Molson Coors must pay Stone Brewing $56M in trademark dispute, jury finds

Dive Brief:

• Molson Coors must pay craft beer maker Stone Brewing $56 million for creating consumer confusion after rebranding its Keystone brew as “Stone,” a San Diego federal jury ruled following a three-week trial. The eight-person jury also determined Molson Coors had no predetermined intention of infringing on the trademark.

• During the time covered by the lawsuit, Molson Coors sold more than $1.7 billion of Keystone beer branded as “Stone,” the craft beer maker said. In an emailed statement, Molson Coors spokesman Marty Maloney said there “are still several defenses that will be resolved by the court and we are evaluating our options for appeal.” 

• This is the second major trademark dispute in the last few years for Molson Coors. Future Proof Brands accused the large beverage maker of stealing its product name for its then-new hard seltzer brand Vizzy. The case was settled in 2021.

Dive Insight:

As food and beverage makers fight for every dollar they can amid changing consumer tastes and habits, companies are doing everything they can to protect their brands. One option is filing trademark lawsuits.

This isn’t just an issue in the alcoholic beverage space. Another recent high-profile case involved Nestlé USA claiming Danone North America’s Silk brand coffee creamers copied unique branding and packaging designs from its Coffee-mate Natural Bliss line. The companies settled in November. Candy maker Ferrara also won a lawsuit last month banning look-alike THC-laced Nerds.

The just-decided Molson Coors lawsuit, first filed by Stone in 2018, says the craft brewer’s California-based brand is “instantly recognized by its name” and “enjoys exceptional customer loyalty and engagement, with a devoted fan base.”

The lawsuit noted sales of Keystone dropped more than 25% from 2011 to 2016. At the same time, Stone said its 2017 sales totaled more than $70 million, placing it among the 10 best-selling craft brewers in the country.

For a company aiming to freshen an aging offering, it’s popular to do a rebrand through a name, new packaging or other changes. The practice helps attract consumer interest with something that is new, with the intention of coaxing them to try it again. 

The beer industry as a whole has been struggling for much of the last several years.  Americans — most notably younger consumers including millennials and Gen Zers — are often drinking less alcohol or turning to other offerings like spirits, craft beers or ready-to-drink products including hard seltzer. Large beer companies such as Molson Coors and its rival AB InBev have seen their market share further eroded by craft breweries using new ingredients and clever product names.

Stone said in a statement that Molson Coors “threatened” its heritage by infringing on its trademark, and said Molson Coors “will put the ‘Key’ back in ‘Keystone’ ending their hostile 4-year co-op of the Stone name.”

In a statement voicing its objection to the jury’s decision, Molson Coors’ Maloney said “there is no credible confusion between Keystone Light” and Stone Brewing’s products. Instead, the “lawsuit was not driven by consumer confusion,” but rather a $464 million debt Stone has to pay to its private equity investors in 2023. 

Previously, attorneys representing Molson Coors said the “Stone” nickname has long been a part of Keystone marketing. They argued shoppers were unlikely to mistake Stone’s craft products for a “budget beer” such as Keystone.