Pepsi Told To Pay Over A Billion Dollars For 'Stealing' The Idea For Bottled Water

from the the-world-has-gone-mad dept

Ben was the first of a few folks who sent in the story that Pepsi has been told to pay $1.26 billion (with a b) for supposedly “stealing” the idea for filtered bottled water. Seriously. Two men claim they came up with the idea in 1981 to bottle water this way and approached Pepsi distributors with the idea. They say that Pepsi “stole” their trade secrets when it launched a bottled water line, Aquafina. Of course, Aquafina was launched in the mid-nineties, a decade and a half after this conversation supposedly took place. The $1.26 billion is something of a joke as well. It’s a default judgment because a Pepsi secretary apparently forgot to pass on the letter alerting them to the lawsuit, so they didn’t respond. Even so… there’s so much wrong with this. First, $1.26 billion? For the “idea” of filtered bottled water? And for a lawsuit filed nearly thirty years after the alleged conversation? Nearly fifteen years after the product came to market? Yeah, that makes sense…

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Comments on “Pepsi Told To Pay Over A Billion Dollars For 'Stealing' The Idea For Bottled Water”

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90 Comments
Anonymous Coward says:

Re: Re: Coke's The One...

I own several patents on vending machine toilets.

To complete my masterful plan, all I need to do is convince companies that toilets (like water fountains) are an un-needed expense that shouldn’t be paid for by the company. As a result, I will sell portable single-use toilets at point-of-purchase displays everywhere.

All I need to do is convince the masses (like Charles Joyce and James Voigt did with water) that toiletries are a right and not a privilege and should be paid for either through my vending machine or through my lawfully approved point of purchase products, and also jam through congress a bill to strengthen fines for public indecency.

I will be rich! Rich I tells ya! Buhahaha!

Anonymous Coward says:

Re: Re: Re:2 Coke's The One...

Do not mock me! My plan is perfect and in it’s final stages. All I need to do is find the biggest pushover in Congress to stiffen the public indecency fines, but there are so many choices!

All your pee belong to me. 25% royalty on 25 cents per wee, times three a day, times 300M people.

The best part is that coffee houses will get them installed for FREE to attract customers into their stores.

Don’t you know what success smells like?? It smells like a QUADZILLIONARE! ME!

Anonymous Coward says:

Re: Re: Re:4 Coke's The One...

It may smell, but the money still spends, oh yes it spends!

“Read the Terms & Conditions before using this facility”

In five years, we’ll also get a DEA grant that will allow us to branch out and also install water sampling equipment to test for drug use which will be available to your employer for a small fee! It will be like redlight cams, but you’ll never know what hit you until it’s too late!

RICH! YES! RICH! Bahaha!

Anonymous Coward says:

Re: Re: Re:2 Coke's The One...

Don’t Piss on my idea!

I’m schlepping it to Boehner next week! I’m told all I need to do is show up with a wheelbarrow full of cash and he’ll say whatever I want him to!

Boy, he’ll be surprised when it’s not money, but a wheelbarrow full of wee! He’ll just have to imagine it as Moolah!

Aaah. The smell of cash!!

roxanneadams (profile) says:

I was telling a friend of mine the other day how bottled water in 3 gallon jugs has been sold via home delivery in Los Angeles for more than 100 years. From living back east, he didn’t remember a similiar service, but he did recall clearly that relatives of his were buying small bottles of water by the case, as far back as the early 1960’s. It was fashionable among the upper-middle-class Easterners. So bottled water is neither new nor revolutionary and it existed long before 1981.

Anonymous Coward says:

“Even so… there’s so much wrong with this. First, $1.26 billion? For the “idea” of filtered bottled water? And for a lawsuit filed nearly thirty years after the alleged conversation? Nearly fifteen years after the product came to market? …”

What exactly is wrong with this ? – $1.26 billion for a company which has so much respect for the law they don’t even show up in court ? Did the excuse “I just forgot…” or “the dog ate it” ever excuse you your homework from school ?.
Filtered bottled water is not obvious – who would have thought that Americans are dumb enough to pay such a huge premium for a water product they can get from the tap in their homes (and only Americans do that – it failed in Europe).
Suing years after the infringement is not uncommon and there are lots of possible reasons for that.

