Pepsi is concerned that the name of Coke drink Ipsei, which carries the strapline "Think what you drink", bears a remarkable similarity to its own name and may pursue legal action.
Ipsei, which is already available in the Netherlands and Germany, is a mixture of water, grape juice, vitamins and herbal tea. Although it is not yet available in the UK, Coke has already made moves to prepare the brand for a UK launch, including applying for a UK trademark.
According to a report in the Mail on Sunday, Coke spent last week asking people who work in the Royal Courts of Justice what they thought of the Ipsei brand name.
Apparently the company told people that Pepsi has already conducted research among 200 people, who said that the name reminded them of Pepsi.
The name Ipsei is derived from the Latin word "ipse", meaning self.
In July, Coca-Cola was voted the world's number one brand for the fourth consecutive years in a survey by brand consultancy Interbrand. It is estimated that it is worth £39bn.
The company takes a global approach to brand extensions and marketing and two weeks ago, it held a meeting in Paris with ad agencies to help it develop a "big" advertising idea to form the basis of a global advertising campaign.
In addition to asking for concepts for the main brand, Coke is also asking the agencies to present "iconic" ideas to promote its other drinks brands.
As part of that strategy in the UK, the company is embarking on an umbrella campaign created by Vallance Carruthers Coleman Priest. The ads will promote all Coke's 19 brands using the slogan "World of Refreshment".
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