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When you reach for a beer, are you ever confused about whether you’re holding a Stone craft beer or a mass-produced Keystone Lite? Probably not. But what if it was a keySTONE Lite? That’s the question before a San Diego-based Federal Court.
On Monday, February 12, San Diego County-based Stone Brewing filed a lawsuit against the giant brewing conglomerate known as Molson Coors Brewing Company and MillerCoors LLC. We’ll just call the parties “Stone” and “MillerCoors” to make it easy.
You can read Stone’s complaint, which initiated the lawsuit, by clicking on this link. I also recommend checking out this amusing video, titled “Stone Brewing Sues Big Beer,” in which Stone co-founder Greg Koch explains why they’re embarking on this lawsuit. Full disclosure: Koch and I have met a few times, although I haven’t seen or spoken with him in several years.
A trademark gives the owner the exclusive right to use a word, phrase, symbol, or combination thereof in connection with particular goods or services. There’s no question Stone Brewing is the owner of STONE as a trademark for beer. Here’s a link to their U.S. trademark registration.
It’s also undisputed that MillerCoors owns KEYSTONE as a trademark for beer. Here’s a link to their U.S. trademark registration. Of course, the word “Keystone” includes the word “Stone,” but, in Koch’s video, Stone Brewing claims that “Stone” “as a standalone word in the world of beer” belongs to them.
(One more piece of table-setting: Trademark lawyers typically express trademarks in all caps to distinguish them from regular words in a sentence.)
Stone is claiming MillerCoors violated Stone’s trademark rights by modifying their KEYSTONE brand to hide the “key” and emphasize the “stone.” Stone alleges, among other claims, these actions constitute trademark infringement.
Stone is asking the court to enjoin (prevent) MillerCoors from using the STONE trademark and is asking for the amount of profits MillerCoors has received from its unauthorized use of the STONE trademark plus triple the amount of actual economic damages suffered by Stone, along with attorneys’ fees.
However, Koch’s video includes what amounts to settlement terms: “you can end all of this right here and now by one simple move that reinforces your brand that you’ve built: put the ‘Key’ back in KEYSTONE.” This is common in the trademark world — most of the time, the plaintiff just wants the infringer to cease and desist.
The Complaint includes examples of MillerCoors’ rebrand, which launched in 2017. Here are a few images from Stone’s legal filing:
To be clear: all of those images are of MillerCoors’ products and advertising; no Stone Brewing products appear in the images shown above.
Is Stone likely to prevail in this lawsuit? I think they’re in a very strong position.
The core of a claim of trademark infringement is “likelihood of confusion.” Is a consumer likely to be confused between the two trademarks?
Of course, a hardcore fan of Stone Brewing or Keystone Light is not going to be confused. But courts don’t just consider the actions of a brand’s most dedicated customer. The real question is whether an average beer drinker who just wants to grab something tasty to drink after a hard day at work would be confused.
A trademark is inseparable from the goodwill the brand has earned over time. If you enjoyed a Stone beer at a party last year, that brand has accrued some goodwill. Maybe you’re not a beer drinker, but you have to stock up for a barbeque and you recall your friends mentioning that they liked Stone IPA — that’s goodwill. Or maybe you have great memories of shotgunning Keystones at a college party — that’s another type of goodwill, but it’s still goodwill nonetheless.
If you look at one of the rebranded Keystone cans in the store, you’ll see that the “Key” portion of the mark appears in smaller letters above the “Stone” — but you have to roll the can over to see it.
The law recognizes that consumers don’t always examine every label carefully, particularly when it comes to relatively inexpensive everyday purchases. Beer, even the more expensive craft beer produced by Stone, certainly falls into this category. And, in order to prevail on this claim, Stone doesn’t have to prove actual confusion — meaning, they don’t have to produce consumers who bought Keystone Lite on the mistaken belief that it was a Stone Brewing product. Evidence of actual confusion is helpful, but not required. Stone simply has to demonstrate likelihood of confusion.
Having practiced trademark law for fourteen years, this seems like an easy call to me. This is a clear-cut case of likelihood of confusion, and I don’t know how MillerCoors could hope to prevail. I predict MillerCoors will settle, that the settlement terms will be confidential, and that in the next year we’ll see the “Key” make its way back into KEYSTONE in a more prominent fashion.