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`Plaintiffs,
`
`vs.
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`LABORATORIOS PISA S.A. de C.V; AND
`CAB ENTERPRISES, INC.,
`
`
`
`
`
`PEPSICO, INC.; AND STOKELY-VAN
`CAMP, INC.,
`
`
`
`
`
`
`Civ. Action No.: 7:21-CV-0062
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`
`
`(JURY DEMAND)
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`Case 7:21-cv-00062 Document 1 Filed on 02/18/21 in TXSD Page 1 of 54
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF TEXAS
`
`Defendants.
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`COMPLAINT
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`Plaintiffs Laboratorios Pisa S.A. de C.V (“Pisa”) and CAB Enterprises, Inc. (“CAB”)
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`(collectively “Plaintiffs”), by their attorneys and for their Complaint against PepsiCo, Inc. and
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`Stokely-Van Camp Inc. (collectively, “PepsiCo”), allege and state as follows:
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`NATURE OF THE ACTION
`
`1.
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`This is an action to prevent PepsiCo from unlawfully copying plaintiffs’ products and to
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`stop PepsiCo’s unethical, monopolistic and otherwise unlawful attempts to replace plaintiffs’
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`products on U.S. store shelves.1
`
`2.
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`First developed in Mexico over seventy years ago, Plaintiffs’ Electrolit® brand of premium
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`hydration beverages earned its place as a staple in many households over the past decades in this
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`judicial district and beyond.
`
`
`1 Plaintiffs learned less than a week ago that PepsiCo plan to launch an infringing “Gatorlyte”
`rehydration beverage product this Sunday, February 21, 2021. Pepsico’s infringing product
`launch, if not enjoined by the Court, will irreparably harm Plaintiffs. Accordingly, Plaintiffs are
`concurrently filing an Emergency Motion seeking a Temporary Restraining Order enjoining
`PepsiCo from proceeding with their product launch to avoid irreparable harm to Plaintiffs.
`
`
`1
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`

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`3.
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`As a result, the ELECTROLIT brand, trademarks and trade dress are instantly recognizable
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`to a large portion of both the U.S. and Mexican population and are associated with Plaintiffs’
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`products and their considerable goodwill.
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`4.
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`Unable to compete with ELECTROLIT beverages, PepsiCo has resorted to an unethical
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`and illegal campaign of copying and intimidation, including using its monopoly to prevent
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`ELECTROLIT beverages from being sold in U.S. stores altogether.
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`5.
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`PepsiCo, a repeat marketplace bully, must be enjoined from succeeding in its scheme to
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`unlawfully intimidate, slavishly copy, and ultimately muscle out a much smaller, family-owned
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`competitor from the U.S. market.
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`6.
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`Envious of the ELECTROLIT brand’s wild success since its formal introduction to the
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`U.S. market several years ago, PepsiCo’s actions have demonstrated not just a belated recognition
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`of the market proven by ELECTROLIT’s success or even a good-faith effort to compete on a level
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`playing field, but a desire to copy and replace ELECTROLIT beverages with PepsCo’s version of
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`the ELECTROLIT brand, no matter what it takes.
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`7.
`
`When PepsiCo purchased the Gatorade line of products in the 2000s for billions of dollars,
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`even then federal regulators recognized the monopoly that PepsiCo was solidifying in the beverage
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`industry and the harm that could result. After squeaking by on a 2-2 vote of the Federal Trade
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`Commission’s antitrust investigation of PepsiCo’s purchase of Gatorade’s previous owner, Quaker
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`Oats, commissioners Sheila F. Anthony and Mozelle W. Thompson warned that “PepsiCo's
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`acquisition of Quaker Oats is unlawful and contrary to the public interest. … As a result of the
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`Commission's failure to act today, we believe that consumers of sports drinks and, indeed, all soft
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`drinks will suffer the consequences.” Those well-founded fears have come to pass in the ensuing
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`2
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`

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`Case 7:21-cv-00062 Document 1 Filed on 02/18/21 in TXSD Page 3 of 54
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`decades, now most recently in PepsiCo’s unlawful attempt to copy and replace ELECTROLIT
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`beverages on store shelves.
