Court Scores one for Craft Beer, finds that MillerCoors Infringes on STONE® Brand

Discussion in 'Beer News & Releases' started by Jason, Mar 28, 2019.

  1. Jason

    Jason Founder (8,170) Aug 23, 1996 Massachusetts
    Staff

    Damages and Injunctive Relief to go forward to trial

    ESCONDIDO, CA (March 27, 2019) – Score one for true independent craft beer today as the #TrueStonevsKeystone lawsuit continues. On Tuesday, March 26, the Court issued its order regarding Stone’s preliminary injunction motion against one of the world’s largest beer conglomerates, MillerCoors. It confirmed “Stone’s mark to be commercially strong and recognizable,” deserving of “strong protection.”

    Miller Coors is infringing on the brewery’s trademark rights.

    [​IMG]

    What does this positive ruling mean for Stone and craft beer? It means that MillerCoors’ Keystone cans are likely to confuse consumers, infringe on Stone’s trademark, and will likely be forced to undergo a rebrand after the case goes to trial. In short, Stone is that much closer to protecting its good name, reputation and brand integrity.

    Here’s some legal jargon to spice it up:

    “the Court agrees [with Stone], especially considering the marks incontestability, STONE® is entitled to the strong protection afforded to suggestive marks. Since Stone and Miller both produce a beer which is distributed nationally, a consumer is likely to encounter both within close proximity of the other, making it is reasonable to consider Miller a direct competitor of Stone … Taking all the factors into account, the Court finds that Stone’s trademark infringement claim against Miller is moderately strong.”

    While the Court did not order a preliminary injunction, it found that the issue was one for trial, where Stone looks forward to presenting evidence of the significant impact that MillerCoors’ campaign has had on the craft brewery – and the massive sales which Keystone has accumulated since reviving itself using Stone’s trademark.

    “This is a very big deal,” stated Greg Koch, Stone Brewing executive chairman & co-founder. “The Court’s order confirms what we knew: that MillerCoors should be ashamed of what they have been doing. All along this has been a clear-cut infringement case, and now we can focus our resources on proving the significant damages done to the good name of Stone Brewing.” He concluded: “To any believer in independent, craft beer, today is a good day. All we ask is that you keep #TrueStonevsKeystone on your mind, and true Stone in your fridge.”

    CEO Dominic Engels added: “We are pleased that the Court recognized the validity of Stone’s infringement claims. MillerCoors has made hundreds of millions of dollars from rebranding Keystone in a way that infringes on our trademark. It also has hurt Stone and our brand. We look forward to presenting this evidence to the Court at trial.” He added: “We entered this litigation to obtain permanent protection against future misuse of our brand. The Court’s holding is a win for Stone and we look forward to presenting these issues to a jury in San Diego.”

    Stone filed suit against MillerCoors in February 2018 after MillerCoors tried to rebrand its Colorado Rockies-themed “Keystone” beer as “STONE.” The company had no choice but to combat MillerCoors’ aggressive marketing moves, which abandon Keystone’s own heritage by falsely associating with the one true STONE®. Stone announced the bold move by video last year and continues to wave a flag of independence, vowing never to sell out to Big Beer.

    Stone Brewing is represented in the lawsuit by Noah Hagey, Jeff Theodore and Toby Rowe of San Francisco litigation boutique BraunHagey & Borden LLP.

    [​IMG]


    ABOUT STONE BREWING
    Founded by Greg Koch and Steve Wagner in 1996, the groundbreaking San Diego-based Stone Brewing is the 9th largest craft brewer in the United States. Recognized as an award-winning industry leader, Stone has been listed on the Inc. 500 | 5000 Fastest Growing Private Companies list 12 times and has been called the “All-time Top Brewery on Planet Earth” by BeerAdvocate magazine twice. The multifaceted company was the first American craft brewer to build, own and operate its own brewery in Europe (Berlin, Germany), and also opened a production brewery in Richmond, Virginia in 2016. In 2018, Stone opened Stone Brewing – Napa in the heart of California’s wine country and a tap room in Shanghai. Known for its bold, flavorful and largely hop-centric beers, Stone has earned a reputation for brewing outstanding, unique beers while maintaining an unwavering commitment to sustainability, business ethics, philanthropy and the art of brewing… and pledging to never, ever, sell out to the man. For more information on Stone Brewing, please visit stonebrewing.com or the company’s social media sites: Facebook, Instagramand Twitter.
     
