News

Firm Secures Major Advertising Victory for The Coca-Cola Company

August 10, 2009

The Firm has secured a major victory for its client The Coca-Cola Company in a false advertising suit brought by arch rival PepsiCo.

Stokely-Van Camp, the PepsiCo unit that markets Gatorade Thirst Quencher, sued Coca-Cola in April 2009 over launch advertising for Powerade ION4, an improved version of Coca-Cola's competing sports drink. The ads stated that Powerade ION4 contains four electrolytes -- sodium, potassium, calcium and magnesium -- and that two of these (calcium and magnesium) are not included in Gatorade Thirst Quencher. The advertising further claimed that Powerade ION4 provides these electrolytes in the same ratio typically lost in sweat, and is "The Complete Sports Drink." PepsiCo sought a preliminary injunction against the entire ad campaign, including a recall of products with allegedly false labels.

After expedited discovery and a two-day evidentiary hearing, the court ruled that PepsiCo was entitled to no relief on any of its claims. In addition to finding that some of the issues were moot (because Coca-Cola had already stopped running certain ads pursuant to its original business plan), the court determined that PepsiCo had no likelihood of success on the merits and had failed to show any risk of irreparable injury from Coca-Cola's ads. In addition, the court ruled that PepsiCo's claims were barred by its own unclean hands. The court found that PepsiCo had made far more aggressive claims about the benefits of calcium and magnesium in sports drinks in its own prior advertising, and indeed had attempted -- but failed -- to patent a calcium- and magnesium-enhanced sports drink and to beat Coca-Cola to market with a reformulated version of Gatorade Thirst Quencher that provided these electrolytes.

The court specifically upheld the claims that Powerade ION4 is The Complete Sports Drink and that it contains four electrolytes in the same ratio typically lost in sweat, while "other sports drinks don't." The court further upheld the tagline "Upgrade Your Formula. Upgrade Your Game," which appeared on product labeling and in other advertising for Powerade ION4.

Steven Zalesin, who is Chair of the Litigation Department and Deputy Managing Partner of the Firm, is lead counsel in the matter, and is assisted by partner Sarah Zgliniec and associates Carrie Syme, Matthew Larsen, Timothy Waters and Abja Midha. The case is Stokely Van-Camp, Inc. v. The Coca-Cola Company and Energy Brands Inc., No. 09-CV-3741 (JGK) (S.D.N.Y. Aug. 4, 2009).