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`8.
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`For years, PepsiCo recognized and touted the scientific benefits of electrolytes in sports
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`and rehydration beverages. Indeed, the Gatorade brand is built around this fundamental science.
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`But despite all the successes of Gatorade, PepsiCo still struggled with fully converting electrolyte
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`science into commercial success. PepsiCo’s best efforts resulted in the powdered drink additive
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`that they called “Gatorlytes,” sold as individual pouches for consumers to mix into other beverages
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`like Gatorade. The original version of Gatorlytes never took off and was a failure.
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`9.
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`Then, in 2014, confident from its decades-long success in Mexico, plaintiff CAB first
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`formally introduced ELECTROLIT beverages into the U.S. market as a ready to drink premium
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`hydration beverage. Sales have doubled year-over-year since, and PepsiCo noticed.
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`10.
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`Having failed with their powder pouches, and despite the billions of dollars that PepsiCo
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`spends every year on advertising and marketing, PepsiCo realized that the quickest (albeit illegal
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`and unethical) way to compete with Plaintiffs’ ELECTROLIT beverages was to try and push it
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`around, copy it, then use its monopoly power to kick ELECTROLIT beverages from store shelves
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`altogether.
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`11.
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`Late last year, when the ELECTROLIT brand’s success and popularity became too much
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`competition to tolerate, PepsiCo began their intimidation tactics, having their lawyers complain
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`about one ELECTROLIT brand advertising claim or another, meanwhile taking notes on how
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`ELECTROLIT brand beverages had been able to enjoy the success that had proved so elusive for
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`PepsiCo.
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`12.
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`Indeed, the very same ELECTROLIT brand marketing that PepsiCo’s lawyers claimed was
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`illegal was now being prominently featured by PepsiCo in their pre-launch marketing for their new
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`3
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`

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`Case 7:21-cv-00062 Document 1 Filed on 02/18/21 in TXSD Page 4 of 54
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`
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`ELECTROLIT clone, “Gatorlyte,” which, on information and belief, is scheduled to launch on
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`February 21, 2021.
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`13.
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`PepsiCo’s
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`copying
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`of
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`the
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`ELECTROLIT brand is not subtle or
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`nuanced, as shown by pictures of the
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`respective products.
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` PepsiCo copied
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`nearly
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`every distinctive
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`feature of
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`ELECTROLIT’s
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`trademarks and
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`trade
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`dress into their Gatorlyte product. From
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`the prominent white diagonal banner down
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`to the positioning of the similar name,
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`inclusion of a circular badge and solid color
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`“Premium Hydration” / “Rapid Hydration”
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`subtitle background, tapered lower profile
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`and even the flavor offerings, PepsiCo’s
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`clone is nearly complete.
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`14.
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`Still not satisfied or confident in its ability to compete for success on store shelves, even
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`with its ELECTROLIT clone, PepsiCo turned to its stranglehold of the store shelves themselves.
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`In pre-launch marketing efforts directed to retailers, PepsiCo directed retailers to place Gatorlyte
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`“next to or in place of ELECTROLIT” with a large red X-out of ELECTROLIT beverages:
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`4
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`Case 7:21-cv-00062 Document 1 Filed on 02/18/21 in TXSD Page 5 of 54
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`(PepsiCo instructions to distributor representatives to intermix or replace ELECTROLIT products
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`with Gatorlyte)
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`15.
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`PepsiCo’s message was clear: it’s us or them. For retailers, this is not a choice at all.
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`PepsiCo’s monopolization of the sports drink market and the larger beverage market, in
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`combination with their substantial stake in the market for foodstuffs makes it impossible for
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`retailers to say no to PepsiCo.
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`16.
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`As a result of PepsiCo’s unlawful actions, Plaintiffs have suffered and continue to suffer
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`irreparable harm.
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`17.
