{"id":18715,"date":"2026-03-30T08:56:00","date_gmt":"2026-03-30T06:56:00","guid":{"rendered":"https:\/\/www.legalmondo.com\/?p=18715"},"modified":"2026-03-30T08:55:19","modified_gmt":"2026-03-30T06:55:19","slug":"international-distribution-agreements-key-clauses-lessons-learned-history-nike","status":"publish","type":"post","link":"https:\/\/www.legalmondo.com\/pt-pt\/2026\/03\/international-distribution-agreements-key-clauses-lessons-learned-history-nike\/","title":{"rendered":"International distribution agreements | Key Clauses and Lessons learned from the history of Nike"},"content":{"rendered":"<h2><strong>Summary<\/strong><\/h2>\n<blockquote>\n<p style=\"text-align: justify;\">Phil Knight, the founder of Nike, imported the Japanese brand Onitsuka Tiger into the US market in 1964 and quickly gained a 70% share. When Knight learned Onitsuka was looking for another distributor, he created the Nike brand. This led to two lawsuits between the two companies, but Nike eventually won and became the most successful sportswear brand in the world. This article looks at the lessons to be learned from the dispute, such as how to negotiate an international distribution agreement, contractual exclusivity, minimum turnover clauses, duration of the contract, ownership of trademarks, dispute resolution clauses, and more.<\/p>\n<\/blockquote>\n<h2><strong>What I\u00a0talk about\u00a0in this article<\/strong><\/h2>\n<ul>\n<li><span data-contrast=\"auto\">The Blue Ribbon vs. Onitsuka Tiger dispute and the birth of Nike<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<li><span data-contrast=\"auto\">How to negotiate an international distribution agreement<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<li><span data-contrast=\"auto\">Contractual exclusivity in a commercial distribution agreement<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<li>Minimum Turnover clauses in distribution contracts<\/li>\n<li><span data-contrast=\"auto\">Duration of the contract and the notice period for termination <\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<li><span data-contrast=\"auto\">Ownership of trademarks in commercial distribution<\/span><span data-ccp-props=\"{}\"> contracts<\/span><\/li>\n<li><span data-contrast=\"auto\">The importance of mediation in international commercial distribution agreements<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<li><span data-contrast=\"auto\">Dispute resolution<\/span><span data-ccp-props=\"{}\"> clauses in international contracts<\/span><\/li>\n<li><span data-contrast=\"auto\">How we can help you<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<\/ul>\n<h2 aria-level=\"1\"><strong>The\u00a0Blue Ribbon\u00a0vs Onitsuka Tiger dispute and the birth of Nike<\/strong><\/h2>\n<p><span data-contrast=\"auto\">Why is the most famous sportswear brand in the world Nike and not Onitsuka Tiger?<\/span><span data-ccp-props=\"{&quot;335551550&quot;:6,&quot;335551620&quot;:6}\"><br \/>\n<\/span><span data-contrast=\"auto\">Shoe Dog is the biography of the creator of Nike, Phil Knight: for lovers of the genre, but not only, the book is really very\u00a0<\/span><span data-contrast=\"auto\">good<\/span><span data-contrast=\"auto\">\u00a0and I recommend reading it.<\/span><span data-ccp-props=\"{&quot;335551550&quot;:6,&quot;335551620&quot;:6}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Moved by his passion for running and intuition that there was a space in the American athletic shoe market, at the time dominated by Adidas, Knight was the first, in 1964, to import into the U.S. a brand of Japanese athletic shoes, Onitsuka Tiger, coming to conquer in 6 years a 70% share of the market.<\/span><span data-ccp-props=\"{&quot;335551550&quot;:6,&quot;335551620&quot;:6}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">The company founded by Knight and his former college track coach, Bill Bowerman, was called Blue Ribbon Sports.<\/span><span data-ccp-props=\"{&quot;335551550&quot;:6,&quot;335551620&quot;:6}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">The business relationship between Blue Ribbon-Nike and the Japanese manufacturer Onitsuka Tiger was, from the beginning, very turbulent, despite the fact that sales of the shoes in the U.S. were going very well and the prospects for growth were positive.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">When, shortly after having renewed the contract with the Japanese manufacturer, Knight learned that Onitsuka was looking for another distributor in the U.S., fearing to be cut out of the market, he decided to look for another supplier in Japan and create his own brand, Nike.