How Powerade Defeated Gatorade in Court


Yesterday's verdict in favor of Coca-Cola's Powerade had a lot to do with endurance -- Gatorade Endurance, court documents revealed.

On April 13, Gatorade's parent company, the PepsiCo-owned Stokley Van Camp, filed suit against Coca-Cola's Powerade ION4 product. It alleged false advertising, trademark dilution as well as other claims.

The case centered around the fact that Powerade ION4 positioned itself as the more complete sports drink because it added two electrolytes that Gatorade did not have -- calcium and magnesium. At the same time, Powerade called out Gatorade for being incomplete.

Manhattan district judge John G. Koeltl ruled on Aug. 4 that SVC "has not shown either a likelihood of irreparable injury or a likelihood of success on the merits."

In fact, the judge wrote: "Given SVC's research capabilities and resources [including the Gatorade Sports Science Institute], its failure to present any concrete evidence of harm or likely harm is striking."

The judge also explicitly cited Gatorade's "unclean hands" as a key factor in determining the verdict. This referred to the fact that Gatorade was planning to launch a similar product called Gatorade ION+ prior to the debut of Powerade ION4. The court documents said that Gatorade saw this as a "competitive defense against ION4 by blunting any marketing advantage Coca-Cola might achieve."

However, PepsiCo was having issues sourcing calcium. So rather than launch the product after ION4, it decided to decry Powerade's claims.

But undermining this complaint was the fact that Gatorade Endurance, launched in 2004, had been making the same claims about the benefits of calcium and magnesium in its formulation.
"In fact," the court documents said, "SVC appears to have gone further than even Coca-Cola, directly attributing performance and hydration benefits to the presence of these two electrolytes in Gatorade Endurance Formula." It provided a table highlighting these ingredients for its packaging and called them "key electrolytes lost in sweat."

Any mention of this was scrubbed from the brand's marketing prior to Gatorade filing suit. And on March 25, SVC issued talking points to its spokespeople claiming that magnesium and calcium are not important in a sports drink. Members of the marketing group expressed "concern" about the tactic, per the court documents.

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