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`To stop this unlawful conduct, and to recover the damages caused by it, Plaintiffs bring
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`this action for injunctive and monetary relief for false designations of origin and trade dress
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`infringement in commerce in violation of Section 43 of the Lanham Act (15 U.S.C. § 1125);
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`5
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`

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`Case 7:21-cv-00062 Document 1 Filed on 02/18/21 in TXSD Page 6 of 54
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`trademark infringement in violation of Section 32 of the Lanham Act (15 U.S.C. § 1114) and the
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`common law; trademark dilution in violation of Section 43 of the Lanham Act (15 U.S.C. § 1125)
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`and Tex. Bus. & Com. Code § 16.103; unfair competition in violation of Tex. Bus. & Com. Code
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`§ 17.46 and the common law; violations of common-law prohibitions against unjust enrichment
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`and tortious interference with existing and prospective business relationships; violations of Section
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`1 of the Sherman Act and/or Section 3 of the Clayton Act (tying); violation of Section 1 or 2 of
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`the Sherman Act and/or Section 3 of the Clayton Act (exclusive dealing); violation of Section 2 of
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`the Sherman Act (monopoly leveraging and attempt to monopolize); and violation of the Texas
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`Free Enterprise and Antitrust Act of 1983 (Tex. Bus. & Com. Code Ann § 15.01 et seq.).
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`18.
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`PepsiCo’s unlawful conduct, if unabated, will likely cause a loss of more than $100 million
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`in damages and lost business revenue to Plaintiffs.
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`THE PARTIES, JURISDICTION AND VENUE
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`19.
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`Plaintiff Pisa is a Mexican company with its principal place of business at Av. España No.
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`1840, Colonia Moderna, C.P. 44190, Guadalajara, Jalisco, Mexico. Pisa is the owner of the Pisa
`
`and ELECTROLIT trademarks (listed below) and trade dress associated with ELECTROLIT
`
`described below.
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`20.
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`Plaintiff CAB is a Delaware corporation with its principal place of business at 17777
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`Center Court Drive, Suite 600, Cerritos, CA 90703. CAB is the sole licensee in the United States
`
`for the trademarks and trade dress associated with ELECTROLIT described below (collectively
`
`the “ELECTROLIT Marks and Trade dress”).
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`21.
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`Defendant PepsiCo, Inc. is a North Carolina corporation with offices at 700 Anderson Hill
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`Road, Purchase, New York, 10577. PepsiCo has significant operations in Texas and in this judicial
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`6
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`Case 7:21-cv-00062 Document 1 Filed on 02/18/21 in TXSD Page 7 of 54
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`district, conducted out of several properties owned or leased by PepsiCo, including in Houston,
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`Corpus Christi, Laredo, McAllen, Plano, and Arlington, Texas.
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`22.
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`Defendant Stokely-Van Camp, Inc. is an Indiana corporation with offices at 700 Anderson
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`Hill Road, Purchase, New York, 10577 and 555 West Monroe Street, Chicago, IL 60661. Upon
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`information and belief, Stokely, through and together with PepsiCo, have significant operations in
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`Texas and in this judicial district, conducted out of several properties owned or leased by PepsiCo,
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`including in Houston, Corpus Christi, Laredo, McAllen, Plano, and Arlington, Texas.
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`23.
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`On information and belief, PepsiCo used the ELECTROLIT Marks and Trade Dress in
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`commerce in connection with the selling, offering for sale, distributing and advertising of Gatorlyte
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`without Plaintiffs’ consent, within this judicial district and beyond.
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`24.
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`On information and belief, PepsiCo committed this infringement willfully and in bad faith,
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`with actual knowledge of the infringing activity or at least with objective recklessness or willful
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`blindness that his acts constituted, induced or contributed to infringement.
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`25.
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`On information and belief, PepsiCo committed acts of unfair competition, tortious
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`interference with existing and prospective business relations, and has been unjustly enriched within
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`this judicial district and beyond.
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`26.
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`On information and belief, PepsiCo committed acts in violation of the Sherman Act,
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`Clayton Act and Texas Free Enterprise and Antitrust Act of 1983 within this judicial district and
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`beyond.
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`27.