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  2. Bitterbill

    Bitterbill Poo-Bah (6,447) Sep 14, 2002 Wyoming
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    Yay!!
     
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  3. bbtkd

    bbtkd Poo-Bah (2,332) Sep 20, 2015 South Dakota
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    I figured Stone would prevail. Not over yet, but good progress.
     
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  4. CaptainHate

    CaptainHate Zealot (557) Apr 22, 2006 Ohio
    Society

    Good news.
     
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  5. Amendm

    Amendm Devotee (457) Jun 7, 2018 Rhode Island
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    Cheers to the little guy, even though Stone is a big guy.
     
  6. Mindcrime1000

    Mindcrime1000 Defender (663) Apr 30, 2016 South Dakota
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    I personally hope that Stone wins this, but after reading the Court's order, Stone shouldn't take a victory lap yet, as the Court's overall "tone" and ruling was a mixed bag.

    On the one hand, the Court did recognize that Stone had a mark worthy of trademark protection (something that was already true by virtue of the fact that Stone has had a registration with the USPTO for many years, so long that the registration is "incontestable"), which is an essential element of Stone's case.

    However, in applying the factors relevant to a Lanham Act (federal trademark) claim, the Court specifically noted that (1) the appearance of the "Coors" name on Keystone cans makes it less likely that consumers will be confused into believing that Stone beers and Keystone beer emanate from the same source; and (2) the differences in packaging and price of the respective products makes it less likely that consumers will make that mistake as well. (Parenthetically--how many people who frequent this site, or frequently purchase Stone's products are really going to believe that Keystone--even with its emphasis on STONE on the can--is a Stone product?) The Court also noted that Stone had failed to provide any convincing evidence of actual confusion by consumers, which isn't fatal, but isn't helpful either.

    The Court also appeared to find MillerCoors' consumer survey evidence more compelling than Stone's.

    Finally, the Court noted that Stone had failed to show irreparable harm.

    What many may not know is that MillerCoors has a counterclaim against Stone alleging that its use of "Keystone" predated Stone's use of "Stone," such that Stone should be the one found to have infringed. Stone asked the Court to dismiss this claim, and the Court, in its ruling today, specifically declined to do so. If MillerCoors wins on this "priority" type of claim, Stone will lose the war (although it has somewhat of an upper hand right now because of its registration).

    The good news for Stone--The Court has affirmed that Stone has a fighting chance. The bad news--the Court has stated that MillerCoors has one too.
     
  7. LifesAnesthesia

    LifesAnesthesia Defender (687) Dec 17, 2014 Virginia
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    Hell yeah Stone!
     
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  8. bbtkd

    bbtkd Poo-Bah (2,332) Sep 20, 2015 South Dakota
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    Stone ought to come out with a beer called "Key" :stuck_out_tongue_winking_eye:
     
  9. islay

    islay Aspirant (243) Jan 6, 2008 Minnesota

    I would prefer if this case and injunction weren't presented in such a biased manner. The relative sizes and affiliations of the parties involved are irrelevant to the legal principles and shouldn't impact anyone's opinion on the merits.
     
  10. bbtkd

    bbtkd Poo-Bah (2,332) Sep 20, 2015 South Dakota
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    But counselor, we're not judge or jury, we are pro-craft.
     
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  11. Mindcrime1000

    Mindcrime1000 Defender (663) Apr 30, 2016 South Dakota
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    I've only read the original pleadings and the judge's decision today but this case strikes me as one of those that could go either way depending on how the facts come out at a full blown trial. The legal principles are pretty settled. Those are the ones where "David and goliath" stuff can come into play, whether it should or not because judges and juries have biases. Plus who wants to root for Darth Vader?
     
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  12. Retroman40

    Retroman40 Zealot (509) Dec 7, 2013 Florida
    Society

    As far as confusion in the marketplace, I have to believe that if a Venn Diagram was drawn where A = People interested in real Stone beers and B = People who buy things like Keystone that the Intersection A ∩ B would be a mighty small area. If anything I could see some confused intoxicated person think Stone was Keystone. Not that my opinion matters too much but while I certainly think there is infringement I also think that it really has had minimal effect on the sales of either product.
     
