While Pepsi staffers were stunned by Justice Bhandari's rejection of their petition for an interim injunction against arch-rival Coke earlier this fortnight, what most people didn't realise is just how much the case means to Pepsi. For Pepsi which has said it plans to appeal this before a division bench of the Delhi High Court, it wasn't just another case of a company trying to prevent its rival from poaching on its staffers and trying to wean away important business partners. Sure there wasthat, but there was a lot more.

Globally, since Roger Enrico took over as Pepsi's world-wide chief a few years ago, the company has increased the scope of the bitter cola-wars to include the courts as well as anti-trust authorities across the globe. In a no-holds barred game where no one's taking any prisoners, Pepsi's increasingly realised that Coke's tremendous lead over it globally -- Coke's global market share is around 55 per cent as against it's 30 per cent -- and its huge cash chest, allows it to simply crush Pepsi in various markets. After apartheid was over in South Africa and Pepsi came back into the market -- Coke operated in South Africa during the apartheid years -- it was convinced it's politically correct behaviour would reap it rich dividends. What it didn't realise was that Coke would price its product so cheap that it was almost free, to drive it out. Coupled with a major strike within a year at its South African plant, Pepsi had no option but to pull out before it bled todeath.

Similarly, when Pepsi had a 84 per cent share in the Venezuelan market, Coke simply went in and bought over its principal bottler Cizneros for $1 bn. Pepsi, whose market share went to zero overnight, went to court over this. Eventually, the International Court of Arbitration awarded $94 mn for the damage this caused to it's business. Pepsi, meanwhile, tied up with a beer bottler, but managed to get back to a market share of under 45 per cent only.Given this, Enrico, the embarassed author of the famous book which prematurely announced Pepsi's victory over Coke by stating The Other Guy Blinked, decided it was time to change tack, to take the war to other courts. Naturally, Justice Bhandari's observations that market place battles can't be decided by courts didn't go down well with Pepsi.

In the Indian case, Pepsi had argued that Coke's attempts to woo its entire sales team at Kanpur, to cite one of many examples in its suit, was really a means of trying to disrupt its business. While the court hasrejected its plea for an interim injunction, the actual case will go on and hearings will begin in November.

As part of its strategy to take Coke to court if need be, Pepsi sued Coke in a US district court in May last year. Pepsi, which sought unspecified damages, accused Coke of monopolising the sales of soft drinks at fountain outlets at restaurant chains, sports arenas and movie theaters by threatening to take away Coke from distributors that carried Pepsi as well. The fountain business is one of the fastest growing segments in the US market (the US market itself is over half the global market). The suit is still pending.

In July, Pepsi followed this with a complaint to Italy's anti-trust regulators, arguing that Coke was blocking access to beverage wholesalers by rewarding them with bonuses and rebates for exclusively stocking Coke these wholesalers were often the main supply sources for outlets such as hotels.

And the month after this, Pepsi stepped up its efforts to get the French government tostop Coke from buying Pernod Ricard's Orangina for $840 mn. Pepsi argued that it had an exclusive distribution agreement with Orangina for drinks consumed outside the home, and that allowing Coke to take over Orangina would cut off Pepsi's sole distribution outlet. Coke then had to re-submit a bid for Orangina, but Pepsi's opposed this again.

And just last month, Pepsi decided to add to Coke's growing troubles with anti-trust authorities in Europe -- they have opposed Coke's moves to buy out Cadbury Schweppes' brands, saying it will create a monopoly -- by complaining that Coke was giving illegal incentives to supermarkets and other retailers to prevent them from stocking rivals products. A few weeks ago, European investigators swooped upon Coke offices in various countries across the continent . Apart from dealing with the EU investigations, Coke has now had to scale back its Schweppes deal dramatically, -- the deal which is just 40 per cent the size of the earlier one, excludes 15 member countries of theEU. It is believed that Pepsi also played a role in Australia's regulators refusing to allow Coke to take over Schweppes brands in the country.

It would, of course, be wrong to automatically conclude that Pepsi's getting a pasting in the market and is therefore going to the courts. If Coke's not going to the courts that's because it's streets ahead of Pepsi. But where it's getting hit, it's going to courts too. In the case of the Gujarat bottling plant, for example, Pepsi bought over the company which earlier used to do Coke's bottling. Coke then went to court, and the court prevented the plant from bottling any beverage other than Coke for a year. Coke obviously did not get anything bottled from the Pepsi-owned plant, but Pepsi had to keep these facilities unutilised for a full year.

It's a war out there, and anything goes. Clearly, this new phase has just begun, and several interesting possibilities will emerge. Internationally, for example, Pepsi filed a case against an employee William Redmond whojoined Quaker Oats' sports drinks division a few years ago. Pepsi argued that Redmond was privy to their trade secrets and must be stopped from joining Oats as he could pass on these to his new employers -- Redmond had also filled a confidentiality agreement with Pepsi. The US Appeals Court for the Seventh Circuit granted Pepsi the injunction they sought.

Pepsi's lawyers are also busy digging up more such cases in other areas such as automobiles where companies have been restrained from hiring senior personnel from competitors, for their court case in November in Delhi. Meanwhile, the EU's investigations into Coke could take upto a year to get completed, and Pepsi looks like it's going to keep appealing to various courts/anti-trust units against Coke. Just a few days ago, it appealed against Coke buying Schweppes' brands in Chile. The cola wars fizz on, though in a different setting.