The Key to Stone’s Trademark Claim
The Ninth Circuit Court of Appeals recently upheld a $56 million jury verdict against MolsonCoors (formerly named MillerCoors) in a trademark infringement suit brought by Stone Brewing over MolsonCoors’ use of “stone” on packaging and in advertising for its KEYSTONE brand of beer.
The appellate decision is the culmination of at least 15 years of trouble brewing between the companies and raises the question of how aggressive a brand owner must be in protecting its trademark rights. MolsonCoors argued that Stone waited too long to sue and lulled it into believing Stone in fact wouldn’t sue. In legalese, this is known as laches.
To understand this argument, we take a quick sip of the history of the dispute:
- On April 4, 1996, Stone Brewing applied to register the mark STONE for “beers and ales.” A registration issued on June 23, 1998, alleging first use in commerce January 6, 1998.
- In 2007, MillerCoors applied to register STONES for “beer,” including a specimen of use depicting a package of KEYSTONE LIGHT along with the tagline “’30 STONES.” The USPTO issued an office action refusing registration based on Stone Brewing’s STONE registration and other grounds. MillerCoors did not respond to the office action, and the STONES application abandoned in June 2008.
- In March 2010, MillerCoors filed an application for HOLD MY STONES for “beer” and “hats and t-shirts.” Later in 2010, Stone Brewing sent MillerCoors a cease and desist letter objecting to both the HOLD MY STONES trademark application and the use of STONE and STONES.
- In 2017, MolsonCoors introduced a new can design that split KEYSTONE into two lines, such that only the word STONE is visible when looking at it from a side angle.
- For Stone Brewing, the new can was too heavy a pour. In 2018, it filed a complaint for trademark infringement.
- In 2022, following a three-week trial, a jury awarded Stone Brewing $56 million in damages.
On appeal to the Ninth Circuit, the parties focused on the 2017 brand refresh. MolsonCoors argued that the company had been using the term “stone” well before 2017 and therefore believed Stone wouldn’t sue after receipt of the 2010 letter. Stone argued that the 2017 new usage marked a turning point.
Apparently, MolsonCoors was overly “hop”-timistic. In its decision, the Ninth Circuit held that the four-year clock for laches under California law began to run with the 2017 ad campaign. Before that, the decision stated, MolsonCoors “never broke up the product name ‘Keystone.’” The 2017 can marked a different use from older examples like “Hold my Stones” and “30 Stones.”
The court also upheld the district court’s rulings on likelihood of confusion and the amount of damages.
A company must enforce its trademark rights in order to maintain them. In this case, the change from displaying KEYSTONE in one line on the product to two lines marked a “pint” of departure from MolsonCoors’ previous use of “stone.”
There is a legal term for this: progressive encroachment. At some point, a potential infringer’s use can go from milling around the edge of legal use to bellying up to the infringement bar. This can lead to difficult judgment calls for the brand owner on when and how aggressively to enforce its rights.
If you don’t want to pour one out for lost trademark rights, an attorney can help you find the right balance.
Cheers!