Court Denies Molson Coors’ Appeal To Lower Damages, Get New Trial In Stone Brewing Ruling

Trademark

from the stonewalled dept

Well, I’ll give the Ninth Circuit this much: at least when the court is wrong, it is wrong fast. It was just a few weeks back that we discussed Molson Coors’ appeal for both the rulings and damages over its trademark fight with Stone Brewing. For those not familiar with the history here, here’s a quick and admittedly detail-light summary. Molson Coors has the Keystone brand of beer as one of its properties. In 2017, it rebranded that beer, de-emphasizing the “Key” and putting more emphasis on the “Stone” part of the brand. This followed several years of Molson Coors advertising the brand by also emphasizing the “stone” portion, though not on its packaging. This included campaigns for “hold my stones” and other advertising, to which Stone Brewing sent cease and desist notices in 2010. After the 2017 rebrand, Stone Brewing sued for trademark infringement and won, with a jury awarding it $56 million in damages for loss of past profits, loss of future profits, and for the corrective advertising Stone Brewing insisted it would need to set the public’s mind right on all of this.

The appeal cited all kinds of issues with the ruling. There is the laches defense, with Molson Coors arguing that Stone Brewing missed its window for suing when it took no action after its 2010 cease and desist notice was ignored. It also appealed several evidentiary decisions made by the lower court in the case that Molson Coors claims were unfair in the proceedings. That one, I believe, is the lawyers throwing spaghetti at the wall to see what sticks. And, finally, it appealed the jury awards on several grounds.

Based on some of the questions and comments from the judges on the appeal, I had already suspected that Molson Coors was unlikely to get everything it wanted out of this appeal. But I have to admit that even I am surprised that the Ninth Circuit sided 100% with Stone Brewing and affirmed the ruling and damages entirely.

Molson Coors went on to appeal the 2022 verdict, attempting to claw back the jury award. That appeal was argued in November before the U.S. District Court of Appeals for the 9th Circuit in San Jose. A three-judge panel ultimately upheld the verdict and jury award. San Francisco Law firm BraunHagey & Borden, which argued the case for Stone, claims it is one of the biggest trademark verdicts in history.

Stone, a Southern California craft beer pioneer, was originally awarded $56 million in general damages from Molson Coors, which owns beer brand Keystone Light, at trial in San Diego in 2022; it must now also pay interest.

I’m going to put the evidentiary ruling questions off to the side on this, because I find them far less compelling and, frankly, not terribly interesting. On the question of laches, you can read the court’s logic below.

The laches clock began running in 2017 when Molson Coors launched its “Own the Stone” marketing campaign. See Evergreen Safety Council v. RSA Network Inc., 697 F.3d 1221, 1226 (9th Cir. 2012) (The laches clock begins when the plaintiff “knew (or should have known) of the allegedly infringing conduct.”). Pre-2017 usage is not the basis for any part of Stone Brewing’s claims. See Jarrow Formulas, Inc. v. Nutrition Now, Inc., 304 F.3d 829, 837 (9th Cir. 2002) (holding that laches is “triggered if any part of the claimed wrongful conduct occurred beyond the limitations period”). Rather, all of Stone Brewing’s claims relate to the 2017 “Own the Stone” campaign. Pre-2017, Molson Coors never referred to Keystone as “anything other than Keystone in packaging[,] marketing[,] or advertising materials,” never broke up the product name “Keystone,” and used the term “Stones” just to refer to the number of beers in the case (“30 stones”) or, in the plural sense, as a catch phrase (for example, “Hold my Stones”). Stone Brewing brought this suit within the four-year statute of limitations.

Follow? Laches doesn’t work as a defense because Stone Brewing’s suit only talks about the specific 2017 marketing/branding campaign, not any of the previous uses by Molson Coors. Except all of this is over very similar claims. The start date of a specific campaign in 2017 doesn’t, in any way, change that the suit is over the same or similar supposedly infringing activity between the same brands. The court’s logic on this makes some sense, to be fair. But it’s also, in some ways, allowing Stone Brewing to call its shot in a way that seems designed almost specifically to circumvent the laches defense. Put another way, if Molson Coors thought it was in the clear due to the inaction of the previous C&D Stone sent it, you can certainly understand why this end around for laches would have come as somewhat of a surprise.

As for the damages awarded, the court falls back on the standard that jury awards are “entitled to great deference” absent any absolutely ridiculous awards “not supported by evidence or only based on speculation or guesswork.” Notably, the request from Stone Brewing specified damages in specific amounts for concrete categories, while the jury award was free from all of that specificity.

Stone Brewing sought damages in three categories: $32.7 million for past lost profits, $141.4 million for future lost profits, and $41.8 million for corrective advertising. The jury returned a verdict for Stone Brewing of $56 million in general damages—roughly one quarter of requested damages—without indicating what portion of the award came from which category.

So how did the jury come to that number as a general award? Well, all I can do is guess and speculate, see, since none of that is detailed out here. Which sure seems to indicate that at least perhaps the jury based its award on speculation and guesswork, particularly when you consider that the largest part of the damages requested by Stone Brewing was for “future profits”. I can’t think of an area in which a jury would have to speculate to come to a number more than in the arena of unrealized profits for a company that maybe would have occurred in the future sans infringement.

There were some other, more minor appeals of the damages awarded, but those were also declined by the court.

And so it would seem that Stone Brewing, itself a large corporation, will get its $56 million, plus interest now, for supposed trademark infringement. All while I maintain that even a drunken moron in a hurry couldn’t possibly mistake Stone Brewing’s craft beers and Keystone.

Filed Under: 9th circuit, keystone beer, laches, stone, trademark
Companies: molson coor's, stone brewing