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Tapped out: Court rules against brewery in trademark dispute
Imitation is the sincerest form of flattery. Or so goes the popular quote attributed to English cleric Charles Caleb Colton. A craft brewer was anything but flattered when a less highly regarded brand appeared to imitate its trademark in a design refresh, leading to an infringement lawsuit.
Breweries go head-to-head
Stone Brewing Co. is a San Diego-based craft brewery that has sold its Stone beers nationwide for more than 20 years. It registered the STONE mark in 1998.
Molson Coors is a multinational beer conglomerate. Its extensive portfolio of beers includes the domestic lager brand Keystone. It has always been sold as a sub-premium beer in cans with a primary KEYSTONE mark and imagery of the Rocky Mountains. In 2017, Molson began efforts to refresh Keystone’s image with an updated can and package design.
The new can design separated KEY and STONE onto separate lines, emphasizing STONE rather than KEYSTONE. Advertising campaigns started featuring the new can, often with slogans such as “Hunt the STONE” and “Own the STONE.” Before 2017, Molson never referred to Keystone as anything other than Keystone in marketing, packing or advertising and never broke up the product name.
In 2018, Stone sued Molson for trademark infringement. A jury found infringement and awarded Stone $56 million in damages. Molson appealed, arguing, among other things, that the trial court should have set aside the jury verdict on likelihood of consumer confusion.
The court hops in
The Ninth Circuit explained that the question of consumer confusion considers whether a reasonably prudent consumer is likely to be confused about the origin of the good or service bearing the mark. It went on to assess several of the so-called Sleekcraft factors (named for the case where they were first enumerated) that courts apply to determine whether a likelihood of confusion exists.
First, the court found that Stone provided evidence from which a jury could plausibly find actual confusion among distributors and customers who thought that Stone sold Keystone Light. The evidence included a survey of 501 beer consumers, which demonstrated a high level of confusion between the STONE products and advertising.
The appellate court also considered the similarity of the marks. It found that Molson expressly de-emphasized KEYSTONE and instead highlighted STONE in its 2017 product refresh and noted that similarities in marks weigh more heavily in the analysis than differences.
Another factor is the proximity of the goods, or the degree to which they compete. The court pointed out that both brands:
- Compete in the “beer space,”
- Are sold in the same grocery store aisle, and
- Have registered marks under the same category of “beers and ales.”
The marketing and distribution channels also supported a finding of consumer confusion. The brands use the same channels and are sold at the same types of restaurants and stores.
Finally, the appellate court evaluated the degree of care likely to be exercised by purchasers. The lower the level of customer care, the greater the likelihood of confusion. Beer, the court said, is a relatively inexpensive product. And customer care for inexpensive items generally is quite low.
Time to pay the tab
In light of the various factors, the Ninth Circuit concluded that a reasonable jury could find the 2017 product refresh was likely to cause consumer confusion. It affirmed the jury’s verdict and damage award.
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