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`This Court has jurisdiction because this is an action at least partly arising under the
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`Trademark Act of 1946, as amended, 15 U.S.C. §§ 1051, et seq. (the Lanham Act), the Sherman
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`Antitrust Act (15 U.S.C. §§ 1-7) and Clayton Antitrust Act (15 U.S.C. §§ 12-27), jurisdiction being
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`conferred in accordance with 15 U.S.C. § 1121 and 28 U.S.C. §§ 1331 and 1338. This Court also
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`7
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`has subject matter jurisdiction over this dispute under 28 U.S.C. § 1332(a)(1) because there is
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`complete diversity of citizenship among the parties and the amount in controversy, exclusive of
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`interest and costs, exceeds $75,000. This Court also has jurisdiction for the claims made under
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`Texas statutory and common law in accordance with the principles of supplemental jurisdiction
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`pursuant to 28 U.S.C. § 1367.
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`28.
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`This Court has personal jurisdiction over PepsiCo because, on information and belief,
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`PepsiCo resides and has substantial contacts in the State of Texas and within this judicial district.
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`Furthermore, on information and belief, PepsiCo has deliberately engaged in significant and
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`continuous business activities within Texas. Accordingly, Plaintiffs have established minimum
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`contacts with the Southern District of Texas.
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`29.
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`Venue is proper in this district under 28 U.S.C. § 1391 because defendants have committed
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`and continue to commit tortious acts in this judicial district and a substantial part of the events
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`giving rise to the claims alleged herein occurred in this district, and also under 28 U.S.C. § 1391,
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`because Defendant is subject to this Court’s personal jurisdiction for purposes of this case.
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`FACTUAL BACKGROUND
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`Pisa and ELECTROLIT
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`30.
`
`Pisa’s origins date to 1945 in Mexico and the formation of Productos Infantiles, S.A., PiSA,
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`which primarily developed and sold medicinal products for children and infants. In 1950,
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`ELECTROLIT products were developed as a solution for dehydration in children, a crucial need
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`during a wave of cholera striking Mexico at the time. The photograph below shows early
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`ELECTROLIT brand product.
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`8
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`31.
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`Productos Infantiles, S.A., PiSA became Laboratorios Pisa S.A. de C.V in 1955 amid the
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`growth sparked by ELECTROLIT products. Over the years, ELECTROLIT beverages have proven
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`to be wildly successful products among children and adults alike and have emerged as Pisa’s
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`leading product, selling over 200 million bottles in 2016 alone—2 for every person in Mexico.
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`Manufacturing genuine ELECTROLIT bevrages employs over 17,000 people in nine plants. With
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`this investment, Pisa has built the capability to manufacture 2 billion ELECTROLIT bottles per
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`year. Today, due to the success of the ELECTROLIT brand and Pisa’s other health and
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`pharmaceutical products, Pisa is the largest pharmaceutical company in Mexico and Latin
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`America.
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`32.
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`In 2014, CAB was formed in the United States and was appointed the exclusive authorized
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`distributor in the United States for ELECTROLIT product. In connection therewith, CAB was
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`granted a license to the trademarks, copyrights and trade dress associated with U.S. ELECTROLIT
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`products described below and was tasked with translating the overwhelming success of the
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`ELECTROLIT brand in Mexico into a similar dominance in the U.S. market.
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`33.
`
`Today, CAB distributes ELECTROLIT beverages to over 30,000 accounts in the United
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`States. ELECTROLIT beverages are sold to consumers in the United States through several
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`9
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`Case 7:21-cv-00062 Document 1 Filed on 02/18/21 in TXSD Page 10 of 54
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`channels, including online through retailers such as Amazon as well as through supermarkets,
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`convenience stores and all grocery store formats.
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`34.
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`Pisa is the owner of the following “Pisa” and “ELECTROLIT” trademarks and CAB is the
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`sole licensee in the United States of these registered trademarks (collectively, the “ELECTROLIT
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`Marks”), one or more of which appear on packaging and advertisements for all U.S.
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`ELECTROLIT products:
`
`Mark
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`U.S. Reg. No.
