Days after upholding a $56 million jury verdict in favor of Stone Brewing, a federal judge rejected the Escondido, California-based craft brewery’s attempt to recover hundreds of millions of dollars in profits and damages from Molson Coors as part of a trademark infringement dispute over refreshed Keystone Light branding.
In an opinion issued Friday, U.S. district judge Roger T. Benitez denied Stone’s post-trial motions for treble damages, attorneys’ fees and disgorgement of profits. Stone had sought to disgorge $116 million in profits and receive an award of treble damages of $168 million from Molson Coors, in addition to attorneys’ fees in the 4-year-old lawsuit.
In regards to treble damages and disgorgement of profits, Benitez gave “substantial weight” to the jury’s finding that Molson Coors did not willfully infringe upon Stone’s trademark. In addition to the jury’s finding, the court said “the totality of circumstances do not support disgorgement of profits in this case, either from before or after the verdict.”
“The jury’s finding of infringement, but not willfulness, logically follows the evidence presented that while the ‘Own the Stone’ campaign and 2017 Keystone Light refresh may have led to a likelihood of consumer confusion, [Molson Coors] was not attempting to use Stone’s name to sell its own beer and had a good faith belief that its product was not infringing on Stone’s ‘STONE’ trademark,” Benitez wrote. “This is not deliberate indifference, but rather a mistaken belief that it was advertising and selling a non-infringing product.”
Of the other factors to consider in disgorgement of profits — “deterrence, fairness, availability of adequate remedies at law, and irreparable harm” — Benitez wrote that “all factors favor” Molson Coors.
“The court agrees with [Molson Coors] that this is not a typical infringement case where the infringer is selling a counterfeit product or attempting to pass off its own product as that of another,” he added. “Any deterrent effect is minimal as [Molson Coors] has already committed to updating the infringing packaging.”
Additionally, “the empirical evidence” — Nielsen data — “cuts against” speculation from Stone’s experts that the refreshed Keystone packaging and “Own the Stone” campaign “came at the expense of Stone,” Benitez wrote.
“While Stone argues allowing [Molson Coors] to keep these profits would amount to unjust enrichment, the opposite is also true,” he wrote. “Stone would be reaping a windfall of sales of Keystone Light beer that, based on the evidence, never would have gone to Stone.”
Any losses could also have been figured into the $56 million jury award, Benitez added.
As for treble damages, Benitez also rejected Stone’s motion.
“Stone’s proffered evidence regarding loss of market share and loss of points of distribution are correlated with Keystone Light’s refresh, but there is scant evidence of causation, especially in light of the other factors (many more players in the craft beer market, craft beer’s stagnation as a whole) that are much more likely the cause of the losses Stone claims, as well as the Nielsen surveys indicating no Stone-to-Keystone or Keystone-to-Stone customers,” he wrote. “This is not a case where the damages are hard to quantify, as Stone argues, but rather one where the evidence simply fails to prove a higher damages award is appropriate.”
The jury’s award is “adequate compensation for the damages Stone suffered,” Benitez added.Finally, Benitez denied Stone’s attempt to recoup attorneys’ fees. Of note in his analysis, the judge wrote: “Stone also points to the ‘scorched earth’ nature of [Molson Coors’] litigation strategy, while ignoring the role Stone themselves played in fostering a contentious litigation environment. While this case was well litigated by both parties, it certainly was one of the most fiercely contested cases the court has seen in many years.”
“Based on the totality of the circumstances, this court does not find this to be an exceptional case that warrants awarding attorneys’ fees to the prevailing party,” Benitez wrote.
Earlier last week, Benitez upheld the $56 million jury verdict in Stone’s favor, while also noting 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.
In late June, 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 this month.