Molson Coors faced a setback on Monday when a federal judge in San Diego declined to overturn a jury's decision, which found the company liable for USD 56 million in damages for violating the trademark rights of craft brewery Stone Brewing.
U.S. District Judge Roger Benitez ruled against Molson Coors, stating that the evidence did not support the company's arguments, and therefore, it was not entitled to a new trial or a court ruling in its favor.
Additionally, Judge Benitez rejected Stone Brewing's motion for a new bench trial on its claims that Molson Coors had used the "Stone" name in bad faith, which could have led to further damages.
Rachel Dickens, a spokesperson for Molson Coors, expressed the company's disagreement with the decision and noted that they are considering their options, including a possible appeal. Representatives for Stone Brewing did not immediately respond to requests for comment regarding the ruling.
The legal dispute began in 2018 when Stone Brewing, based in Escondido, California, sued what was then MillerCoors, alleging that the marketing of Keystone beers featuring the words "Stone" and "Stones" without "Key" had caused confusion among consumers and infringed upon their trademarks. Stone Brewing argued that Molson Coors had rebranded Keystone to take advantage of the goodwill associated with their brewery. (inside.beer, 12.2.2018)
In 2022 after more than 4 years, the case of Stone Brewing vs. Molson Coors finally went to trial. In an opening statement, Stone Brewing said its sales had decreased 20% or USD 174 million in the five years since Keystone rebranded. (inside.beer, 17.3.2022)
While Stone Brewing had to report declining beer sales, the Molson Coors beer brand Keystone experienced significant success after the rebranding. The company even referred to it as "another gem that has only started to shine in the last few years." (inside.beer, 25.3.2022)
However, like other major craft breweries in the US,Stone Brewing also experienced dwindling sales during the pandemic and it was hard to judge the exact amount of damage through the rebranding.
Following a three-week trial, Stone Brewing was ultimately granted a USD 56 million damages award by U.S. District Judge Roger Benitez and an eight-person jury. While the verdict determined that Molson Coors had violated Stone Brewing's trademark name, the jury did not conclude that these violations were intentional. (inside.beer, 26.3.2022)
In October of the same year, Molson Coors contended that the verdict should not stand because Stone Brewing had not demonstrated that its advertising was likely to confuse consumers.
Although Judge Benitez previously indicated that he might have ruled in Molson Coors' favor if he were the fact-finder, he upheld the verdict on Monday, deeming it not "unreasonable or against the 'great weight' of the evidence." Furthermore, the court rejected Molson Coors' attempts to reduce or overturn the damages awarded by the jury.
To counter the allegations, Molson Coors has since modified the appearance of its brand, and reversed the original separation of the words “Key” and “Stone.” This action effectively addressed the primary point of contention raised by Stone Brewing.
Despite the favorable verdict for Stone Brewing, the brewery's founder, Greg Koch, is likely to be only marginally concerned. He sold his brewery in June of last year at a reported price of USD 165 million to Sapporo U.S.A., the American subsidiary of the Japanese brewing company with the same name. (inside.beer, 27.6.2022)