SAN DIEGO (CN) — A David-versus-Goliath beer industry fight will go to trial after a federal judge ruled a jury must decide whether MillerCoors violated San Diego brewer Stone Brewing’s trademark during a marketing campaign makeover.
In a 41-page order dated March 27 and made available Monday, U.S. District Judge Roger Benitez found it was a “close call” in deciding whether to grant Stone Brewing summary judgment on its trademark infringement claim against the Keystone beer maker. He ultimately found it was a decision for a jury.
“Evaluating all the factors and the evidence provided by the parties, the court cannot find plaintiff has, as a matter of law, demonstrated a likelihood of consumer confusion, although it is a close call,” Benitez wrote.
The judge found a triable issue remains on what he called the “critical question” of whether there is actual consumer confusion by beer drinkers who think they are purchasing Stone Brewing’s craft beverages when picking up a pack of MillerCoors’ rebranded Keystone beer.
Stone Brewing sued MillerCoors – the U.S. subsidiary of multinational beer conglomerate Molson Coors – in 2018, claiming sales of its craft brews dropped after MillerCoors rebranded its Keystone sub-premium line of beers in 2017.
The “refreshed” beer can design separated “Key” and “Stone” onto separate lines, emphasizing the word “Stone.”
The Keystone Light beer went from the worst to best-selling beer in the line, while at the same time Stone Brewing experienced a discernable drop in its sales due to confusion over what consumers were purchasing, according to its lawsuit.
Stone has sold its craft beers for over two decades, registering its trademark in 1998.
The mark was recognized by the U.S. Patent Trade Office as “incontestable,” in 2008, a designation that’s made to recognize the continuous use of the brand and that the trademark was not challenged within five years of its registration.
While Benitez previously found Stone Brewing’s trademark was “conceptionally and commercially strong and recognizable,” new evidence by MillerCoors prompted the judge to find a jury must decide the matter.
MillerCoors argued Stone Brewing’s trademark is weak because at least 10 other craft breweries use the word “Stone” in their name. The company also said 53% of beer drinkers and nearly a quarter of craft beer drinkers had never heard of Stone Brewing.
“While defendant has provided some evidence that the word ‘Stone’ has been used in craft brewery names, as well as it being an old-style beer brewing technique, the court is unable to see a commonly understood connection between the mark and the product,” Benitez wrote.
“A finder of fact could reasonably conclude that plaintiff’s marks are commercially weak,” the judge added.
Benitez also found the packaging of the two beers are dissimilar, even though they are both labeled with the word “Stone.”
Stone Brewing’s beers are labeled with the word “Stone” along with the name or specific type of beer and its “signature gargoyle,” while Keystone’s beer is labeled on bright blue packages that include the Coors Brewing Company name logo and Keystone’s “signature mountains,” Benitez wrote.
The two beers are also sold in separate areas of grocery and liquor stores, Benitez noted, pointing out Stone Brewing’s beers are found in the refrigerated beer and wine section next to other craft brew competitors while MillerCoors beers are found on lower refrigerated shelfs of the cooler next to other “economy class beers.”
But even though the marks are dissimilar, Benitez found there’s genuine dispute as to how the trademarks appear in marketplace and a jury must answer the question.
Benitez did grant summary judgment to Stone Brewing on MillerCoors’ claim the lawsuit was untimely. He found because Stone Brewing is challenging MillerCoors refreshed packaging and advertising campaign in 2017, and not its use of “Stone” as early as 1991, the case is timely.
By the same thread, Benitez denied MillerCoors’ motion for summary judgment as to its priority right to use “Stone” and “Stones” in its packaging and advertising, noting evidence of a 14-year gap in the company’s use of “Stone” in its packaging proves it was not in continuous use.
Stone Brewing CEO Dominic Engels said in a statement it “was a good day for independent craft beer and our employees.”
“The court’s order allows the jury to rectify years of injury to Stone’s name and business. All of us at Stone are hopeful that #truestonevskeystone will have a meaningful impact on Stone and on craft beer as a whole,” Engels said.
Stone Brewing seeks more than $1 billion in the dispute, according to the company’s statement.
Molson Coors said in a statement they’ve been using “Stone” as a moniker since before Stone Brewing was in business.
“These two products look nothing alike, as the judge noted, and are competing for an entirely different consumer. There is no credible evidence that consumers are confused and we’re confident we will prevail when the case is decided by a judge and jury,” the company stated.