`
`Reg. Date
`
`Relevant Goods
`
`4222726
`
`
`
`“ELECTROLIT”
`
`4833885
`
`Oct. 9, 2012 Class 5: Electrolyte replacement solution
`for oral rehydration.
`Class 32: Oral rehydration beverages,
`namely, sports drinks.
`Oct. 13, 2015 Class 5: Pharmaceutical products,
`namely, electrolyte replacement
`solutions; veterinary products, namely,
`dog, horse, pig, cat, bird, and ruminant
`food, bacterial and bacteriological
`preparations for veterinary use, chemical
`reagents for veterinary purposes,
`enzymes for veterinary purposes,
`diagnostic preparations for veterinary
`purposes, veterinary vaccines; hygienic
`products, namely, skin cleansing
`solutions for medical use; dietetic
`substances for medical use, namely, diet
`pills, diet capsules, and diet drinks; baby
`food; poultices; wound dressings; dental
`poultices; dental mold poultices;
`disinfectants for home use; products for
`the destruction of harmful animals,
`namely, insecticides and pesticides;
`fungicides; herbicides.
`Class 32: Beers; mineral waters;
`carbonated beverages; non-alcoholic
`beverages, namely, water, flavored
`water; fruit beverages and juices; syrups
`for making beverages.
`
`10
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`

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`Case 7:21-cv-00062 Document 1 Filed on 02/18/21 in TXSD Page 11 of 54
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`Mark
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`U.S. Reg. No.
`
`Reg. Date
`
`Relevant Goods
`
`4717350
`
`Apr. 7, 2015 Class 5: Electrolyte replacement
`solutions for oral rehydration.
`Class 32: Oral rehydration beverages,
`namely, sports drinks containing
`electrolytes.
`
`
`
`
`
`4717232
`
`Apr. 7, 2015 Class 5: Electrolyte replacement
`solutions for oral rehydration.
`Class 32: Oral rehydration beverages,
`namely, sports drinks containing
`electrolytes.
`
`
`
`
`
`35.
`
`True and correct copies of the registrations for the ELECTROLIT Marks are attached
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`hereto as Exhibit 1.
`
`36.
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`Since long prior to PepsiCo’s acts complained of herein and through the present, Pisa
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`and/or CAB have made continuous use of the ELECTROLIT Marks in connection with U.S.
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`ELECTROLIT products and plan to do so in the future.
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`37.
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`The ELECTROLIT Mark registrations are valid, subsisting and (with the exception of Reg.
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`No. 4833885) incontestable and constitute conclusive evidence of Pisa and CAB’s exclusive right
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`to use the ELECTROLIT Marks for the goods specified in the registrations. 15 U.S.C. §§ 1065,
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`1115(b).
`
`38.
`
`Plaintiffs use distinctive packaging (the “ELECTROLIT Trade Dress”) to distinguish its
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`genuine U.S. ELECTROLIT products in the marketplace. Pisa owns, and CAB is the U.S. sole
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`11
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`licensee with respect to, the ELECTROLIT Trade Dress, which consists of, but is not limited to
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`the packaging illustrated below:
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`
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`39.
`
`Plaintiffs have used the ELECTROLIT Trade Dress pictured above on U.S. ELECTROLIT
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`product since at least as early as 2014 and through the present date. Plaintiffs are currently using
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`the ELECTROLIT Trade Dress in commerce and in connection with their sale of U.S.
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`ELECTROLIT and plan to continue such use in the future.
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`40.
`
`41.
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`The ELECTROLIT Trade Dress is arbitrary, non-functional and distinctive.
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`The ELECTROLIT Marks and ELECTROLIT Trade Dress have been extensively and
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`continuously used by Plaintiffs and are inherently distinctive and/or have become distinctive
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`through the acquisition of secondary meaning.
`
`42.
`
`Since the formation of CAB in 2014, $39.9 million has been spent in the United States to
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`advertise and promote the ELECTROLIT brand in the U.S. The ELECTROLIT Marks and
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`12
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`ELECTROLIT Trade Dress is prominently displayed in Plaintiffs’ advertising and promotional
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`materials.
