Intellectual Property Law

Text of Decision in GATORADE v POWERADE: Not Completely False

By Marty Schwimmer

Coke's POWERADE brand sports drink was contemplating how to take market share from segment leader Pepsi's GATORADE product. It decided to tout the addition of calcium, magnesium and potassium. It ran a campaign describing these minerals as 'critical', describing POWERADE as 'complete,' describing GATORADE as 'incomplete' alongside a depiction of half a GATORADE bottle (pictured above is the cover of ESPN magazine containing a fold-out ad - the cover says 'you wouldn't settle for an incomplete cover' and then folding out to contain the POWERADE 'incomplete' ad).

Interestingly, Pepsi had intended to pursue a similar strategy, but ran into a problem sourcing sufficient calcium. It then removed references on its website to calcium as being beneficial. (Ed Note: I would be interested if anyone has scoop on why the worldwide calcium shortage affected Pepsi but not Coke).

So Pepsi sues in the 'complete vs incomplete' claims, the 'critical' claims, use of the slogan 'UPGRADE YOUR FORMULA, UPGRADE YOUR GAME,' and the half a bottle depiction.

The campaign began in late March, Pepsi sued on April 13, Coke pulled some of the ads in late May (after the campaign ran its intended 60 days). Pulling the ads mooted some of the claims, including the half a bottle one, which is too bad from my point of view, because I'm interested in post-Federal Dilution Act analyses of 'scared john deere' type claims.

The SDNY rejects' Pepsi's motion for preliminary injunction on straight-forward grounds. "Complete' and 'critical' are the sort of vague types of puffery that we expose ourselves too all the time. The Court notkes that Coke was sophomoric and boorish, but not deceptive. As for 'UPGRADE YORU GAME;' the Court notes:

No reasonable consumer, having read the slogan, would be justified in believing that it would actually result in improved athletic abilities such as playing a better game of basketball.

Ha! Take a look at who Pepsi and Coke pay to endorse the product. Look at the ads. Spend time with thirteen year old boys. These products thrive on unreasonable consumers relying on unjustified beliefs.

Beverage industry commentary here.

Decision Stokely

Full post as published by Trademark Blog on August 08, 2009 (boomark / email).