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-18726 \" src=\"https:\/\/www.legalmondo.com\/wp-content\/uploads\/2021\/02\/SHOES-FOR-FALL-FROM-BRS-e1614288655323.jpg\" alt=\"shoes\" width=\"333\" height=\"432\" srcset=\"https:\/\/www.legalmondo.com\/wp-content\/uploads\/2021\/02\/SHOES-FOR-FALL-FROM-BRS-e1614288655323.jpg 616w, https:\/\/www.legalmondo.com\/wp-content\/uploads\/2021\/02\/SHOES-FOR-FALL-FROM-BRS-e1614288655323-600x779.jpg 600w\" sizes=\"auto, (max-width: 333px) 100vw, 333px\" \/><\/p>\n<p><span data-contrast=\"auto\">Upon learning of the Nike project,\u00a0<\/span><b><span data-contrast=\"auto\">the Japanese manufacturer challenged Blue Ribbon for violation of the non-competition agreement<\/span><\/b><span data-contrast=\"auto\">, which prohibited the distributor from importing other products manufactured in Japan, declaring\u00a0<\/span><span data-contrast=\"auto\">the\u00a0<\/span><span data-contrast=\"auto\">immediate termination of the\u00a0<\/span><span data-contrast=\"auto\">agreement.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">In turn,\u00a0<\/span><b><span data-contrast=\"auto\">Blue Ribbon argued that the breach would be Onitsuka Tiger&#8217;s<\/span><\/b><span data-contrast=\"auto\">, which had started meeting other potential distributors when the contract was still in force and the business was very positive.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">This resulted in two lawsuits, one in Japan and one in the U.S., which could have put a premature end to Nike&#8217;s history.\u00a0\u00a0<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Fortunately (for Nike) the American judge ruled in favor of the distributor and the dispute was closed with a settlement: Nike thus began the journey that would lead it 15 years later to become the most important sporting goods brand in the world.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Let&#8217;s see what Nike&#8217;s history teaches us and what mistakes should be avoided in an international distribution contract.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<h2 aria-level=\"1\"><strong>How to negotiate an international commercial distribution\u00a0agreement\u00a0<\/strong><\/h2>\n<p><span data-contrast=\"auto\">In his biography, Knight writes that\u00a0<\/span><b><span data-contrast=\"auto\">he soon regretted tying the future of his company to a hastily written, few-line commercial agreement<\/span><\/b><span data-contrast=\"auto\">\u00a0at the end of a meeting to negotiate the renewal of the distribution contract.\u00a0<\/span><span data-ccp-props=\"{&quot;335551550&quot;:6,&quot;335551620&quot;:6}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">What did this agreement contain?<\/span><span data-ccp-props=\"{&quot;335551550&quot;:6,&quot;335551620&quot;:6}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">The agreement only provided for the renewal of Blue Ribbon&#8217;s right to distribute products exclusively in the USA for another three years.<\/span><span data-ccp-props=\"{&quot;335551550&quot;:6,&quot;335551620&quot;:6}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">It often happens that international distribution contracts are entrusted to verbal agreements or very simple contracts of short duration: the explanation that is usually given is that in this way it is possible to test the commercial relationship, without binding too much to the counterpart.<\/span><span data-ccp-props=\"{&quot;335551550&quot;:6,&quot;335551620&quot;:6}\">\u00a0<\/span><\/p>\n<blockquote>\n<p style=\"text-align: justify;\"><span data-contrast=\"auto\">This way of doing\u00a0<\/span><span data-contrast=\"auto\">business, though,<\/span><span data-contrast=\"auto\">\u00a0is wrong and dangerous: the contract should not be seen as a burden or a constraint, but as a guarantee of the rights of both parties. Not concluding a written contract, or doing so in a very hasty way, means leaving without clear agreements fundamental elements of the future relationship, such as those that led to the dispute between Blue Ribbon and Onitsuka Tiger:\u00a0<\/span><b><span data-contrast=\"auto\">commercial\u00a0<\/span><\/b><b><span data-contrast=\"auto\">targets<\/span><\/b><b><span data-contrast=\"auto\">, investments, ownership of brands<\/span><\/b><span data-contrast=\"auto\">.