Ninth Circuit Affirms $56 Million Verdict for Stone Brewing in Trademark Infringement Dispute Over “Stone” Mark

Stone Brewing Co., LLC v. Molson Coors Beverage Co. USA LLC, Case No. 23-3142, 2024 U.S. App. LEXIS 32846 (9th Cir. Dec. 30, 2024)

The Ninth Circuit affirmed a $56 million jury verdict in favor of Stone Brewing Co., holding that Molson Coors’s 2017 rebranding of Keystone Light violated Stone Brewing’s trademark rights under the Lanham Act. The court’s decision clarified key issues surrounding laches, likelihood of confusion, and damages, providing valuable guidance for trademark disputes involving rebranding strategies.

Laches Defense

Molson Coors argued that Stone Brewing’s claim was barred by laches, citing its historical use of the term “Stone” in marketing phrases such as “Hold my Stones.” The Ninth Circuit rejected this defense, emphasizing that laches is triggered only by conduct directly relevant to the claims at issue. Here, the court noted that Molson Coors’s earlier uses of “Stone” were distinct from its 2017 rebranding campaign, which first prominently featured the term “Stone” in isolation as part of Keystone Light’s packaging and marketing. This distinction demonstrates that courts will limit the laches period to the specific actions forming the basis of a trademark claim, ensuring that past unrelated uses do not unfairly shield infringing conduct.

Likelihood of Confusion

The court applied the Sleekcraft factors to evaluate the likelihood of confusion and upheld the jury’s finding:

• Similarity of Marks: Molson Coors’s decision to de-emphasize “Keystone” and highlight “Stone” created significant visual and phonetic overlap with Stone Brewing’s trademark. The court underscored that rebranding efforts that isolate or emphasize shared elements of a competitor’s mark substantially increase the likelihood of consumer confusion.
• Proximity of Goods: Both brands operate in the beer market, selling their products in overlapping retail environments such as grocery stores and restaurants. This overlap amplified the potential for mistaken association between the two brands.
• Marketing Channels: Evidence showed that both brands employed similar distribution and marketing strategies, including placement in the same store aisles and advertisements targeting similar consumer demographics.
• Consumer Care: The court highlighted that beer is a relatively inexpensive product, leading to lower consumer scrutiny in purchasing decisions. This context heightened the risk that customers would confuse Keystone Light with Stone Brewing products.
• Actual Confusion: Stone Brewing introduced survey evidence and anecdotal accounts of consumer and distributor confusion, which the jury found persuasive. These instances of confusion reinforced the conclusion that Molson Coors’s rebranding caused harm to Stone Brewing’s brand.

By analyzing these factors, the court demonstrated how overlapping market presence, shared consumer bases, and rebranding strategies emphasizing a competitor’s mark can create actionable confusion under the Lanham Act.

Damages Award

The $56 million damages award encompassed past lost profits, future lost profits, and corrective advertising costs. The Ninth Circuit found the award reasonable and well-supported by evidence, including expert testimony projecting the long-term impact of consumer confusion on Stone Brewing’s sales. The jury credited testimony showing that the confusion harmed not only Stone Brewing’s core brand but also its broader portfolio, illustrating how trademark infringement can create ripple effects across a company’s product lines. The court’s affirmation of the award underscores the importance of linking evidence of harm to a comprehensive damages calculation and demonstrates the weight courts give to detailed expert analyses in substantiating financial losses.

Conclusion

The Ninth Circuit’s decision in Stone Brewing Co., LLC v. Molson Coors Beverage Co. USA LLC, 2024 U.S. App. LEXIS 32846 (9th Cir. 2024), underscores the risks of rebranding strategies that encroach on a competitor’s trademark and highlights the robust protections available under the Lanham Act. By carefully applying laches principles, analyzing consumer confusion, and affirming significant damages, the court provided a roadmap for addressing similar trademark disputes in the future.

To learn more about these issues, contact the author of this article, Arvind Jayakumar. Arvind is a brand protection attorney who counsels brands on how to prevent unfair competition, avoid unnecessary liability, and enforce their intellectual property rights. He has successfully litigated various commercial issues related to unfair competition, false advertising, trademark infringement, copyright infringement, breach of contract, and other business disputes. In addition to his litigation practice, Arvind boasts a robust trademark and copyright prosecution practice in which he helps brands register their intellectual property and secure IP rights.