The four-years-in-the-making trademark infringement trial between Stone Brewing Company and Molson Coors finally started this week with attorneys for both sides offering opening arguments and testimony from Molson Coors CEO Gavin Hattersley.
In February 2018, the San Diego-headquartered craft brewery filed the lawsuit against MillerCoors, then the U.S. business unit of Molson Coors, alleging that the 2017 packaging and marketing refresh for the company’s Keystone Light economy brand prominently featuring the word “Stone” infringed upon Stone’s intellectual property.
The federal trial is expected to last three weeks, according to Courthouse News Service (CNS), which has covered the trial’s first two days and described the opening day gallery “packed with Stone Brewing employees and supporters wearing company branded T-shirts.”
During opening arguments, Stone’s attorney, Noah Hagey, told jurors that “the reason we’re here is because of a terrible decline in Stone’s business,” according to CNS. Hagey argued that Molson Coors’ brand refresh and marketing of Keystone Light in 2017 has confused consumers and led to a 20% decline — or $174 million — in Stone’s business.
“The jury will have to decide whether Stone deserves to be saved, whether its name deserves to be saved and protected,” he said, according to the outlet.
Stone wasn’t alone in declining sales. Keystone Light sales had declined nearly $100 million from 2011 to 2016, Hagey said, leading to the brand refresh that separated the words “Key” and “Stone.” He added that despite the lawsuit, Molson Coors has continued its marketing push of the Stone name, showing jurors a screenshot of the current Keystone Light website that features the slogan “Grab a Stone.” Those tactics, according to Hagey and Stone, have led to consumer confusion, with the attorney playing a video of a focus group of people who said they’d buy Keystone Light if asked by a friend to buy a Stone IPA, CNS reported.
Molson Coors attorney John Bunge argued that his client wasn’t “competing against an IPA from San Diego” but with Anheuser-Busch InBev, the world’s largest beer manufacturer, CNS reported.
According to Bunge, Stone’s sales declines were not attributable to Keystone Light’s brand refresh but due to a slowdown in sales of craft beer that started in 2019, as well as failed expansion efforts, including a now-shuttered taproom in Napa, California, and abandoned international efforts in Shanghai, China, and Berlin, Germany.
On Day Two of the trial, Molson Coors CEO Gavin Hattersley testified that the company decided to undergo a brand refresh of Keystone Light in 2016 as the economy beer brand was bleeding sales at twice the rate of A-B’s Natural Light, CNS reported.
Bunge told jurors that Keystone Light and Stone were marketing to different consumers at different price points, with more than half of Keystone Light consumers not working and a quarter of its customers earning less than $30,000 annually. He continued that the two companies sell their offerings in different channels, with 98% of the Keystone Light sales coming from grocery and convenience stores, while 40% of Stone’s sales come from on-premise establishments, CNS reported. Nearly half of Stone’s sales come from the California market, where Keystone “didn’t have much success,” accounting for less than 1% of the brand’s sales, Bunge added.