<\/span><span data-ccp-props=\"{&quot;335551550&quot;:6,&quot;335551620&quot;:6}\">\u00a0<\/span><\/p>\n<\/blockquote>\n<p><span data-contrast=\"auto\">If the contract is also international, the need to draw up a complete and balanced agreement is even stronger, given that in the absence of agreements between the parties, or as a supplement to these agreements, a law with which one of the parties is unfamiliar is applied, which is generally the law of the\u00a0<\/span><span data-contrast=\"auto\">country where the distributor is based<\/span><span data-contrast=\"auto\">.\u00a0<\/span><span data-ccp-props=\"{&quot;335551550&quot;:6,&quot;335551620&quot;:6}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Even if you are not in the\u00a0<\/span><span data-contrast=\"auto\">Blue Ribbon<\/span><span data-contrast=\"auto\">\u00a0situation, where it was an agreement on which the very existence of the company depended, international contracts should be discussed and negotiated with the help of a<\/span><span data-contrast=\"auto\">n expert\u00a0<\/span><span data-contrast=\"auto\">lawyer who knows the law applicable to the\u00a0<\/span><span data-contrast=\"auto\">agreement\u00a0<\/span><span data-contrast=\"auto\">and can help the entrepreneur to identify and negotiate the important clauses of the\u00a0<\/span><span data-contrast=\"auto\">contract<\/span><span data-contrast=\"auto\">.<\/span><span data-ccp-props=\"{&quot;335551550&quot;:6,&quot;335551620&quot;:6}\">\u00a0<\/span><\/p>\n<h2 aria-level=\"1\"><strong>Territorial exclusivity, commercial objectives and minimum turnover targets\u00a0<\/strong><\/h2>\n<p><span data-contrast=\"auto\">The first reason for conflict between Blue Ribbon and Onitsuka Tiger was the evaluation of sales trends in the US market.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Onitsuka argued that the turnover was lower than the potential of the U.S. market, while according to Blue Ribbon the sales trend was very positive, since up to that moment\u00a0<\/span><span data-contrast=\"auto\">it\u00a0<\/span><span data-contrast=\"auto\">had doubled every year the turnover, conquering an important share of the market sector.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">When Blue Ribbon learned that\u00a0<\/span><span data-contrast=\"auto\">Onituska<\/span><span data-contrast=\"auto\">\u00a0was evaluating other candidates for the distribution of its products in the USA and fearing to be\u00a0<\/span><span data-contrast=\"auto\">soon\u00a0<\/span><span data-contrast=\"auto\">out of the market, Blue Ribbon prepared the Nike brand as Plan B: when this was discovered by the Japanese manufacturer, the situation precipitated and led to a legal dispute between the parties.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">The dispute could perhaps have been avoided if the parties had\u00a0<\/span><span data-contrast=\"auto\">agreed upon\u00a0<\/span><span data-contrast=\"auto\">commercial\u00a0<\/span><span data-contrast=\"auto\">targets\u00a0<\/span><span data-contrast=\"auto\">and the contract had included a fairly standard clause in exclusive distribution agreements,\u00a0<\/span><span data-contrast=\"auto\">i.e.<\/span><span data-contrast=\"auto\">\u00a0a\u00a0<\/span><b><span data-contrast=\"auto\">minimum sales target on the part of the distributor<\/span><\/b><span data-contrast=\"auto\">.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">In an exclusive distribution agreement, the manufacturer grants the distributor\u00a0<\/span><b><span data-contrast=\"auto\">strong territorial protection<\/span><\/b><span data-contrast=\"auto\">\u00a0against the investments the distributor makes to develop the assigned market.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<blockquote>\n<p style=\"text-align: justify;\"><span data-contrast=\"auto\">In order to balance the concession of exclusivity, it is normal for the producer to ask the distributor for the so-called\u00a0<\/span><b><span data-contrast=\"auto\">Guaranteed Minimum Turnover or Minimum Target<\/span><\/b><span data-contrast=\"auto\">, which must be reached by the distributor every year in order to maintain the privileged status granted to him.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<\/blockquote>\n<p><b><span data-contrast=\"auto\">If the Minimum Target is not reached<\/span><\/b><span data-contrast=\"auto\">, the contract generally provides that the manufacturer has the right to withdraw from the contract (in the case of an open-ended agreement) or not to renew the agreement (if the contract is for a fixed term) or to revoke or restrict the territorial exclusivity.