Throwing Stones From Glass Houses: POM Wonderful's Futile Lawsuit Against Coke

Last Updated Aug 2, 2010 8:35 PM EDT

A California judge's ruling against POM Wonderful, the independently-owned seller of pomegranate juice, in its lawsuit against Coca-Cola (KO) highlights the futility of trying to prevent competitors from stealing your market by suing them. POM Wonderful, which pioneered the pomegranate juice business but has watched its market slide as bigger competitors have pounced, is accusing Coke of misleading consumers with its Minute Maid Pomegranate Blueberry 100% Fruit Juice Blend, which contains minimal actual pomegranate and blueberry juice.

It would be one thing if this suit were an isolated legal scuffle. But POM Wonderful has tried to sue the pants off nearly all of its competitors, filing similar false advertising lawsuits against PepsiCo's Tropicana, Ocean Spray and Purely Juice. The company is even suing its former Washington law firm in a billing dispute, which led to POM requesting, and getting, a restraining order against the National Law Journal, barring the publication from writing about a federal agency that's pursing an inquiry into POM.

The problem with lawsuits against your competitors, besides making you look like a sore loser, is that even when you win -- POM got Purely to pay it over $1 million -- they don't get you very far. Forcing other companies to hand over cash or change the wording on their packaging does almost nothing to help grow sales and build a sustainable business.

And POM's love for litigation wouldn't look so ridiculous if the company itself hadn't been accused of deceptive marketing. In February, the FDA sent POM Wonderful a letter accusing them of making outlandish and illegal claims about the health benefits of its pomegranate juice.

The agency cited information on the company's web site that touted pomegranate juice's ability to help alleviate everything from atherosclerosis and erectile dysfunction to its being safe for diabetics, even though the juice has as much sugar as soda (although, to be fair, it's naturally occurring sugar from the fruit). Much of POM's marketing has centered around bold claims about the incredible health benefits of pomegranate juice ("Cheat Death," one ad promised; "health in a bottle," the web site alleges).

The Coke case is still in the courts, though Judge S. James Otero recently kicked the legs out from under POM's legal case in granting Coke's motion for summary judgment. Minute Maid's naming and labeling is, he said, in adherence with FDA regulations because the package clearly states that the drink is a blend of several juices, though POM alleges the lettering is too small.

POM is right that Minute Maid's drink is a mere suggestion of pomegranate juice. Mostly it's cheaper apple and grape juice, with only 0.3% pomegranate juice and 0.2% blueberry juice. POM's products are 100% pomegranate juice and thus cost more than Coke's. But litigation isn't the right strategy for solving this problem.

POM appears to have forgotten any lessons it learned about the persuasive power of marketing. In the mid 2000's, the company's clever advertising and consistent marketing turned a previously unknown drink into a stylish, recognizable beverage. Now, instead of finding interesting ways to let consumers know that POM is the more authentic choice, the company is has gone court crazy.

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