NOT FOR PUBLICATION FILED

UNITED STATES COURT OF APPEALS DEC 30 2024

MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS

FOR THE NINTH CIRCUIT

STONE BREWING CO., LLC, No. 23-3142 D.C. No. Plaintiff - Appellee, 3:18-cv-00331-BEN-MDD v. MEMORANDUM*

MOLSON COORS BEVERAGE

COMPANY USA LLC,

Defendant - Appellant.

Appeal from the United States District Court for the Southern District of California Roger T. Benitez, District Judge, Presiding

Argued and Submitted November 19, 2024 San Jose, California

Before: GRABER, FRIEDLAND, and BUMATAY, Circuit Judges.

Molson Coors Beverage Company appeals a variety of rulings from the

district court after a jury awarded $56 million to Stone Brewing Company for

trademark violation under the Lanham Act. We have jurisdiction under 28 U.S.C

§ 1291 and affirm.

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. 1. Molson Coors first appeals the district court’s determination that laches

does not bar Stone Brewing’s Lanham Act claims. The duration of the laches clock

here is four years. See Tillamook Country Smoker, Inc. v. Tillamook Cnty. Creamery

Ass’n, 465 F.3d 1102, 1108 (9th Cir. 2006) (holding that the duration of the laches

clock is determined by looking to the statute of limitations period for the “most

closely analogous action under state law” (quotation marks omitted)); Pinkette

Clothing, Inc. v. Cosm. Warriors Ltd., 894 F.3d 1015, 1025 (9th Cir. 2018)

(“California [has a] four-year statute of limitations for trademark infringement

actions.”).

The laches clock began running in 2017 when Molson Coors launched its

“Own the Stone” marketing campaign. See Evergreen Safety Council v. RSA

Network Inc., 697 F.3d 1221, 1226 (9th Cir. 2012) (The laches clock begins when

the plaintiff “knew (or should have known) of the allegedly infringing conduct.”).

Pre-2017 usage is not the basis for any part of Stone Brewing’s claims. See Jarrow

Formulas, Inc. v. Nutrition Now, Inc., 304 F.3d 829, 837 (9th Cir. 2002) (holding

that laches is “triggered if any part of the claimed wrongful conduct occurred beyond

the limitations period”). Rather, all of Stone Brewing’s claims relate to the 2017

“Own the Stone” campaign. Pre-2017, Molson Coors never referred to Keystone as

“anything other than Keystone in packaging[,] marketing[,] or advertising

materials,” never broke up the product name “Keystone,” and used the term “Stones”

2 23-3142 just to refer to the number of beers in the case (“30 stones”) or, in the plural sense,

as a catch phrase (for example, “Hold my Stones”). Stone Brewing brought this suit

within the four-year statute of limitations.

2. We review the denial of judgment as a matter of law de novo, Fifty-Six

Hope Rd. Music v. A.V.E.L.A., Inc., 778 F.3d 1059, 1068 (9th Cir. 2015), and any

factual findings and determinations on the likelihood of confusion for clear error,

Stone Creek, Inc. v. Omnia Italian Design, Inc., 875 F.3d 426, 431 (9th Cir. 2017),

abrogated in part on other grounds as recognized by Harbor Breeze Corp. v.

Newport Landing Sportfishing, Inc., 28 F.4th 35, 38 (9th Cir. 2022). “A jury’s

verdict must be upheld if it is supported by substantial evidence, which is evidence

adequate to support the jury’s conclusion, even if it is also possible to draw a

contrary conclusion.” DSPT Int’l, Inc. v. Nahum, 624 F.3d 1213, 1218 (9th Cir.

2010) (citation and internal quotation marks omitted). To win on its Lanham Act

trademark infringement claim, Stone Brewing had to prove “(1) that it ha[d] a

protectible ownership interest in the mark; and (2) that [Molson Coors’s] use of the

mark [was] likely to cause consumer confusion.” Network Automation, Inc. v.

Advanced Sys. Concepts, Inc., 638 F.3d 1137, 1144 (9th Cir. 2011) (quotation marks

omitted).

The district court did not err in refusing to set aside the jury verdict on the

ground that Molson Coors had a superior interest in the “Stone” mark. Stone

3 23-3142 Brewing applied to register the “Stone” trademark on April 4, 1996, and, despite

Molson Coors’s claim of prior use, substantial evidence supported a conclusion that

Molson Coors did not approve the production of packaging that used “Stone” before

that date.

The district court also did not err in refusing to set aside the jury verdict on

likelihood of confusion. The question of consumer confusion “asks whether a

reasonably prudent marketplace consumer is likely to be confused as to the origin of

the good or service bearing one of the marks.” Stone Creek, 875 F.3d at 431

(quotation marks omitted). We consider several factors to assess confusion. AMF

Inc. v. Sleekcraft Boats, 599 F.2d 341, 348–49 (9th Cir. 1979).

First, Stone Brewing provided some evidence from which a jury could

plausibly conclude there was “actual confusion” by distributors and customers who

thought that Keystone Light was sold by Stone Brewing. Stone Brewing also

presented survey evidence purportedly demonstrating consumer confusion based on

images that appeared on Molson Coors’ branding and packaging. The jury was free

to consider that information.

Second, as to similarity of the marks, Molson Coors expressly de-emphasized

“Keystone” and instead highlighted “Stone” in its 2017 product refresh. See

Brookfield Commc’ns, Inc. v. W. Coast Ent. Corp., 174 F.3d 1036, 1054 (9th Cir.