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`43.
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`Plaintiffs advertise and promote the ELECTROLIT brand in the U.S. through various
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`means, including electronic media, print media, promotional and point of sale materials, presence
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`at live events and through various social media channels, including Facebook and Instagram.
`
`44.
`
`As a result of Plaintiffs’ extensive sales, promotion and advertising of the ELECTROLIT
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`brand, the ELECTROLIT Marks and Trade Dress have become famous among the consuming
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`public of Texas and the United States and represent valuable goodwill to Plaintiffs. The
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`ELECTROLIT Marks and Trade Dress are also famous among the general consuming public in
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`Texas, especially in West and South Texas.
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`45.
`
`Pisa’s use of the ELECTROLIT Marks dates back to the 1950s and the ELECTROLIT
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`Marks have been in continuous, exclusive use since that time. CAB began using the ELECTROLIT
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`Marks and Trade Dress in the U.S. in 2014 and since then has spent tens of millions of dollars on
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`advertising and promotion of the ELECTROLIT Marks and Trade Dress among the general
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`consuming public in the U.S. CAB’s advertising and promotion efforts have resulted in over 2.2
`
`billion advertisement impressions across 13 markets in the U.S. with a 70% reach per market, as
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`well as over 4.5 million social media engagements.
`
`46.
`
`As a result of Plaintiffs’ efforts, in addition to the popularity of the ELECTROLIT product
`
`itself, the ELECTROLIT Marks and Trade Dress have become household names among the
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`general consuming public in the U.S. In addition, the ELECTROLIT products, Marks, and Trade
`
`Dress have been wildly successful in Texas, especially south and west Texas. The exponential
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`growth of sales of ELECTROLIT beverages in the U.S. and total sales volume also evidence the
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`13
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`fame of the ELECTROLIT Marks and Trade Dress, with over 93 million bottles sold in the U.S.
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`since 2014 and 47 million in just the last year.
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`PepsiCo and Its Unlawful Conduct
`
`47.
`
`One of the beverage brands sold by PepsiCo is Gatorade, a ready to drink sports drink.
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`PepsiCo also sells a separate powder (not a ready to drink beverage) that they originally called
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`“Gatorlytes” that PepsiCo claims “is a five electrolyte blend … designed for athletes with high
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`electrolyte
`
`loss,
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`salty
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`sweaters
`
`and
`
`cramp-prone
`
`athletes.”
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`(www.gatorade.com/endurance/gatorlytes/unflavored/pouch).
`
`48.
`
`On information and belief, PepsiCo plans to convert its old, powdered additive
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`“Gatorlytes” into a new ready to drink beverage and sell it with the name “Gatorlyte” as early as
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`February 21, 2021. PepsiCo has already begun marketing and advertising in advance of the launch
`
`of its new ready to drink Gatorlyte. Instead of using the labeling that was already, designed,
`
`developed, and tested to work on the old “Gatorlytes” products, that was similar to the existing
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`Gatorade family of products, PepsiCo instead copied the ELECTROLIT brand’s look and feel by
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`copying the label, design, and trade dress of ELECTROLIT branded products. PepsiCo even took
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`the drastic step of changing the product’s name from plural “Gatorlytes” (a reference to the mix of
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`different electrolytes in the product’s formulation) to the singular “Gatorlyte” in an effort to make
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`their product name sound similar to the successful ELECTROLIT brand name.
`
`49.
`
`On information and belief, PepsiCo was aware and envious of the tremendous success that
`
`Plaintiffs have worked to achieve with their ELECTROLIT brand and sought to trade off the
`
`goodwill of and piggyback on ELECTROLIT brand’s success.
`
`50.
`
`PepsiCo set about to launch their own ready to drink electrolyte beverage to capture the
`
`market that ELECTROLIT brand’s success had proven exists. In a crude reference to the
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`14
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`
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`ELECTROLIT brand’s success in Mexico, PepsiCo dubs its target market for Gatorlyte “the
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`Hispanic consumer.”
`
`51.
`
`However, instead of innovating and competing fairly, PepsiCo chose to take a different,
`
`more familiar path.