Mike Masnick (profile) says:

Re: Re:

What exactly is wrong with this ? – $1.26 billion for a company which has so much respect for the law they don’t even show up in court ?

No, $1.26 billion for an *idea*.

Did the excuse “I just forgot…” or “the dog ate it” ever excuse you your homework from school ?.

No doubt, Pepsi screwed up in not showing up, but not showing up doesn’t justify the award.

Filtered bottled water is not obvious

Are you really insisting that these two guys were the only ones who came up with it?

who would have thought that Americans are dumb enough to pay such a huge premium for a water product they can get from the tap in their homes (and only Americans do that – it failed in Europe).

Perhaps that’s because of the *marketing* not the idea.

Suing years after the infringement is not uncommon and there are lots of possible reasons for that.

Name one.

Anonymous Coward says:

Re: Re: Re:

“No, $1.26 billion for an *idea*.”
No it’s a default judgment against the party that doesn’t show, not an evaluation of the idea.

“…doesn’t justify the award.”
Yes it does – contempt for the legal system is serious, and the default judgment follows the rules.

“Are you really insisting that these two guys were the only ones who came up with it?”
You only need to be first not the “only”, and that is for the parties to the lawsuit to show not me.

“Name one.”
Do your own homework it’s not difficult – or did you just forget ?.

AC says:

Re: Re: Re: Re:

You only need to be first not the “only”, and that is for the parties to the lawsuit to show not me.

I hate to point out something that other people have pointed out, but these two yahoo’s are not the first to have the idea.

Aside from Perrier, Evian has been selling bottled water since the early 1900’s, and they have been selling water in plastic bottles since the late 1960’s. It’s difficult to believe that two guys in the 80’s came up with the idea.

Jason (profile) says:

Re: Re: Re: Re:

A default judgment has NOTHING to do with contempt. It’s simply there to make the process efficient. A default judgment is strictly a procedural matter, and so is a motion and order to vacate a default judgment.

Also, Pepsi, like any other public corporation is required by law to have an agent for service of court documents in any state in which it does business. So, if these dopes just dropped it on a secretary’s desk instead of doing the due diligence to locate the listed agent for service, then service was improperly performed, which would more than validate a motion to vacate judgment.

Once that happens then the case begins in earnest. So before you go off half-cocked ranting about Pepsi’s deep-seated contempt for all that is just and good, try to learn a little about what the hell you’re talking about first.

TxLegalBegal (profile) says:

Re: Re: Re:2 Re:

First…know your facts of the case, before you respond. Service WAS completed on the registered agent for Pepsi. The agent forwarded the summons to the company’s Headquaters. The seceratary laid the Federal Summons to the side and never informed anyone of the fact.
Pepsi is them served with Lawful notice of the Judgment by Default…and then they want to scream, “we had no notice.”
Sorry, Federal Court is so much different than state courts. See, the Court would not have Granted the Default Judgment without Proof of proper service.
All Pepsi can do is…1) try to settle out of court with the plaintiff’s, 2) put the Seceratary on a Longggggggg vacation, and 3) find their Registered Agent, buy a new rope and hang him.
How hard could it have been to FAX the summons over to the Company’s Lawyers and then mail it to them overnight?

Brian (profile) says:

Re: Re: Re: Re:

“You only need to be first not the “only”, and that is for the parties to the lawsuit to show not me.”

If you read even some of these comments you would have seen several bottled water companies named that have been doing this since the late 1800’s and early 1900’s. So they were first.

“Do your own homework it’s not difficult – or did you just forget ?.”

No homework has been done and one cannot be found, you use this line because you know there is not a case in which this is true and therefor have to try and insult others instead.

Anonymous Coward says:

Re: Re:

“Filtered bottled water is not obvious”

and this is the mentality of intellectual property maximists. They think that EVERY idea is non obvious and that ALL ideas deserve monopoly rents.