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">In the contract between Blue Ribbon and Onitsuka Tiger, the agreement did not foresee any targets (and in fact the parties disagreed when evaluating the distributor&#8217;s results) and had just been renewed for three years:\u00a0<\/span><b><span data-contrast=\"auto\">how can minimum turnover targets be foreseen in a multi-year contract?<\/span><\/b><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">In the absence of\u00a0<\/span><span data-contrast=\"auto\">reliable data<\/span><span data-contrast=\"auto\">, the parties often rely on\u00a0<\/span><b><span data-contrast=\"auto\">predetermined percentage increase mechanisms<\/span><\/b><span data-contrast=\"auto\">: +10% the second year, + 30% the third, + 50% the fourth, and so on.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">The\u00a0<\/span><b><span data-contrast=\"auto\">problem with this automatism<\/span><\/b><span data-contrast=\"auto\">\u00a0is that the targets are agreed without having available the real data on the future trend of product sales, competitors&#8217; sales and the market in general, and can therefore be very distant from the distributor&#8217;s current sales possibilities.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">For example, challenging the distributor for not meeting the\u00a0<\/span><span data-contrast=\"auto\">second or third year<\/span><span data-contrast=\"auto\">\u2019s<\/span><span data-contrast=\"auto\">\u00a0target in a recessionary economy would certainly be a questionable decision and a likely source of disagreement.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">It would be better to have a\u00a0<\/span><b><span data-contrast=\"auto\">clause\u00a0<\/span><\/b><b><span data-contrast=\"auto\">for consensually setting targets from year to year<\/span><\/b><span data-contrast=\"auto\">, stipulating that targets will be agreed between the parties in the light of sales performance in the preceding months, with some advance notice before the end of the current year.\u00a0\u00a0<\/span><b><span data-contrast=\"auto\">In the event of failure to agree on the new target<\/span><\/b><span data-contrast=\"auto\">, the contract may provide for the previous year&#8217;s target to be applied, or for the parties to have the right to withdraw, subject to a certain period of notice.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">It should be remembered, on the other hand, that\u00a0<\/span><b><span data-contrast=\"auto\">the target can also be used as an incentive for the distributor:<\/span><\/b><span data-contrast=\"auto\">\u00a0it can be provided, for example, that if a certain turnover is achieved, this will enable the agreement to be renewed, or territorial exclusivity to be extended, or certain commercial compensation to be obtained for the following year.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">A final recommendation is to correctly manage the minimum target clause, if present in the contract: it often happens that the manufacturer disputes the failure to reach the target for a certain year, after a long period in which the annual targets had not been reached, or had not been updated, without any consequences.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">In such cases, it is possible that the distributor claims that there has been an implicit waiver of this contractual protection and therefore that the withdrawal is not valid: to avoid disputes on this subject, it is advisable to expressly provide in the Minimum Target clause that the failure to c<\/span><span data-contrast=\"auto\">hallenge<\/span><span data-contrast=\"auto\">\u00a0the failure to reach the target for a certain period does not mean that the right to activate the clause in the future is\u00a0<\/span><span data-contrast=\"auto\">waived<\/span><span data-contrast=\"auto\">.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<h2><strong>The notice period for terminating an international distribution contract<\/strong><\/h2>\n<p><span data-contrast=\"auto\">The other dispute between the parties was the\u00a0<\/span><b><span data-contrast=\"auto\">violation of a non-compete agreement<\/span><\/b><span data-contrast=\"auto\">: the sale of the Nike b<\/span><span data-contrast=\"auto\">r<\/span><span data-contrast=\"auto\">and by Blue Ribbon, when the contract prohibited the sale of other shoes manufactured in Japan.