Pepsi, Coke tussle in NY court over electrolytes

By Grant McCool

NEW YORK, June 4 (Reuters) - Lawyers for household name rivals PepsiCo Inc (PEP.N) and Coca-Cola Co (KO.N) squared off in court on Thursday over whether a nationwide advertising campaign falsely claimed U.S. market-leading Gatorade sports drink was missing crucial electrolytes.

The blitz by Coca-Cola in March for its Powerade ION4 sports drink "poisoned the well" against Gatorade, lawyer Harold Weinberger for the Stokely-Van Camp Inc unit of Pepsi that makes Gatorade, said in arguments in Manhattan federal court.

Coca-Cola's lawyer, Steven Zalesin, who handed up a black-topped, black-labelled bottle of the reddish Powerade ION4 drink to presiding U.S. District Judge John Koeltl, described a lawsuit filed in April by Pepsi as a "strange, strange" case.

"The advertising campaign was short lived and it is over," said Zalesin, who also put a bottle of the drink on the court lectern. "They are reduced to arguing over the small print."

Coke launched Powerade ION4 in February, calling it the first sports drink formulated to include four electrolytes -- sodium, potassium, magnesium and calcium -- instead of two (sodium and potassium) "in the average ratio typically lost in perspiration."

The purveyors of Gatorade sued Coca-Cola and Energy Brands Inc under the U.S. trademark law known as the Lanham Act, citing deceptive acts and unfair competition.

Advertising in print, on giant billboards and on websites for Powerade ION4 splashed photos of Gatorade bottles lopped in half beneath bold slogans such as "Don't settle for an incomplete sports drink" [ID:nN13385059].

On Thursday, Weinberger told the judge: "They have poisoned the well. They go out in a very aggressive way for 30 days and then stop. They say Gatorade is 'incomplete' and say our product is 'the' complete drink."

Coke's lawyer Zalesin said no more references were now being made to Gatorade and no damages had been suffered. He said Stokely made the same claims about calcium and magnesium in one of its own advertising campaigns for five years until recently.

"This is about a semantic difference between 'a' and 'the'," Zalesin said. "We're here over the word 'the'."

Stokely-Van Camp Inc, owned by Quaker Oats, which is in turn controlled by Pepsi, has asked the court to issue an injunction to halt the advertising. Koeltl would hear more arguments and evidence on Friday before ruling at his discretion.

The two companies have picked numerous fights worldwide with each other over the years, including during the 1980s when the hugely successful "Pepsi Challenge" advertising campaign helped prompt Coke to alter its cola formula to invent New Coke, which promptly fizzled.

The case is Stokely-Van Camp, Inc. v. The Coca-Cola Company et al 09-03741 in U.S. District Court for the Southern District of New York (Manhattan) (Reporting by Grant McCool; Editing by Andre Grenon)