`
`52.
`
`Upon information belief, PepsiCo created an unethical and illegal business plan to target
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`the “Hispanic consumer” that would utilize PepsiCo’s marketing, manufacturing, distribution and
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`legal departments to replace ELECTROLIT beverages with a copied version from PepsiCo.
`
`53.
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`In concert with and with knowledge that PepsiCo’s business teams were developing an
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`illegal copy of ELECTROLIT beverages, with the exact same branding and marketing slogans
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`behind the scenes, PepsiCo deployed its legal department to intimidate plaintiffs with false claims.
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`In November, 2020, Defendant Stokely had their “Senior Director Legal,” Brett Well, send
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`plaintiff CAB a threatening letter making hollow claims about ELECTROLIT advertising, alleging
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`that some of the marketing statements made about ELECTROLIT products were untrue.
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`54.
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`At the same time, however, PepsiCo was hatching its plot to copy the very same marketing
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`statements from ELECTROLIT’s advertising and trade dress for its copycat Gatorlyte products.
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`Accordingly, on information and belief, PepsiCo utilized their legal threats not out of some
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`genuine legal concern, but as a marketing ploy driven by the business decisions of PepsiCo to
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`unfairly compete with Plaintiffs.
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`55.
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`For example, PepsiCo complained about ELECTROLIT advertising’s use of the term
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`“instant hydration” and the claims that it is “perfectly formulated to work faster” and contains an
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`“optimal formula to hydrate faster than any sports drink” and demanded that ELECTROLIT
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`advertising cease using those terms. Meanwhile, on information and belief, PepsiCo itself was
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`finalizing its plans to advertise Gatorlyte the same way - with the claim that it offers “rapid
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`rehydration” and has an “optimized formula for faster absorption.”
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`56.
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`As another example, PepsiCo complained about ELECTROLIT advertising’s use of the
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`term “scientifically superior” while at the same time, on information and belief, it was finalizing
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`its plans to advertise Gatorlyte with the claim that it is “scientifically formulated.”
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`57.
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`In another example, PepsiCo complained about ELECTROLIT advertising’s claim that it
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`“prevents cramps,” yet made the claim that its old Gatorlytes powder was “designed for … cramp-
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`prone athletes.”
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`58.
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`On information and belief, PepsiCo conducted market and consumer research studies to
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`study the effectiveness of ELECTROLIT’s marketing, advertising, packaging and flavor selection
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`with consumers in preparation for producing its Gatorlyte product. As one result of this research,
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`PepsiCo concluded that “ELECTROLIT’s buyer base is drawn to ‘rehydration benefits’ from high
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`electrolyte content.”
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`59. When these efforts to directly intimidate plaintiffs into opening a marketing vacuum for
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`PepsiCo’s Gatorlyte product to fill failed, PepsiCo fell back on its undeniable advantage: size.
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`PepsiCo sent out its sales force to countless distributors and retailers that sold its wide range of
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`other beverages to demand that they make room for Gatorlyte, and not just anywhere. Drawing
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`on its existing share of cooler space at retail outlets, PepsiCo demanded that Gatorlyte be
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`positioned in “incremental” space relative to other Pespico beverages that is “next to or in place of
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`ELECTROLIT.”
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`60.
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`PepsiCo did not rely on intimidation of plaintiffs, distributors or retailers alone to set the
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`stage for Gatorlyte’s launch. PepsiCo copied ELECTROLIT trademarks and trade dress too.
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`61.
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`As they have been for years, PepsiCo’s Gatorade products are sold with their own round
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`bottle shapes, labels and graphics, as shown below.
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`62.
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`Gatorade bottles are cylindrical and feature rounded shoulders, a double upper groove and
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`a square bottom corner profile. The labels are do not contain diagonal banners, nor does the full
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`“Gatorade” name appear prominently on the labels. Instead, Gatorade bottles use a white “G” and
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`integrated orange lightning bolt as their most visually prominent and consistent feature:
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`63.
