Beer Marketer's Insights - Fed Judge Denies Attempts by Stone, MC to Amend $56-Mil Verdict in Keystone Suit

Barring further attempts to stretch the 5.5-yr dispute on any longer, the jury's $56-mil verdict in favor of Stone Brewing in its trademark infringement suit with Molson Coors over Keystone Light rebranding will stand. Both breweries sought post-trial adjustments, including possibility of a new trial altogether. But same district ct judge in Southern CA who oversaw the whole ordeal determined enough was enough, denying both cos motions today after a hearing early this mo. MC argued that judge should either overturn the jury's verdict or grant a new trial, judge reviewed in order issued today. On the one hand, co claimed that evidence did not support the jury's conclusion. On the other, alleged misconduct related to Stone's handling of evidence should be enough for a do over, judge explained. A key piece of that misconduct involves a "failure to disclose" something the ct repeatedly redacts. Context clues suggest it's something to do with Sapporo's acquisition of Stone, announced about 3 mos after the verdict last yr. Meanwhile, Stone submitted what it called a "defensive" motion, asking judge to review whether or not MC's infringement was "willful." Recall, jury determined it wasn't, limiting damages. So while MC looked for ways to reverse the ruling against it, Stone tried to expand the jury's award. Neither succeeded.Just Cuz Judge Sees Suit Differently, Doesn't Mean MC Gets a New Trial Turns out, in prior rulings, judge didn't think the rebranded Keystone packaging would have confused a "prudent consumer." MC "seized on" that lingo to argue Stone had no evidence of "actual consumer confusion" and that co showed dilution, not infringement, judge wrote today. But after reviewing the dispute's record over again, judge determined they "cannot say the verdict was unreasonable or against the 'great weight' of the evidence."Judge also acknowledges that they "agreed" with MC that the $216.15 mil in total damages Stone requested was "fantasy land." That included $32.7 mil in lost past profits, $141.4 mil in lost future profits and $41.8 mil in corrective advertising. MC attempted to argue that these numbers were either improperly calculated or too high compared to similar judgments in other cases. But ct "cannot fairly say" that the $56 mil the jury awarded Stone, "roughly 25% of the damages" co requested, "is 'grossly excessive' or 'monstrous.'" Judge doesn't find the amount to be an "extreme outlier," either.Would [REDACTED] Info Have Undermined Stone's Claims? MC's basis for seeking a new trial involved 2 alleged errors with evidence: 1) the switch to a different expert witness and 2) Stone's "failure to disclose the [REDACTED]," ruling explains. MC "argues that the evidence of [REDACTED] would have undermined key aspects of Stone's case, including that Stone's damages are based on consumer's negative associations between Stone and a 'big beer company.'" Could this be reference to Sapporo's offer to acquire Stone? Deal closed in early Sep last yr, about 6 mos after trial. Whatever wasn't disclosed, MC thought "it could have used the [REDACTED] to undermine Stone's arguments."Ultimately, ct determined that it "does not warrant a new trial. Although the Court feels Stone engaged in a certain level of gamesmanship through this concealment, the Court also finds the offer does not directly affect the issues presented at trial in the way" MC sez (our emphasis). Ruling references testimony by Stone co-founder Greg Koch placing the undisclosed event "at the end of the infringement period." In judge's view, the event may have "undercut some of Plaintiff's thematic arguments" (ct's emphasis) and perhaps Stone's arguments about future damages, "it is not relevant to the issue of infringement itself."Ct Won't Revisit Willfulness at Bench Trial, Either Stone's attempt to boost the damages awarded by having judge revisit issue of willfulness was equally unsuccessful. Judge unpersuaded by the co's arguments about how MC used attorney-client privilege during trial, commenting that the co's motion didn't meet requirements of specific rules for new trials, anyway. Indeed, ruling seems to take issue with somewhat contradictory arguments by Stone's atty, who asked judge to revisit the jury's decision but also said the "jury did a very good job." That redacted event makes an appearance here, too, when judge notes that Stone waived the opportunity to postpone the trial to do additional discovery on a new proposed witness for MC. As MC "cynically points out&mdash;Stone's strategic choice to decline the Court's offered remedy was likely due to a need to complete trial before [REDACTED] were finalized," per ruling. So again, judge denied the motion.Stone "Pleased" on "Final Word" from Dist Ct; MC Disagrees, Respects Decision, Considering Appeal A spokesperson for Stone's legal team at Braun Hagey & Borden commented that co "is pleased" ct upheld the verdict and confirmed that MC's "use of the STONE trademark was 'nearly identical' to Stone's." They went on to cite judge's determination that MC can't "downplay the effect of de-emphasizing the full 'Keystone' mark in favor of emphasizing a 'single, heroic element,'" or "STONE." A Stone spokesperson echoed the sentiment, noted that interest on the $56-mil verdict "continues to accrue," now topping $58 mil, and added that "Stone continues to lead through its brand and reputation for quality beer. There is and can be only one 'STONE' in beer, and Molson Coors should never have attempted to infringe the STONE trademark. With this final word from the District Court, we hope that everyone can put an end to the legal battles and return to making beer under their own name."But is this the end? MC's sr director of corporate affairs Rachel Dickens commented: "We disagree with the Court's decision, although we respect it and the process that brought us here. The Court previously said it agrees with our position that 'a reasonable jury could not have concluded that a reasonably prudent consumer would be confused by refreshed Keystone Light packaging.' We are evaluating our options including an appeal."

Fed Judge Denies Attempts by Stone, MC to Amend $56-Mil Verdict in Keystone Suit

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