The article states that Powerade ION4 is the specific brand in question here. Apparently, Coke has advertised claims saying that the formulation on ION4 is superior to Gatorade's composition. Coke's tagline says that Gatorade is "incomplete" compared to this Powerade concoction. PepsiCo thinks this is so egregiously deceptive that it has filed a lawsuit to protect the equity of Gatorade's name and reputation.

Okay, let me say right up front that I own shares of Coke and thus I'm obviously potentially biased on this subject, but I personally don't think that PepsiCo has a case. Doesn't Coke have the right to an opinion? Every company thinks its product is better than what is being distributed by the competition. If Coke thinks that the chemistry behind its drink is better, I would assume that it would be all right to put forth such a belief. It's not as if Coke is claiming that drinking Powerade will allow you to live forever!

I'm not a lawyer. However, I checked out Coke's Powerade website. As far as I'm concerned, Coke is merely trying to point out that its formulation has an edge. Why should PepsiCo whine over this subject? If I were PepsiCo, I simply would fight back with sharp, creative advertising that argues that Coke's claims aren't worth much at all.

Of course, we all know why PepsiCo is engaging the courts. Sales of carbonated drinks have flattened (no pun intended), and beverage companies are looking to other categories of refreshment such as water, juices, and sports elixirs to make up for the lack of growth in the flagship products.

Gatorade is without a doubt the big name in the arena of sports beverages. It owns 77% of that market, while Coke's Powerade has 22%. Coke wants Powerade to grow; PepsiCo wants to make sure it doesn't. PepsiCo, in my opinion, is getting a little too sensitive. I can see why Coke is getting aggressive. Like I said before, I own shares of Coke. You know, I practically beg my friends to either switch to Powerade or, at the very least, sample it. I usually fail every single time at bat. Gatorade is like the Holy Grail to sports enthusiasts. This is what the war is all about: Powerade wants to increase its brand equity while Gatorade wants to suppress it.

Completely understandable. But a lawsuit? I think PepsiCo is all wet here, but we'll have to see how this plays out. While this is actually a very important issue for both sides, I don't think we'll see any fallout effect in terms of the stocks involved. If you own shares of PepsiCo and/or Coke, there's no need to do anything about them. If you're thinking of potentially starting a position in one of these companies, you can take the lawsuit into account, certainly, but I really don't think it's going to make much of a difference.

Disclosure: I own Coke; positions can change without notice.