This is just more evidence that intellectual property is not about what’s best for society but it’s about giving special interest groups more control over the masses.

Jason (profile) says:

Re: Re: Re:2 Re:

Ah, without a patent, the only way that this trade secret could obligate Pepsi is if they had agreed upfront not to use the idea independent of a contract with the water bottle geniuses. Then it would be a contractual obligation and the word trade secret would actually have legal force here.

EXCEPT, the statute of limitations on the contract would have run a long, long, longlonglong, long time ago.

Jason (profile) says:

Re: Re: Re:4 Re:

Well, I should have specified, but actually yes, there are many statutes of limitation and some do apply to contract law. Of course this depends upon the specific civil code and jurisdiction that the case is filed in.

In California for instance, it’s two years for an oral agreement and 4 years for a written one.

Jason (profile) says:

Re: Re: Re:4 Re:

The idea is that there are all sorts of reasons why it is not worth it for the court to try a matter after an extended period (which is usually prescribed in the civil code of procedure): diminishing quality of evidence and passive ratification being two major factors.

Basically, you can’t expect the court to try 30 year old evidence on a tort that you sat around and waited a good 15 years to pile up damages on, when it’s pretty clear to everybody that you should have spoken up way back when. At some point they’re going to say you’ve done nothing about it for too long.

There are exceptions. I don’t you’ll find them in this case.

Willton says:

Re: Re: Re:4 Re:

Umm, I don’t think “the statute of limitations” generally covers contracts.

Then you think wrong. Damn near every civil cause of action has a statute of limitations tied to it, breach of contract inclusive. Even first year law students know that a failure to timely file a cause of action within the “SoL” will create a defense to enforcement. Feel free to look up the statutes of limitations in your local jurisdiction.

Anonymous Coward says:

Re: Re: Re:5 Re:

Then you think wrong. Damn near every civil cause of action has a statute of limitations tied to it, breach of contract inclusive. Even first year law students know that a failure to timely file a cause of action within the “SoL” will create a defense to enforcement. Feel free to look up the statutes of limitations in your local jurisdiction.

Hey Wilton,
Why are you such an asshole? The poster already admitted he was mistaken before you went off on him. What, you smelled blood in the water and just couldn’t resist? Typical lawyer, you are.

Anonymous Coward says:

Re: Re: Re:6 Re:

Hey Wilton,
Why are you such an asshole? The poster already admitted he was mistaken before you went off on him. What, you smelled blood in the water and just couldn’t resist? Typical lawyer, you are.

Yep. Best I remember, he works for the entertainment industry. So you better be careful calling him names or anything because he probably covert gov’t connections.

Willton says:

Re: Re: Re:2 Re:

But this is just more evidence of how broken intellectual property laws are.

No it’s not. It’s just evidence of how dumb some litigants can be.

Moreover, I find it very specious of you to claim that this is evident of broken IP laws when you don’t even know the identity or the content of the IP law that is being asserted in this case.

ChurchHatesTucker (profile) says:

Re: Re:

“Filtered bottled water is not obvious – who would have thought that Americans are dumb enough to pay such a huge premium for a water product they can get from the tap in their homes (and only Americans do that – it failed in Europe).”

One, filtering water that you plan to put in bottles and sell at a later date is pretty much the high water mark (pardon the pun) of obvious. Unless you’re selling algae as a health food, that is.

Two, Bottled water failed in Europe? You haven’t actually been there, have you?

John Fenderson (profile) says:

Re: Re:

“Filtered bottled water is not obvious”

Umm, what? It seem patently obvious to me, no pun intended.

Beside, the prior art is copious. I remember being able to buy filtered bottled water in the early seventies. I remember reading instruction in a science experiment book written in the ’40s where they recommended purchasing bottles of filtered water for some of the experiments.

So, even if not obvious, it’s been around for a very, very long time.

Chris Maresca (profile) says:

Re: Re:

Er, I lived in Europe for almost 20 years. Bottled water was FAR more popular in Europe and existed way before it ever appeared in the US. I was always surprised at the lack of bottled water in the US in the 1970’s and 1980’s. Just look up brands like Spa, Vittle, Evian and, as someone else mentioned, Perrier. They’ve been around for a century or more.

