Pepsi Settles Secret Recipe Suit With Inventor’s Heirs

Pepsi Settles Secret Recipe Suit With Inventor’s Heirs by Richard Vanderford, additional reporting by Bill Donahue, editing by Eydie Cubarrubia, March 18, 2013, Law360
The lawsuit over who controls a secret recipe once used to brew Pepsi cola has fizzled, thanks to a settlement between PepsiCo Inc. and the drink formula inventor’s heirs, a New York federal judge said Monday. U.S. District Judge Jesse Furman dismissed a lawsuit brought by children of Richard Ritchie, who created the formula for Pepsi in 1931, saying the two sides had reached an agreement. … Ritchie’s children claimed they owned several documents containing Pepsi’s 1931 recipe — which has since been changed — and that they had the right to disclose them. Pepsi had argued that a nondisclosure agreement Ritchie signed in 1951, and honored until his death in 1985, bound the family. …

In their lawsuit, filed in May 2012, Ritchie’s children claimed PepsiCo threatened to sue them for stealing trade secrets if they published or released the documents describing his invention. They claimed their father never signed the info over to Pepsi. 

Joan Ritchie Silleck and Robert Ritchie asked the court for a declaration that they not only owned the documents, but that their right to release the “historically significant” information was protected by the First Amendment. 

“The heirs seek to eliminate any doubt that [the documents] are their personal property … which they may freely share with historians, collectors, journalists and television and film producers, and ultimately members of the interested public, to tell their father’s extraordinary life story without interference of the threat of litigation,” the Ritchie children said.

And even if the formula was a trade secret, the complaint said, the court should declare that Ritchie kids have a First Amendment right to release the info before Pepsi can “successfully stifle public access to and historical appreciation of Mr. Ritchie’s complete life story, including the genesis of his most successful invention.”

The heirs said Ritchie developed the Pepsi recipe in 1931 while working for Loft Inc., a separate candy company run by Pepsi owner Charles Guth. Ritchie didn’t become a Pepsi employee until 1939, when the two companies were folded into a single entity — long after he created the formula-bearing documents, they said. Ritchie left the soda company in 1951 and signed an agreement whereby he would not voluntarily disclose the formula to a rival beverage company, but the pact said nothing about his heirs and their use of any property they inherited from their father, according to the lawsuit. The plaintiffs also said the agreement contained no language requiring Ritchie to return any documents or even asking him to tell Pepsi whether he had any confidential documents when he left the company.

A third son — Richard James Ritchie, who died in late 2011— discovered the documents when cleaning out boxes in his basement in 2008, the heirs said. When he contacted Pepsi to discuss the historical significance of his find, the company allegedly demanded he hand them over and threatened litigation if he went public. [Emphasis added]

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