On June 4, 2018, U.S. District Judge Vincent L. Briccetti in the Southern District of New York refused to dismiss a Connecticut advertising agency's claim that Pepsi stole a pitch for a Super Bowl ad that it had made to Pepsi in 2017.
PepsiCo Inc. signed a three-year preliminary agreement in 2014 with Betty Inc. (the Connecticut advertising agency), during which time PepsiCo reviewed Betty's idea of a jukebox and superhero-like character moving through rooms and changing outfits and dance styles, but instead of using Betty's idea, Pepsi had another advertising agency produce the commercial. Betty alleges PepsiCo failed to negotiate for the use of Betty's marketing services, and the Judge agreed that Betty's allegations were sufficient to state a claim for breach of contract to negotiate in good faith.
Judge Briccetti acknowledged that Betty had sufficiently proved the contract between them and Pepsi which included negotiations for future projects, and imposed clear obligations on the ad agency such as nondisclosure provisions and prohibitions on soliciting business from Pepsi competitors. Further, other provisions in the agreement included that Betty would use its best effort to further the company's interests. The plaintiff alleges PepsiCo breached this agreement by taking Betty's idea.
The case is Betty Inc. v. PepsiCo Inc., case number 7:16-cv-04215, in the U.S. District Court for the Southern District of New York.