<\/span><span data-ccp-props=\"{&quot;335551550&quot;:6,&quot;335551620&quot;:6}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Onitsuka Tiger claimed that Blue Ribbon had breached the non-compete agreement, while the distributor believed it had no other option, given the manufacturer&#8217;s imminent decision to terminate the agreement.<\/span><span data-ccp-props=\"{&quot;335551550&quot;:6,&quot;335551620&quot;:6}\">\u00a0<\/span><\/p>\n<blockquote>\n<p style=\"text-align: justify;\"><span data-contrast=\"auto\">This type of dispute can be avoided by clearly setting a\u00a0<\/span><span data-contrast=\"auto\">notice period\u00a0<\/span><span data-contrast=\"auto\">for termination (or non-renewal): this period has the fundamental function of allowing the parties to prepare for the termination of the relationship and to organize their activities after the termination.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<\/blockquote>\n<p><span data-contrast=\"auto\">In particular, in order to avoid misunderstandings such as the one that arose between Blue Ribbon and Onitsuka Tiger, it can be foreseen that\u00a0<\/span><b><span data-contrast=\"auto\">during this period the parties will be able to make contact with other potential distributors and producers<\/span><\/b><span data-contrast=\"auto\">, and that this does not violate the obligations of exclusivity and non-competition.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">In the case of Blue Ribbon, in fact, the distributor had gone a step beyond the mere search for another supplier, since it had started to sell Nike products while the contract with Onitsuka was still valid: this behavior represents a serious breach of an exclusivity agreement.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<blockquote>\n<p style=\"text-align: justify;\"><span data-contrast=\"auto\">A particular aspect to consider regarding the notice period is the duration: how long does the notice period have to be to be considered fair? In the case of long-standing business relationships, it is important\u00a0<\/span><b><span data-contrast=\"auto\">to give the\u00a0<\/span><\/b><b><span data-contrast=\"auto\">other\u00a0<\/span><\/b><b><span data-contrast=\"auto\">party sufficient time to reposition themselves in the marketplace<\/span><\/b><span data-contrast=\"auto\">, looking for alternative distributors or suppliers, or (as in the case of Blue Ribbon\/Nike) to create and launch their own brand.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<\/blockquote>\n<p><span data-contrast=\"auto\">The other element to be taken into account, when communicating the termination, is that the\u00a0<\/span><b><span data-contrast=\"auto\">notice must be such as to allow the distributor to amortize the investments made to meet its obligations during the contract<\/span><\/b><span data-contrast=\"auto\">; in the case of Blue Ribbon, the distributor, at the express request\u00a0<\/span><span data-contrast=\"auto\">of the manufacturer, had opened a series of mono-brand stores both on the West and East Coast<\/span><span data-contrast=\"auto\">\u00a0of the\u00a0<\/span><span data-contrast=\"auto\">U.S.A..<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">A closure of the contract shortly after its renewal and with too short a notice would not have allowed the distributor to reorganize the sales network with a replacement product, forcing the closure of the stores that had sold the Japanese shoes up to that moment.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-18742 \" src=\"https:\/\/www.legalmondo.com\/wp-content\/uploads\/2021\/02\/sconosciuto.jpg\" alt=\"tiger\" width=\"596\" height=\"445\" \/><\/p>\n<p><span data-contrast=\"auto\">Generally, it is advisable to provide for a notice period for withdrawal of\u00a0<\/span><b><span data-contrast=\"auto\">at least 6 months<\/span><\/b><span data-contrast=\"auto\">, but in international distribution contracts, attention should be paid, in addition to the investments made by the parties, to any\u00a0<\/span><b><span data-contrast=\"auto\">specific\u00a0<\/span><\/b><b><span data-contrast=\"auto\">provisions of the law applicable to the contract<\/span><\/b><span data-contrast=\"auto\">\u00a0(here, for example, an in-depth analysis for\u00a0<\/span><span data-contrast=\"auto\">sudden termination of contracts\u00a0<\/span><span data-contrast=\"auto\">in\u00a0<\/span><a href=\"https:\/\/www.legalmondo.com\/2019\/12\/france-sudden-termination-international-contract\/\" target=\"_blank\" rel=\"noopener\"><span data-contrast=\"auto\">France<\/span><\/a><span data-contrast=\"auto\">)<\/span><span data-contrast=\"auto\">\u00a0or to case law on the subject of withdrawal from commercial relations (in some cases, the term considered appropriate for a long-term sales concession contract can reach 24 months).