Judge Nixes Gatorade Versus Powerade Dispute

(CN) - A federal judge in Manhattan tossed Pepsi's claim that rival Coca-Cola deceptively advertised its Powerade sports drinks as containing crucial electrolytes missing in Pepsi's Gatorade and being "more like human sweat" than the competing drink.

U.S. District Judge John G. Koeltl said Pepsi "has not shown either a likelihood of irreparable injury or a likelihood of success on the merits."

Pepsi-owned Stokely-Van Camp filed the lawsuit in April under the Lanham Act.

In March, Coca-Cola and Energy Brands launched a new drink called Powerade ION4, which was billed as being "more like human sweat" than the old Powerade and Gatorade.

Powerade ION4 contains small quantities of calcium and magnesium, small amounts of which are lost in sweat, according to the opinion. The drink was billed as the first to include four electrolytes - sodium, potassium, magnesium and calcium - as opposed to just sodium and potassium, "at the same ratio typically lost in sweat."

Coca-Cola admitted that it borrowed the "true sweat replacement" idea from SVC, which successfully sold Gatorade as a "sweat replacer" for years.

After catching wind of Powerade's ION4, Gatorade quickly planned its response by creating Gatorade ION+, containing its own "sweat-emulating reformulation," to hit shelves before the new Powerade.

A memo written by an SVC scientist endorsed the idea, saying the new Gatorade product would undermine the Powerade marketing campaign and make it appear that "Powerade is coming late to the electrolyte party."

But SVC hit a roadblock when its supply of calcium dried up. It had to scrap the idea, because the setback meant Gatorade would not beat Powerade ION4 to the market.

At the urging of SVC lawyers, the company began to "purge its advertising" of positive references to calcium and magnesium.

Powerade launched its marketing campaign in March, hammering its rival in ads that depicted half a bottle of Gatorade, with text that read, "Don't settle for an incomplete sports drink."

Pepsi sought a preliminary injunction to stop the ads in June. Coke said the comparative ad campaign was intended to be short-lived and is now over.

"SVC complains about Coca-Cola's claims regarding the presence of calcium and magnesium in Powerade ION4, but it has made virtually the same claims about calcium and magnesium in its own Gatorade Endurance Formula," Judge Koeltl noted.

"SVC cannot, having jumped on the bandwagon of calcium and magnesium first, now jump off and claim that Coca-cola must get off too," Koeltl concluded.

Gatorade is estimated to control 75 to 80 percent of the sports-drink market, with sales that exceed $4 billion annually.

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