PEPSICO, FCB SETTLEMENT TALKS APPARENTLY GO NOWHERE

Both Sides Prepare for Injunction Hearings

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CHICAGO (AdAge.com) -- Three hours of settlement discussions today did little to resolve the rift between PepsiCo's Quaker Oats Co. and its former agency, Foote, Cone & Belding Worldwide.

"Nothing has changed," said lawyers after the hearing.

Brendan Ryan, president of Interpublic Group of Cos.' FCB, and Dana Anderson, president-CEO of FCB, Chicago, were among the 10 lawyers and executives who met in the closed-door session with U.S. District Court Judge James F. Holderman.

Neither side would discuss the content or outcome of the meeting.

Two hearings
The dispute

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now will continue at a Dec. 11 federal preliminary injunction hearing to determine whether the court should block FCB from working on Coca-Cola Co.'s Powerade, the chief rival of Quaker Oat's Gatorade.

Additionally, PepsiCo and FCB will square off again Dec. 13 in Cook County, Ill., Circuit Court for a separate preliminary injunction hearing to decide whether FCB can handle Coca-Cola's Dasani bottled water brand.

PepsiCo in September pulled its $350 million Gatorade, Aquafina and Tropicana orange juice assignments out of FCB, after Interpublic, long affiliated with Coca-Cola, acquired FCB's parent, True North Communications.

Those PepsiCo brands have now been housed with Omnicom Group, which recruited former FCB Chicago President Brian Williams to head up a new agency to service the brands.

Flurry of lawsuits
FCB in October dropped a lawsuit it filed against Mr. Williams and Omnicom after the case was dismissed. PepsiCo quickly responded with a suit of its own, and on Nov. 2 Pepsi won a temporary restraining order barring four FCB employees from working on Dasani until that case is otherwise resolved.

A week later, Coca-Cola announced it would temporarily return the two brands to their original agencies -- Dasani with Berlin, Cameron & Partners, New York, and Powerade at Wieden & Kennedy, Portland, Ore. -- pending the outcome of the litigation.

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