<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Finally, it is normal that at the time of closing the contract, the distributor is still in possession of\u00a0<\/span><b><span data-contrast=\"auto\">stocks of products<\/span><\/b><span data-contrast=\"auto\">: this can be problematic, for example because the distributor\u00a0<\/span><span data-contrast=\"auto\">usually wishes\u00a0<\/span><span data-contrast=\"auto\">to liquidate the stock (flash sales or sales through web channels with strong discounts)\u00a0<\/span><span data-contrast=\"auto\">and this\u00a0<\/span><span data-contrast=\"auto\">can go against the commercial policies of the manufacturer and new distributors.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">In order to avoid this type of situation, a clause that can be included in the distribution contract is that relating to the producer&#8217;s right to repurchase existing stock at the end of the contract, already setting the repurchase price (for example, equal to the sale price to the distributor for products of the current season, with a 30% discount for products of the previous season and with a higher discount for products sold more than 24 months previously).<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<h2 aria-level=\"1\"><strong>Trademark Ownership in an International Distribution Agreement\u00a0<\/strong><\/h2>\n<p><span data-contrast=\"auto\">During the course of the distribution relationship, Blue Ribbon had created a new type of sole for running shoes and coined the trademarks\u00a0<\/span><b><span data-contrast=\"auto\">Cortez and Boston<\/span><\/b><span data-contrast=\"auto\">\u00a0for the top models of the collection, which had been very successful among the public, gaining great popularity: at the end of the contract,\u00a0<\/span><b><span data-contrast=\"auto\">both parties claimed ownership of the trademarks<\/span><\/b><span data-contrast=\"auto\">.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><b><span data-contrast=\"auto\">Situations of this kind frequently occur in international distribution relationships<\/span><\/b><span data-contrast=\"auto\">: the distributor registers the manufacturer&#8217;s trademark in the country in which it operates, in order to prevent\u00a0<\/span><span data-contrast=\"auto\">competitors from doing so and to be able to protect the trademark in the case of the sale of counterfeit products; or it happens that the distributor, as in the dispute we are discussing, collaborates in the creation of new trademarks intended for its market.\u00a0<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">At the end of the relationship, in the absence of a clear agreement between the parties, a dispute can arise like the one in the Nike case:\u00a0<\/span><b><span data-contrast=\"auto\">who is the owner, producer or distributor?<\/span><\/b><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-18750 \" src=\"https:\/\/www.legalmondo.com\/wp-content\/uploads\/2021\/02\/sconosciuto1.jpg\" alt=\"tiger\" width=\"607\" height=\"406\" srcset=\"https:\/\/www.legalmondo.com\/wp-content\/uploads\/2021\/02\/sconosciuto1.jpg 1100w, https:\/\/www.legalmondo.com\/wp-content\/uploads\/2021\/02\/sconosciuto1-600x401.jpg 600w\" sizes=\"auto, (max-width: 607px) 100vw, 607px\" \/><\/p>\n<p><span data-contrast=\"auto\">In order to avoid misunderstandings, the first advice is\u00a0<\/span><b><span data-contrast=\"auto\">to register the trademark in all the countries in which the products are distributed<\/span><\/b><span data-contrast=\"auto\">, and not only: in the case of China, for example, it is advisable to register it anyway, in order to prevent third parties in bad faith from taking the trademark (for further information\u00a0<\/span><a href=\"https:\/\/www.legalmondo.com\/2020\/02\/china-trade-mark-registration\/\" target=\"_blank\" rel=\"noopener\"><span data-contrast=\"none\">see this post on\u00a0<\/span><span data-contrast=\"none\">Legalmondo<\/span><\/a><span data-contrast=\"auto\">).<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<blockquote>\n<p style=\"text-align: justify;\"><span data-contrast=\"auto\">It is also advisable to include in the distribution contract\u00a0<\/span><b><span data-contrast=\"auto\">a clause prohibiting the distributor from registering the trademark\u00a0<\/span><\/b><span data-contrast=\"auto\">(or similar trademarks) in the country in which it operates, with express provision for the manufacturer&#8217;s right to ask for its transfer should this occur.