  13. AlcahueteJ

    AlcahueteJ Savant (936) Dec 4, 2004 Massachusetts

    And this is the part that confuses me. Specifically, how is Stone going to prove this campaign has hurt their sales? If I'm MillerCoors, I hammer away at the fact that craft breweries of Stone's size have been losing sales in recent years due to the dramatic increase in local craft breweries. For example, Keystone's campaign has nothing to do with the likes of Sierra Nevada slipping in sales.


    Another point I may make as a consumer. These two products are not even in the same place at a liquor store. A Keystone Light drinker would have to actively search through the hundreds of craft brewery labels at the store today and somehow "mistakenly" think that was Keystone Light (see the image below).

    Vice versa, me the craft beer drinker would have to wander over to the macro section and think, "Oh wow weird, Stone must have a light lager now."

    Admittedly the latter IS possible I suppose, because craft breweries are starting to make light lagers, and Nightshift specifically is trying to place them next to the big boys in the fridge at stores.

    @Mindcrime1000 this is a jury trial correct? If so, ANYTHING could happen here. In which case, this is a VERY dangerous game for Stone to be playing in my opinion, as the worst case scenario for them is a major blow to their brand...

    I also don't think this image helps them. There's no way in hell I'm confusing those two cans at the liquor store.
     
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  14. Mindcrime1000

    Mindcrime1000 Defender (663) Apr 30, 2016 South Dakota
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    Re: "damages," this is a "proof" issue that plaintiffs in business litigation often face--how do I tie any lost sales to one thing, when the market is a multiple-variable creature? There are damages experts who make hundreds of dollars an hour testifying about this stuff.

    Re: "confusion," you've actually hit on one of the main components of the "test" that applies to a trademark infringement case--is the average consumer going to be confused under normal sale conditions

    Re: "Jury," mostly, yes, it's a jury trial. The jury decides whether there is liability, i.e., whether there is a likelihood of confusion, and also decides whether to award damages and in what amount. However, the judge ultimately makes the call on whether an injunction is going to issue requiring MillerCoors to change the way it presents the "Keystone" name so that "STONE" isn't the most prominent part. In denying Stone's motion for a preliminary injunction, the Court has already sent a "warning shot" over Stone's bow that the evidence it has put together so far isn't likely to carry the day on that point. IOW Stone has some work to do.
     
  15. drtth

    drtth Poo-Bah (3,785) Nov 25, 2007 Pennsylvania

    Curious if this "average consumer" is the average beer drinker or the average fan of Stone beers?
     
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  16. MNAle

    MNAle Meyvn (1,403) Sep 6, 2011 Minnesota
    Society

    An educated consumer is not the test, AFAIK. Average consumer of beer is the standard (I think).
     
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  17. Mindcrime1000

    Mindcrime1000 Defender (663) Apr 30, 2016 South Dakota
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    One of the "factors" of the "test" is the "degree of care likely to be exercised by the purchaser" (the Court mentioned this in its opinion). In some cases, an accused infringer can argue that the particular nature of the goods narrows the class of potential purchasers into an "educated" or "informed" class, but historically, courts have relegated the vast majority of alcoholic beverages to the "low degree of care" class, because even pricier beers and wines aren't expensive enough to trigger this "higher" level. The Court decided that was the case here. Notably, it sounds like MillerCoors didn't really try to argue that Stone consumers were more "sophisticated," and Stone didn't really address the issue at all (probably because arguing its consumers aren't sophisticated--which is better for its legal position--is not good optics from a PR standpoint).

    So, long story short (and sorry for being pedantic), all "beer drinkers" are probably going to be collapsed into one group, unless MillerCoors tries to get fancy.
     
  18. HouseofWortship

    HouseofWortship Zealot (585) May 3, 2016 Illinois
    Trader

    Stone must adopt the same tactic and create a special beer called "Monkeystone Light" and only highlight the "keystone" portion on the can as well as the tagline "this special beer is made from recycled urine".
     