I would actually go so far as to say that bottled water, the kind that is portable, not in 3 gallon jugs, was almost invited in Europe it’s such a common staple. In fact, to this day if you go a restaurant, they will ask you if you want a bottle of water, something I’ve never even encountered in the US.

Jason (profile) says:

Re: gotta love default judgements

A default judgment means there wasn’t even a hearing or trial to appear at. For a default to be entered, there would have been no responsive pleadings filed (answer, response, demurrer, etc).

A default judgment generally does not require an appeal, especially when there’s a deficiency in service. The likely procedure would be a motion to vacate the default judgment based upon the service deficiency, followed by the appropriate responsive pleading. At that point the case goes forward as though the default was never entered.

Disclaimer, I am not a lawyer. I am definitely not your lawyer.

ChurchHatesTucker (profile) says:

Re: Re:

“Pepsi can’t blame anyone but themselves. They probably could have sent the most retarded lawyer they could find and won the case if only they showed up.”

Yeah, y’know what? If that’s the case, when the case was presented you’d think the judge would have dismissed it as being “just plain silly” (I’m assuming there’s a legal term that corresponds to that, although I have to admit I’ve seen no evidence so far.)

Jason (profile) says:

Re: Re: Re:

No, in a default jugdment, the case doesn’t get ‘presented’ other than in the original filings. Default means there was no answer filed and the plaintiff wins by,…tada, default.

The general rule of procedure in an adversarial court system is that the court does not act of it’s own initiative except in very specific situations. If there is not a responsive filing to initiate the court’s denial of a default, then in most cases, only a clear procedural deficiency would prevent the default from being entered.

I am not a lawyer. I just correct their mistakes. I am definitely not your lawyer, so you are responsible for your own actions.

iamtheky (profile) says:

http://www.calistogawater.com/History.aspx

starting in 1920 and refining a business model 50 years later to maximize profits, sounds like some damn prior art. And eliminates the “thats just some europeans dipping milk bottles in the glacier water, so its not filtered” argument.

I would imagine this gets filtered somewhere along the line because holding buckets over the geyser would burn a bit and make for some gritty, chunky water.

Chicago auto insurance (user link) says:

I’m not sure how many of the comments are of devil’s advocacy and how many are attempting to start flame wars but seriously $1.26 Billion for a soft case (at best) for the idea of bottled water. The guys that filed I’m sure are now hoping to get a great settlement and move along. Pepsi should have showed up but the courts should be more credible.

The birds the word says:

Oink, my belt just broke!!!!

Judge Judy must have been presiding over this case.
If someone from Pepsi had actually shown up, and it was a male, it probably would have cost Pepsi another 3.2 billion.

What kind of system has a default judgment amount that high.
I think I will sue Pepsi for shitty tasting product, and when they don’t show up I will get a nice cool 1.26 Billion deposited to my Swiss Bank account.

What an f’d up world we live in

Anonymous Coward says:

It's not about "bottling" the water

Just to clarify an issue that is being overlooked. I don’t think the question is about “bottling” the water. In fact, it’s about how to make money without “bottling” the water. If you look at how companies like Pepsi and Coke make the bulk of their money, it’s in selling things like the “syrup” that goes into making Pepsi to places that actually make it (even though some of the bottle plants are in fact owned by the parent). This was one of the “challenges” they faced, as in “what do I ‘sell’ someone to make water?”

I forget who did what, but if I recall, each took their own path (my recollection here is sparse, so the details may be off). One sells a “filter” they require bottlers to use (and thus make the money off the filter). The other sells an “additive” (e.g. minerals, etc.).

Admittedly, I’ve not read the legal brief, but my guess is the suit is over the process/mechanism that a company like Coke/Pepsi could use with their business model (relying on others to “finish” the products) in “selling water”. This is notable different than just putting some water in a bottle. (Although it really makes you wonder “why” such hoops need to be invented in the first place.)

