Molson Coors Loses $56 Million Stone-Cold Appeal

Molson Coors, one of the largest brewers in the world, failed to convince the Ninth Circuit Court of Appeals to either grant a new trial or reduce the $56 million jury verdict in the trademark infringement case against them brought by Stone Brewery.

Molson Coors owns and operates the Keystone Beer brand. Stone Brewery claimed that Molson Coors marketed the brand with a focus on the words "Stone" and "Stones" in order to sow confusion with Stone Brewery's products.

Did the jury get it right? In an unpublished December 30 opinion, the Ninth Circuit Court of Appeals held that it did.

What's In a Name?

The Keystone brand was created in 1989 by the Adolph Coors Company, which would merge with Molson, Inc. in 2005 to create the Molson Coors Brewing Company. While some varieties have been scrapped over the years, Keystone Light has increased in popularity.

Stone Brewing was founded in 1996. It was purchased by Sapporo Brewing in 2022. While having a successful track record as a craft brewery and selling almost 365,000 barrels in 2022, their output is less than 1% of Molson Coors. Did the jury believe that a behemoth of a brewing company felt the need to deceive customers from a brewery with a tiny fraction of its market share?

Well, yes and no. The jury agreed that Molson Coors was guilty of violating the Lanham Act through trademark infringement, trademark dilution, and unfair competition. Stone Brewery sent Molson Coors a cease and desist letter in 2010, but it did not appear to deter the larger brewer.

Molson Coors had made the "Stone" part of "Keystone Light" much more prominent than the rest of the letters. The jury believed customers could be confused into thinking that Keystone Light was a Stone Brewery product. Images of before and after cans made for a compelling argument.

The jury deemed Molson Coors responsible for the ensuing loss of sales suffered by Stone Brewery and made a judgment of $56 million in Stone's favor. Molson Coors' claim that "Stone" had always been part of their marketing campaign wasn't proven to the jury's satisfaction. However, the jury also found that Molson Coors' unfair marketing practices weren't done intentionally.

Ninth Circuit Cuts Off Molson Coors' Appeal

Left with a bitter aftertaste, Molson Coors appealed. Among other procedural arguments, Molson Coors claimed no reasonable consumer could confuse the two brands, pointing out that the craft beer is up to three times more expensive than notably budget-friendly Keystone Light.

The Ninth Circuit was not convinced, however. As the Ninth Circuit panel noted, consumer confusion asks "whether a reasonably prudent marketplace consumer is likely to be confused as to the origin of the good or service bearing one of the marks.”

In finding no clear error in the jury's determination, the Ninth Circuit pointed out that:

• Stone Brewery introduced actual evidence at trial of consumer confusion, including survey evidence
• Molson Coors expressly highlighted “Stone” in its 2017 product refresh, including its "Own the Stone" campaign, and de-emphasized "Keystone."
• While Keystone may be a budget-friendly beer, the two brands still compete in the same "beer space"
• The brands use the same marketing and distribution channels
• Even though Keystone is much less expensive as a beer choice, beer is still a relatively inexpensive consumer good. Consumers do not put as much thought into what beer they buy as they would when buying a car, for example.

Ultimately, the Ninth Circuit affirmed the entire award of damages. While Molson Coors will survive the $56 million hit, you could buy a lot of Keystone Light with that kind of cash.

Related Resources

• Trademark Infringement Law FAQ (FindLaw Learn About the Law)
• Let's Not Overthink Coors Light (FindLaw's Federal Courts)
• Top 6 Trademark Mistakes (FindLaw's Small Business)