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  19. BayAreaJoe

    BayAreaJoe Crusader (734) Nov 23, 2017 California
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    Dang, so beer drinkers are basically uneducated and unsophisticated in the eyes of the law, wtf.
     
  20. NickTheGreat

    NickTheGreat Devotee (473) Oct 28, 2010 Iowa
    Trader

    I hadn't seen the Keystone can until this thread. I could see why somebody would think it's a new Stone offering.
     
  21. MNAle

    MNAle Meyvn (1,403) Sep 6, 2011 Minnesota
    Society

    Not exactly. The courts previously, and existing case law examples, are built around the idea that cost drives "degree of care."

    "Degree of Care Exercised By the Consumer
    The degree of care exercised by the consumer varies according to the purchase. Generally, a buyer making a very expensive purchase is more likely to be discriminating and is less likely to be easily confused as to similar marks. The reason for this higher degree of care is because the consumer buys expensive items less frequently. Therefore the courts assume that such purchasers are likely to be more discriminating and source-conscious when purchasing real estate services, insurance or other "high ticket" items. Under these circumstances, the courts require a more substantial showing of similarity to justify a claim of likelihood of confusion. The same is true for items that are purchased by "professional buyers." A professional buyer is a person who arrives at the purchasing point already knowledgeable about the goods (e.g., a pharmacist, physician, architects, builders, etc.) A professional buyer is less likely to be confused because of their superior knowledge as to purchasing decisions.


    An ordinary purchaser, particularly one that buys inexpensive items on impulse is the most likely to be confused by similar marks. This consumer, for example, may quickly scan the aisle of a supermarket and impulsively purchase a box of garbage bags without realizing that she has been confused as to the choice of brands. In this instance, a lesser degree of care has been exercised. Therefore, less similarity may be necessary to prove likelihood of confusion."


    -- https://www.nolo.com/legal-encyclop...ow-do-you-determine-trademark-infringing.html
     
  22. AZBeerDude72

    AZBeerDude72 Poo-Bah (1,516) Jun 10, 2016 Arizona
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    Good for Stone. I remember agreeing with them back when this popped and people said I was nuts and Stone would lose. :thinking_face:
     
  23. AZBeerDude72

    AZBeerDude72 Poo-Bah (1,516) Jun 10, 2016 Arizona
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    Not at all, I would think its more for the casual drinker who does not really pay attention to beer much or folks buying beer for others who don't drink and maybe purchase because they see the name. Stone was spot on here, it was a nothing more than an attempt to mislead, least from my view.
     
  24. oldbean

    oldbean Aspirant (299) Jun 30, 2005 Massachusetts

    I'm sure that was all very based in a detailed understanding the legal frameworks involved.

    They're pretty uneducated and unsophisticated in my eyes too, honestly.
     
    #24 oldbean, Mar 28, 2019
    Last edited: Mar 28, 2019
  25. AZBeerDude72

    AZBeerDude72 Poo-Bah (1,516) Jun 10, 2016 Arizona
    Society Trader

    It was actually based on opinion since it was a chat room thread not actually in court, but I am sure Stone and their lawyers did in fact address it within the legal framework of the law.
    Cheers
     
  26. eldoctorador

    eldoctorador Zealot (584) Dec 12, 2014 California

    Do you know what would be the practical consequences if MillerCoors wins the counterclaim?
     
  27. JackHorzempa

    JackHorzempa Poo-Bah (3,910) Dec 15, 2005 Pennsylvania
    Society

    Well, stayed tuned. There is no final "loser" (or "winner") yet.

    Cheers!

    Edit: Strike that above statement. The present day "winners" (and "winners" in the future) are the lawyers since they are getting paid!!
     
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  28. waltari

    waltari Initiate (64) Jan 28, 2016 Georgia

    The real winners are the lawyers on both side!
     
  29. AZBeerDude72

    AZBeerDude72 Poo-Bah (1,516) Jun 10, 2016 Arizona
    Society Trader

    Sadly that is how it always goes, they make out no matter the outcome. Will be interesting to see the final ruling.
     
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  30. JackHorzempa

    JackHorzempa Poo-Bah (3,910) Dec 15, 2005 Pennsylvania
    Society

    I am reminded of an old joke. A lawyer just set up shop in his hometown and business was very slow. Then one day another lawyer set up shop in that town and all of a sudden there was lots of business.:grimacing:

    Cheers!
     
