A federal judge has denied Molson Coors’ attempt to toss a $56 million jury award to Stone Brewing in the San Diego craft brewery’s trademark infringement lawsuit over the 2017 refresh of Keystone Light packaging, according to an order filed Tuesday.
Judge Roger T. Benitez wrote that although he disagreed with several of the jury’s findings, he would “not second guess” their March 25 decision. As such, Benitez denied Molson Coors’ motions for judgment as a matter of law, affirmative defenses and declaratory judgments.
Throughout his order, Benitez made a point of agreeing with several of Molson Coors’ positions. Nevertheless, he concluded that “this court’s disagreement with the jury’s ultimate conclusion cannot give rise to a judgment as a matter of law against Stone.”
“Here, because the jury’s verdict is supported by evidence on the record, the Court finds it to be reasonable,” he added in denying Molson Coors’ motion for judgment as a matter of law.
Molson Coors had staked its motion for judgment as a matter of law on four points:
- Stone failed to prove Molson Coors acted willfully, which the jury found in favor of Molson Coors at trial;
- No reasonable jury could find a likelihood of consumer confusion;
- No reasonable jury could find Stone was damaged by Molson Coors’ actions;
- No reasonable jury could find that Stone was the first to use the “Stone” mark.
On the likelihood of consumer confusion, Benitez indicated that had the court been “in the position of fact-finder in this case,” it would have agreed with Molson Coors’ position “that a reasonably prudent consumer would be confused by refreshed Keystone Light packaging,” However, he wrote that “looking at the evidence presented, a reasonable jury could have reached the conclusion that it did.”
Although the judge noted that Molson Coors’ attorney “presented strong evidence,” including “testimony that showed the structural flaws” of Stone’s surveys, Benitez wrote that the jury found the survey evidence “convincing enough to find a likelihood of confusion.”
“The court will not second guess this determination,” he wrote.
In regards to proof of damages, Molson Coors had argued Stone could not prove actual damages suffered because of a lack of actual evidence of consumer confusion. The judge noted that Nielsen survey data presented by Molson Coors indicated that new Keystone Light consumers following the packaging refresh were not siphoned from Stone, and Stone’s lost consumers were not trading down to the economy beer.
Although Benitez wrote that he agreed with Molson Coors’ arguments that Stone failed to show that the Keystone Light brand refresh was responsible for the decline in sales, he wrote that “a reasonable jury was entitled to look at the charts showing a decline in sales, weigh the conflicting expert options presented by the parties, and come to the determination that the timing of the refresh and the subsequent decline in Stone’s fortunes are related and that MillerCoors bears responsibility.”
“While it certainly seems more likely that Stone’s drop in sales has much more to do with increased competition and oversaturation of the craft beer market, the evidence presented allowed the jury to reach a different conclusion and the court finds this conclusion to be reasonable,” Benitez wrote.
On prior use, Benitez wrote that “most harmful” to Molson Coors’ prior use case was the lack of evidence that the company used “Stone” and “Stones” in the market between 1997 and 2010. “Based on this lack of evidence, the jury could have reasonably concluded that [Molson Coors’] use of ‘Stone’ or ‘Stones’ to the extent they used it at all was not continuous.”
Benitez ultimately ruled against Molson Coors’ motion for entry of judgment on affirmative defenses. He also ruled that all pending declaratory judgment issues were now resolved.
Stone had sought declaratory judgment that Molson Coors’ continued use of the Stone mark in the sale, marketing or distribution of beer would infringe upon the craft brewery’s rights of the Stone trademark.
Meanwhile, Molson Coors sought declaratory judgment for its counterclaims, which included the right to use Stone and Stones in advertising Keystone beer, unenforceability of the Stone mark against Molson Coors’ due to laches, declaration of non-infringement based on Molson Coors’ right to use the Stone mark, and declaration of Molson Coors’ exclusive right to use the Stone mark in the U.S.
“The jury’s verdict necessarily means Stone is entitled to use the Stone mark, that [Molson Coors’] use of Stone and Stones leads to a likelihood of confusion, and that [Molson Coors] does not have an exclusive right to use Stone in the United States for marketing of its beers,” Benitez wrote. “There remains no actual controversy requiring a declaration of rights by this court.”
In a statement shared with Brewbound, Molson Coors senior director of corporate affairs Jennifer Martinez-Roth wrote that “we remain optimistic about our position and will continue exploring our options in the process.”
Stone CEO Maria Stipp told Law 360 in a statement that “we are pleased that the jury’s verdict has been affirmed: There is only one ‘STONE’ in beer and Molson Coors needs to pay for its infringement.”
In a statement shared with Brewbound, Stone’s lead trial counsel, Noah Hagey, said: “This has been one of the longest trademark infringement cases in history, in addition to being one of the most successful. We are pleased for our client who has persevered during many twists and turns these last many years. Long live the Seventh Amendment.”
The court is still expected to rule on Stone’s motion to disgorge $116 million in profits and award treble damages of $168 million from Molson Coors.
On June 24, Sapporo Holdings announced it would acquire Stone Brewing’s brewery operations for $165 million, but not its distribution business. The transaction is expected to close in August.