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`PepsiCo’s old Gatorlytes powder pouches feature similar banding to Gatorade, G2 and G
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`Zero, as shown below:
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`64.
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`These pouches are branded with a predominantly silver and gray label, minimized product
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`name and lack of diagonal banners, circular badges or solid color subtitle backgrounds. The most
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`prominent feature, in the largest typeface, is the white “G” with integrated orange lightning bolt,
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`the same as is featured on the rest of the Gatorade family of products, as discussed above.
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`65.
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`In contrast, ELECTROLIT beverages have been sold in a square-shaped bottle for decades
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`and has been sold at least since its introduction into the United States with a diagonal lower left to
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`upper right white banner label with circular badge, solid background subtitles and other distinctive
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`features. These elements became synonymous with the ELECTROLIT brand in the minds of
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`consumers.
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`66.
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`Instead of sticking to its own Gatorade branding and packaging for its new Gatorlyte
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`product, however, PepsiCo abandoned its Gatorade and Gatorlytes packaging and copied the
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`ELECTROLIT brand’s bottle design, shape, and label. As shown in the accompanying pictures,
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`the trade dress for Gatorlyte mimics so many key elements of the unique, distinctive
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`ELECTROLIT trade dress that it cannot be the result of sheer coincidence.
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`67.
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`The square bottle shape of ELECTROLIT beverages is copied in the Gatorlyte product, in
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`contrast with the cylindrical shape of the Gatorade bottle.
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`68.
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`The prominent lower left to upper right diagonal white banner of the ELECTROLIT
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`product label is copied in the Gatorlyte product, down to the proportions, angle, and amount of
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`coverage on the bottle’s flat front face.
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`69.
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`The full recitation of the ELECTROLIT name is copied in Gatorade’s product by recitation
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`of the full Gatorlyte name, in identical scale and placement and overlaid on the same diagonal
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`white banner to the ELECTROLIT name.
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`70.
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`The solid background “Premium Hydration” subtitle on the ELECTROLIT product label
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`is copied in the solid background “Instant Hydration” subtitle on the Gatorlyte label.
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`71.
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`The circular badge on the label of ELECTROLIT products is copied in the label of the
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`Gatorlyte product.
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`72.
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`The placement of the graphic element of an ELECTROLIT trademark is copied in the
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`Gatorlyte label by the placement of the “G” graphic above and to the right of the full product name
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`recitation.
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`73.
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`The multi-color graphic element of an ELECTROLIT trademark is also copied in the
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`Gatorlyte label by the vertically arrayed multi-color graphic element on the side of the Gatorlyte
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`bottle.
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`2
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`74.
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`The ELECTROLIT branded bottle features two grooves circumscribing the bottle at upper
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`and lower portions thereof, the relative positioning and scale of which are copied in the design of
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`the Gatorlyte bottle.
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`Double
`Groove
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`Single
`Groove
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`Single
`Groove
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`75.
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`The profile of the lower portion of the ELECTROLIT branded bottle transitions from
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`gently tapered near the lower groove to a sharper radius at the bottom of the bottle, a design that
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`is copied in the profile of the Gatorlyte bottle.
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`76.
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`In sum, a consumer, undoubtedly familiar with the market-dominant Gatorade brand,
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`would be much more likely to believe (incorrectly) that the Gatorlyte product is affiliated with the
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`ELECTROLIT brand than it is with Gatorade, PepsiCo or any other product of PepsiCo. On
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`information and belief, this confusion is intentionally induced by PepsiCo and a core part of their
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`marketing strategy for Gatorlyte.
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`77.
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`The graphic and design-based elements of the ELECTROLIT Trademarks and Trade Dress
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`take on an increased importance among consumers that do not speak English as a first language,
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`English being the language of both the U.S. ELECTROLIT product label and the Gatorlyte product
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`label. Thus, PepsiCo’s overt targeting of “the Hispanic consumer” in their Gatorlyte marketing
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`efforts, who are more likely than many other consumer groups to not speak English as a first
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`language, makes it even more likely that its copying of the graphic and design elements of the
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`ELECTROLIT Trademarks and Trade Dress causes confusion