  31. Mindcrime1000

    Mindcrime1000 Defender (663) Apr 30, 2016 South Dakota
    Society Trader

    Three of the four "counterclaims" are more in the nature of "please declare we don't infringe/we have the right to use 'STONE' with beer." The fourth counterclaim is much more aggressive--in that counterclaim MillerCoors is asking for "An Order declaring that MillerCoors has the exclusive right to use the mark STONE and STONES in connection with beer sold in the United States." (Quote from the Counterclaim's prayer for relief).

    If MillerCoors prevailed on that claim, it could, in theory, obtain an injunction against Stone's use of "Stone" in selling beer. So MillerCoors is seeing if Stone wants to play "chicken" on this one.

    FWIW I think it's entirely possible the Court denies that sort of relief to either party.
     
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  32. Claude-Irishman

    Claude-Irishman Zealot (591) Jun 4, 2015 New Jersey
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    Good preliminary ruling, major corporations think they can get away with everything(Unfortunately most of the time they do)-
     
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  33. MNAle

    MNAle Meyvn (1,403) Sep 6, 2011 Minnesota
    Society

    There is a principle in patent law that if you know your patent is being infringed and you do not defend it, you can't just wait until you can build up more damages and THEN defend it.

    Does the same principle apply in trademark law?

    If so, MillerCoors counterclaim of having the senior mark could be thrown out, even if it was technically valid.

    Further, the time to have objected to the "Stone" trademark would have been when the trademark application was filed, not 20 years later.

    This seems like more of a try by the huge company to cause the smaller company to spend more than they are willing or able to spend.
     
  34. Mindcrime1000

    Mindcrime1000 Defender (663) Apr 30, 2016 South Dakota
    Society Trader

    The principle you are referring to is "laches" which is often referred to as "sleeping on your rights." Incidentally, the Supreme Court recently (2017) threw out "laches" as a defense in patent-infringement lawsuits. http://www.ipwatchdog.com/2017/03/2...ches-no-defense-patent-infringement/id=79750/

    However, laches is still a defense in trademark infringement lawsuits, and you are correct that Stone has the ability to argue it with regard to MillerCoors "nuclear" counterclaim. However, the trial court judge denied Stone's motion to dismiss the counterclaim, finding that the laches issue would have to be resolved later.
     
  35. CHL

    CHL Aspirant (232) Mar 27, 2009 Illinois

    This is some incredible spin. Stone lost their motion for preliminary injunction--crucially the court found they do not have a likelihood of success on the merits.

    They also lost their motion to dismiss MillerCoors' counterclaims.

    They only won on points of law that nobody seriously thought they would lose (like the idea that Stone was a descriptive trademark because it describes steins or something).

    To be clear, I hope Stone wins, but this is some Baghdad Bob-strength PR here to spin a significant loss as a victory.
     
  36. Mindcrime1000

    Mindcrime1000 Defender (663) Apr 30, 2016 South Dakota
    Society Trader

    I agree, it's spin. The Court found there was a "moderate" chance of success on the merits, but found no irreparable harm to Stone was likely.
     
  37. CHL

    CHL Aspirant (232) Mar 27, 2009 Illinois

    Yes, you're right. I was thinking of the likelihood of confusion, where MillerCoors had the better survey and court credited it. Either way, this is miles away from the headline: "finds that MillerCoors Infringes on STONE® Brand."

    Like they block quote the one finding that went Stone's way, ignoring that the bottom line is at best mixed. And MillerCoors gets to proceed with discovery even on their crazy swing-for-the-fences counterclaim.
     
  38. VoxRationis

    VoxRationis Meyvn (1,446) Dec 11, 2016 New York
    Society Trader

    Seems like positive news. Obviously need to wait til the final decision is rendered before celebrating in earnest. Here's to wishing Stone Brewing the best of luck.
     
  39. AlcahueteJ

    AlcahueteJ Savant (936) Dec 4, 2004 Massachusetts

    I feel like the headline of this thread should just be, "Court decides this lawsuit can go to trial."
     
  40. jesskidden

    jesskidden Meyvn (1,445) Aug 10, 2005 New Jersey
    Society

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