not a lot of real estate in marketing, so sometimes you have to split things into two lines.”

Now, as the post notes, some members of the panel of judges have already starting pushing back on some of Molson Coors’ argument. And some of that pushback is pretty concerning if you believe that there should be some measure of sanity in trademark law. Here’s an example.

U.S. Circuit Judge Susan P. Graber, a Bill Clinton appointee, pushed back. She noted that after the change, “stone” was much more prominent on the can, calling into question the company’s motivations.

Sullivan dismissed this reasoning. “If the Hard Rock Cafe starts italicizing ‘rock,’ that doesn’t mean it now infringes Dwayne Johnson — The Rock’s — trademark,” she countered.

“Well, it might be if he owns a restaurant,” chimed in U.S. Circuit Judge Patrick J. Bumatay, a Donald Trump appointee.

That’s crazy. You have to really do some mental gymnastics to imagine that any kind of customer confusion would occur with that sort of change between two brands that have achieved the kind of fame both The Hard Rock Cafe and Dwayne “The Rock” Johnson have gained. And the same is true in this case. Both Keystone and Stone Brewing are established, well known brands in the beer industry. So much so, actually, that the whole “David versus Goliath” trope that we all engaged in is probably an analogy misfire.

Stone Brewing might be a David to Molson Coors’ Goliath, I suppose, but Stone Brewing is the Goliath to most of the rest of the craft brewing industry. Sure, Molson makes billions in revenue per year, but Stone Brewing makes hundreds of millions in revenue itself. Compare that with another established craft beer player, such as Rogue Ales & Spirits, which brings in about $60 million. Given the notoriety of both brands, you would think there would be very real customer confusion that Stone Brewing could have brought as trial evidence in a voluminous way. Stone Brewing attempted to bring some of that to trial with studies and some social media posts, but I would say it was all rather weak given the context.

Especially given the timeline at play here, which is another point that Molson Coors raised on appeal.

Molson Coors also says the case never should have gone to trial because Stone Brewing missed its window to sue.

Stone Brewing sent a cease and desist letter to Molson Coors in 2010 over its use of the terms “stone,” “stones” and “hold my stones,” but didn’t file a complaint until 2017 when it claims to have begun suffering from the rebranded cans.

“Once we weren’t sued by 2014, we were entitled to think they didn’t sue us,” said Sullivan, referring to the statute of limitations.

The laches defense, in other words. If we’re going by California law here, as I think we are, the analogous state law based on precedent would be a 4 year period of reasonable time to file suit, with anything beyond that being an unreasonable delay. An example of that precedent would be Pinkette Clothing, Inc. v. Cosmetic Warriors Limited, where this same court said four years was the line in the sand.

Given some of the commentary by the panel of judges, I have no idea how likely it is that Molson Coors gets any kind of win here. And that’s unfortunate, because none of this sounds like real trademark infringement to this formerly beer-soaked writer.