'Stone' Cold Justice: Ninth Circuit Taps Molson Coors for $56 Million in Trademark Battle

January 22, 2025

In a significant victory for trademark holders, the United States Court of Appeals for the Ninth Circuit has affirmed a $56 million jury verdict against Molson Coors Beverage Company in favor of Stone Brewing Co., LLC, for trademark infringement under the Lanham Act (Stone Brewing Co., LLC v. Molson Coors Beverage Company USA LLC, No. 23-3142).

Summary of the Case

The Plaintiff/Appellee Stone Brewing submitted its trademark application for its STONE mark in 1996, which was registered two years later and was deemed incontestable in 2008. Almost a decade later, in 2017, the Defendant/Appellant Molson Coors conducted a design refresh for its KEYSTONE brand, which separated the terms "key" and "stone," putting them on separate lines and often accompanying its new design with the "Hunt the STONE" tagline. In response, Stone Brewing filed its complaint in 2018, alleging, inter alia, trademark infringe and dilution. At trial, Stone Brewing sought damages for past lost profits, future lost profits, and corrective advertising. The jury returned a verdict for Stone Brewing for $56 million in general damages, to which Molson Coors appealed.

Key Takeaways

The decision provides important guidance on several key aspects of trademark law:

• Timing of Infringement Claims: The court clarified that the statute of limitations clock for trademark infringement begins when the allegedly infringing conduct starts, not when the defendant first uses similar branding elements. Here, Stone Brewing's claims were timely because they related to Molson Coors' 2017 "Own the Stone" campaign, not earlier uses of "Stone" terminology.
• Consumer Confusion Analysis: The court upheld the jury's finding of likely consumer confusion based on multiple factors:
• • Evidence of actual confusion among distributors and customers
  • Deliberate emphasis on the "Stone" portion of the Keystone brand in marketing
  • Direct competition in the "beer space" with similar distribution channels
  • Relatively low consumer care due to the products' inexpensive nature
• Claim of Prior Use: Despite Molson Coors' claim of prior use, substantial evidence supported a conclusion that Molson Coors did not approve the production packaging that used the term "Stone" before Stone Brewing's filing date for its application.
• Damages Calculations: The court made several significant holdings regarding trademark damages:
• • Future lost profits can be recovered based on expert testimony about recovery time after corrective advertising
  • There is no mandatory 25% cap on corrective advertising damages in the Ninth Circuit
  • Damages can extend to related brands under the same company affected by consumer confusion

Practical Implications

This decision has several important implications for trademark holders and potential defendants:

• Brand Protection: Companies should carefully monitor competitors' marketing campaigns and packaging changes, as these may trigger new infringement claims even if similar elements were previously used differently.
• Damages Strategy:
• • Defendants should request special verdicts requiring itemized damages breakdowns to preserve their ability to challenge specific categories
  • Presenting competing damages calculations is crucial, as focusing solely on liability can limit the ability to challenge award amounts
  • Expert testimony should control for industry-wide trends and market factors to strengthen damage models
• Evidence Preservation: The decision underscores the importance of preserving evidence of consumer confusion and maintaining survey evidence that specifically addresses trademark infringement rather than dilution. In addition, recording and preserving evidence of the creation, development, and use of a mark for use in commerce may be crucial in demonstrating prior use in subsequent litigation that may occur several years later.
• Laches Defense: Prior trademark disputes or cease-and-desist letters may not trigger the Laches clock if the current infringement claims arise from new marketing campaigns or rebranding efforts.

Looking Ahead

The decision strengthens protection for trademark holders by:

• Confirming the availability of future lost profits in trademark cases
• Rejecting artificial caps on corrective advertising damages
• Supporting the use of consumer confusion evidence even when it may overlap with dilution theories

Companies should review their trademark monitoring and enforcement strategies in light of this decision, particularly regarding:

• Tracking competitors' marketing campaigns and packaging changes
• Documenting instances of actual confusion
• Maintaining evidence to support damage calculations

Contact

For questions about how this opinion may affect your business or for assistance with IPRs, please contact Victor Johnson ([email protected]), James Tuck ([email protected]), or anyone from the Dentons US Intellectual Property & Technology Group.