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Pepsi, FCB Agree to Disagree

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Hours of negotiations between PepsiCo and Foote, Cone & Belding in a Chicago courtroom last week ended without resolution after the companies debated client/agency relationships and confidential information.

U.S. District Court Judge James Holderman mediated the three-hour proceeding, which was intended to settle a lawsuit filed by Pepsi that seeks to prevent its former Gatorade agency, FCB, from working on Coca-Cola's rival Powerade brand.

Sources said Pepsi offered to agree to a six-month waiting period before FCB could start working on Powerade. FCB refused the offer as unfair, insisting on the traditional 90-day transition period.

Pepsi is trying to keep the account away from FCB for as long as possible through a federal lawsuit, filed by subsidiary Quaker Oats Co. The lawsuit charges that FCB should not work on Powerade because it cannot be trusted to keep secrets learned while working on Gatorade.

Those at the hearing, including FCB Worldwide CEO Brendan Ryan and the agency's Chicago CEO, Dana Anderson, declined comment other than to say that hearings scheduled for Dec. 13 and 14 were still on.

Lewis Clayton, representing FCB, and Pepsi attorney Roger Pascal said nothing had changed as a result of the talks.

Coke shops Wieden + Kennedy in Portland, Ore., and Berlin Cam eron & Partners in New York were to lose Powerade and Dasani, respectively, to FCB Chicago in October. Coke returned those accounts to the shops two weeks ago, pending the outcome of the litigation.

Many observers wondered why those agencies would accept the accounts when they would likely move soon. But sources said Coke gave the agen cies the nod to handle the brands through September.

Executives at the agencies and Coke de clined comment.

Four FCB staffers who worked on Pepsi's Aquafina are prevented from working on Dasani due to a separate Pepsi lawsuit in Chicago's Cook County Circuit Court. That suit was filed in late October to prevent an initial meeting between those staffers and Coke executives.