1999) (holding that similarities between marks are “weighed more heavily than

4 23-3142 differences”).

Third, as to proximity of the goods, the brands compete in the “beer space,”

are sold in the same aisle of grocery stores, and have registered marks (or in Molson

Coors’s case, attempted to register marks) under the same category of “beers and

ales.”

Fourth, the brands use the same marketing and distribution channels. And

both products are sold at the same restaurants and grocery stores, often in the same

aisle.

Fifth, “[l]ow consumer care increases the likelihood of confusion,” and more

expensive products generate greater care. Network Automation, 638 F.3d at 1152

(alteration and citation omitted). Beer is a relatively inexpensive product. And

although the per-unit price of Stone IPA and Keystone Light differ, their prices are,

overall, similar.

Reviewing all the factors, a reasonable jury could find that Molson Coors’s

2017 product refresh of Keystone Light was likely to cause consumer confusion.

3. Molson Coors also challenges several evidentiary rulings and the district

court’s denial of Molson Coors’s motion for a new trial. Denial of a motion for a

new trial is reviewed for abuse of discretion. Kode v. Carlson, 596 F.3d 608, 611

(9th Cir. 2010) (per curiam). We review for abuse of discretion the district court’s

decision to admit expert testimony. United States v. Valencia-Lopez, 971 F.3d 891,

5 23-3142 897 (9th Cir. 2020). The district court did not abuse its discretion.

Molson Coors first alleges that there must be a new trial because the district

court allowed survey evidence into the record that featured “altered” images of

Keystone Light showing the word “Stone” by itself. But the packaging in which the

cans were sold did feature the word “Stone” on a can in relative isolation. And cases

of Keystone Light, as well as several advertisements released by Molson Coors,

showed images of the can as the survey described.

Molson Coors next argues that the studies offered as evidence by Stone

Brewing supported a theory of trademark dilution rather than trademark

infringement. But reverse confusion, which supports a theory of trademark

infringement, occurs when a consumer “mistakenly thinks that the senior user is the

same as or is affiliated with the junior user.” Ironhawk Techs., Inc. v. Dropbox, Inc.,

2 F.4th 1150, 1160 (9th Cir. 2021). Stone Brewing consistently argued that

consumers were confused as to the origin of Keystone Light and that the “negative

attributes of Keystone were transferred to Stone from this confusion of source.”

Finally, Molson Coors argues that the district court erred in allowing Dr.

Palmatier to present his “brain node” theory on consumer habits, which came from

his peer-reviewed textbook. But “publication in peer reviewed literature, and

general acceptance” favors admission of testimony under Federal Rule of Evidence

702. Primiano v. Cook, 598 F.3d 558, 564 (9th Cir. 2010). The court properly

6 23-3142 admitted Dr. Palmatier’s testimony.

4. Finally, Molson Coors challenges the damages awarded by the jury. We

review for abuse of discretion the district court’s denial of remittitur. Oracle Corp.

v. SAP AG, 765 F.3d 1081, 1087 (9th Cir. 2014). “[A] jury’s award of damages is

entitled to great deference.” In re First All. Mortg. Co., 471 F.3d 977, 1001 (9th Cir.

2006). “In reviewing a jury’s damages award, we must uphold the jury’s finding of

the amount of damages unless the amount is grossly excessive or monstrous, clearly

not supported by the evidence, or only based on speculation or guesswork.” L.A.

Mem’l Coliseum Comm’n v. Nat’l Football League, 791 F.2d 1356, 1360 (9th Cir.

1986) (quotation marks omitted). Once a district court has “upheld a jury award in

denying a motion for a new trial, such a ruling is ‘virtually unassailable.’” Skydive

Ariz., Inc. v. Quattrocchi, 673 F.3d 1105, 1113 (9th Cir. 2012) (quoting Kode, 596

F.3d at 612).

Stone Brewing sought damages in three categories: $32.7 million for past lost

profits, $141.4 million for future lost profits, and $41.8 million for corrective

advertising. The jury returned a verdict for Stone Brewing of $56 million in general

damages—roughly one quarter of requested damages—without indicating what

portion of the award came from which category.

Molson Coors argues that remittitur is appropriate because Stone Brewing’s

“Arrogant Bastard Ale” is not sold under the Stone brand name. But evidence in the

7 23-3142 record indicated that consumer confusion about the Stone brand impacted Stone

Brewing’s other brands as well. Further, Molson Coors’s argument that Stone

Brewing cannot recover past lost profits as a matter of law is not compelling for the

same reasons given with respect to the dilution versus infringement argument above.

Next, Molson Coors argues that Stone Brewing cannot recover future lost profits

because no other court has awarded speculative future lost profits, but, in Oracle,

we upheld a damages calculation that considered a lost future “ongoing stream of

revenue from [the infringed upon company’s] former customers.” 765 F.3d at 1094.

Similarly here, Stone Brewing provided expert testimony that estimated how long it

would take Stone Brewing to recover its sales after corrective advertising. The jury

could reasonably rely on the expert’s calculation to determine that Stone Brewing’s

sales would not recover immediately. Finally, Molson Coors argues that a 25

percent cap must be applied to the corrective advertising damages, but we have never

adopted a 25 percent cap. See Adray v. Adry-Mart, Inc., 76 F.3d 984, 989 n.2 (9th

Cir. 1995) (acknowledging the 25 percent cap but declining to adopt it).

AFFIRMED.

8 23-3142