I’ll leave the discussion as to whether or not the suit has merit to others, but figured a better understanding of the process might help a more informed view.

Anonymous Coward says:

Re: Dehydrated water

Actually the cure to dehydration is water so the FDA needs to ban water and give it control to pharmaceutical corporations. They can get a patent on it and sell it in pill form. Then we’ll all be better off.

And for justification they can do some research and development on water and its benefits and claim that all that R&D justifies them getting a patent on water.

Cowardace Male says:

C'mon

To all that would defend these two imbeciles:

If you really believe that they deserve this much money why are we not all getting together, finding a friend that works as a highly ranking secretary and suing the pants off their company?

C’mon think about it, so 2 yahoo’s and a shitty secretary splitting 1.26 BILLION 3 ways?…seems motive to lie to me.

Again, if you are defending these two you obviously need a lesson in common sense, what they’re doing is appalling and it’s a tragedy if they even see 1 penny.

Unbelievable how people from other parts of the world want to come to America for a chance to work for a good life, people born into America think they’re privileged, don’t need to work, and need to find a way to rob a bank or scam the system.

^sorry for the rant, I know most of us are in the working class and have no intentions of scamming people/companies, just a generalized rant of the people in this country.

/soapbox

Anonymous Coward says:

Wait a second here... Pepsi buys North America Bev Distribution...

I just dug a little deeper, and it appears that a company called Wis-Pack (one of the two listed plaintiffs) is currently active in bottling and distribution of Aquafina for Pepsi.

“Total there are 34 WisPak shareholders representing 52 franchises throughout Wisconsin, Minnesota, Illinois, Iowa, Indiana, Missouri, Michigan, Kansas, Nebraska, and North and South Dakota.”

“We are proud to distribute Aquafina and Klarbrunn water in a variety of packages.”

http://www.manta.com/company/mmncrsx
http://www.wis-pak.com/
http://www.tmqc2.info/index.php?option=com_content&task=view&id=12&Itemid=40

I bet there’s more to this story because the EU announced that PepsiCo was cleared to purchase bottling and arms across 80% of North America. Perhaps these regional bottlers were shown the door and lost distribution rights..?

http://wiadomosci.onet.pl/2067321,10,eu_clears_pepsico_to_buy_pepsi_bottling_group,item.html

Anonymous Coward says:

Re: Wait a second here... Pepsi buys North America Bev Distribution...

You’re off by a little. It seems the agreement was between Charles & James v Wis-Pak & Carolina Canners. Pepsi was also thrown into suit but simply didn’t respond.

According to the complaint filed by Charles A. Joyce and James R. Voigt on April 28, 2009, they entered into a confidentiality agreement in 1981 with Arnold E. Fobes, then the vice president and general manager of Wis-Pak, Inc. and Carolina Canners, Inc., regarding a product idea referred to as “U.P.”

“U.P.,” according to the complaint, is bottled water, and has since been marketed by Pepsi as Aquafina: “The Defendants have used the Plaintiffs’ U.P. trade secret for the benefit of themselves in the manufacture, distribution and sale of Aquafina and such use constitutes misappropriation of Plaintiffs’ trade secret.”

Wis-Pak and Carolina Canners answered the complaint, but Pepsi did not.


Source:
http://wislawjournal.com/article.cfm/2009/11/02/126-billion-default-judgment-entered-against-Pepsi-Pepsi-seeking-to-vacate-judgment

jjones444 (profile) says:

Love these guys. I wish I could sue Pepsi for stealing my idea. The idea of bottled water was bound to come around sooner or later. The military had already had plastic canteens for their members out in battle, and the shape of the Aquafina bottle isn’t anything new. So what are these guys trying to sue over? If it were possible to sue for this, the line for suing would be out the door.

Shyloh Jacobs (user link) says:

Interesting

Wow, that makes perfect sense! Don’t you think that the lawsuit should have been filed at least within a year of the product launching? That’s like hiring roofing contractors and complaining twenty years later about a leak and wanting them to replace everything that has had water damage over the past twenty years. Sometimes people make me laugh.

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