Gatorade-Powerade False Advertising Case Resolved, For Now

      

You may recall the Gatorade v. Powerade false advertising lawsuit filed by a Pepsico entity (Stokely-Van Camp, Inc.) against rival The Coca-Cola Company back in April, discussed here (with a copy of the complaint).

You also may recall how G scored an F in the courtroom, back in August, losing a hotly contested motion for preliminary injunctive relief, discussed here.

So, I guess it was only a matter of time before G decided the case wasn't worth breaking a sweat over any longer.

Interestingly, the Stipulation and Order ending the case, has the owner of the Gatorade brand dismissing with prejudice (meaning they can never be reasserted) all claims it had asserted in the lawsuit against Powerade brand owner Coca-Cola. 

It shows Coca-Cola only dismissing with prejudice its affirmative defenses and counterclaim, "insofar as they specifically address [Gatorade's] marketing, labeling, advertising and/or promotional claims concerning the inclusion of calcium and/or magnesium in Gatorade Endurance Formula." All other defenses and claims asserted by Coca-Cola were dismissed without prejudice (meaning they are not barred from being reasserted in the future).

Given this unequal treatment in the settlement, it would appear that Gatorade was more anxious to end the case than Powerade.

Recalling that Gatorade and Powerade battled in court over advertising claims back in 2006, any predictions on how long until these two sports drink brand rivals slug it out again in court?

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Lion's Tap Reaches "Mutually Beneficial" Settlement with McDonalds

A couple of hours ago Kare 11 News in Minneapolis reported "Lions Tap wins settlement with McDonalds."

Absolutely no details about the settlement were provided, so it's hard to understand how Kare 11 is able to pronounce this as a "win" for Lion's Tap over McDonalds, although it certainly plays into the seductive David and Goliath theme of the case. The attorney for Lion's Tap apparently is quoted as saying the parties reached a "mutually beneficial amicable resolution," and Kare 11 further reports that McDonalds did not "immediately return a phone message seeking a comment" today.

Perhaps even more troubling than the unsupported "win" characterization, is the repeated failure of the traditional media covering this story to get the facts straight -- facts easily discernible by reading the federal court complaint that is so often recited in the stories, but apparently very few actually have undertaken to read it. In case you're interested, here is another link to the actual complaint.

As we have documented before on DuetsBlog, Lion's Tap did not register the "Who's Your Patty" slogan until after McDonalds began use and only days before filing suit against McDonalds, and it did not register -- even in Minnesota -- four years ago, as repeatedly and incorrectly reported ad nauseam by the media.

In fairness, although local CBS affiliate WCCO also republished the significant error on the timing of Lion's Tap's Minnesota registration of the "Who's Your Patty" slogan, at least it didn't assume the settlement to be a "win" for the Tap: "Lion's Tap Settles With McD's Over Catchphrase."

Our coverage of this case is here (9/3/09), here (9/8/09), here (9/21/09), and here (10/17/09).

In case we have not heard the last word on this case, stay tuned, and we'll let you know more as we know more about this Lion's Tap "win" and "mutually beneficial" resolution.

UPDATE: Is the Star Tribune reading DuetsBlog? It appears so. A Google search shows the Star Tribune's original story title on the settlement was: "Lion's Tap wins trademark suit against McDonald's," but now the story is titled: "Lion's Tap settles trademark suit against McDonald's," with no mention of the Minnesota State registration.

Now we just need to get USAToday, NPR, Newstin, Daylife, and NewsSpider, on the bandwagon.

Whatever Happened to the Adversarial System?

My job sometimes is rescuing attorneys, often from themselves. Perhaps the quintessential illustration is a comment made by a corporate general counsel recently, whose organization was responsible for a number of victims, including fatalities. Her opening line to me was, “We’re not the empathy department in this company.” However, the reason she was talking to me was that the organization was about to be inundated with lawsuits from survivors, additional victims not yet known, and the unintended negative visibility that generally accompanies these situations, especially when your organization is considered a perpetrator.

Clearly, the adversarial system works in the courtroom—a rigorously controlled process and environment. Outside the courtroom, the adversarial attitude quickly brands one as cold, arrogant, callous, and anti-victim.

One of my clients is among the largest losers in an intellectual property lawsuit involving copyright infringement. For some 25 years, this firm distributed (via the most convenient mechanism available) copies of a small, highly focused financial advisory newsletter to all of its agents, associates, and franchises. At the end of 25 years, the author of the newsletter decided to sue for infringement. When I heard about the case, my first question to the client’s legal department was, “What’s your plan to settle this case?”

I received two immediate responses: “We’re not interested in settling” and “We have a good defense.” “What,” I asked, “could possibly be a defense that passes the straight face test?” The lawyers’ response was that the individuals involved, “waited too long to file a lawsuit.” “They knew all along what this client was doing with the materials.” My response was, “Even as a non-attorney, my guess is they have you dead to rights. Try to get them paid today. It’s only going to get worse if you wait.” The answer was something along the lines of a trial being inevitable.

The lawyer was prophetic and, of course, the trial was worse and sillier than one can possibly imagine. The jury threw the book at my client. The verdict was never appealed even though there was some bluster at the time that, obviously, such a huge jury award would be appealed.

The lesson for all attorneys is getting clearer by the day: Even though our system is adversarial at its root, as the number of cases getting to trial decreases, more and more forces are pushing for settlement. Increasingly, the answer is to find and hire lawyers who are comfortable being empathetic. Being empathetic is the opposite of being adversarial. Empathy means doing things that matter, where actions speak far louder than words. The concept of empathy is often described as “putting yourself in someone’s shoes.” If that other person is a victim, you’ll be causing yourself and your argument, as well as your attempts to settle, extraordinary damage. Better to step back and look at what the “victim” needs that you can provide, promptly, as a means of settlement and resolution.

Ninety-nine cases out of 100 filed will be settled, arbitrated, negotiated, dropped, or dismissed. Having your day in court is getting to be a pretty rare event.

Oh, and did I mention learning how to apologize? We’ll save that for another blog post.

-- James E. Lukaszewski, The Lukaszewski Group Inc.