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<\/blockquote>\n<p><span data-contrast=\"auto\">Such a clause would have prevented the dispute between Blue Ribbon and Onitsuka Tiger from arising.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">The facts we are recounting are dated\u00a0<\/span><b><span data-contrast=\"auto\">1976<\/span><\/b><span data-contrast=\"auto\">: today, in addition to clarifying the ownership of the trademark and the methods of use by the distributor and its sales network, it is advisable that the contract also regulates\u00a0<\/span><b><span data-contrast=\"auto\">the use of the trademark and the distinctive signs of the manufacturer on communication channels, in particular social media<\/span><\/b><span data-contrast=\"auto\">.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">It is advisable to clearly stipulate that the manufacturer is the owner of the social media profiles, of the content that is created, and of the data generated by the sales, marketing and communication activity in the country in which the distributor operates, who only has the license to use them, in accordance with the owner&#8217;s instructions.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">In addition, it is a good idea for the agreement to establish how the brand will be used and\u00a0<\/span><span data-contrast=\"auto\">the\u00a0<\/span><span data-contrast=\"auto\">communication and sales promotion policies in the market, to avoid initiatives that may have negative or counterproductive effects.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">The clause can also be reinforced with the provision of\u00a0<\/span><b><span data-contrast=\"auto\">contractual penalties<\/span><\/b><span data-contrast=\"auto\">\u00a0in the event that, at the end of the agreement, the distributor refuses to transfer control of the digital channels and data generated in the course of business.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<h2 aria-level=\"1\"><strong>Mediation in international commercial distribution contracts\u00a0<\/strong><\/h2>\n<p><span data-contrast=\"auto\">Another interesting point offered by the Blue Ribbon vs. Onitsuka Tiger case is linked to the\u00a0<\/span><b><span data-contrast=\"auto\">management of conflicts in international distribution relationships<\/span><\/b><span data-contrast=\"auto\">: situations such as the one we have seen can be effectively resolved through the use of mediation.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">This is an attempt to reconcile the dispute, entrusted to a specialized body or mediator, with the aim of finding an amicable agreement that avoid<\/span><span data-contrast=\"auto\">s<\/span><span data-contrast=\"auto\">\u00a0judicial action.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<blockquote>\n<p style=\"text-align: justify;\"><span data-contrast=\"auto\">Mediation can be provided for in the contract as a\u00a0<\/span><b><span data-contrast=\"auto\">first step<\/span><\/b><span data-contrast=\"auto\">, before the eventual lawsuit or arbitration, or it can be initiated voluntarily within a judicial or arbitration procedure already in progress.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<\/blockquote>\n<p><b><span data-contrast=\"auto\">The advantages are many<\/span><\/b><span data-contrast=\"auto\">: the main one is the possibility to find\u00a0<\/span><b><span data-contrast=\"auto\">a commercial solution that allows the continuation of the relationship<\/span><\/b><span data-contrast=\"auto\">, instead of just looking for\u00a0<\/span><span data-contrast=\"auto\">ways\u00a0<\/span><span data-contrast=\"auto\">for the termination of the commercial relationship between the parties.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Another interesting aspect of mediation is that of\u00a0<\/span><b><span data-contrast=\"auto\">overcoming personal conflicts<\/span><\/b><span data-contrast=\"auto\">: in the case of Blue Ribbon vs. Onitsuka, for example, a decisive element in the escalation of problems between the parties was the difficult personal relationship between the CEO of Blue Ribbon and the Export manager of the Japanese manufacturer, aggravated by strong cultural differences.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">The process of m<\/span><span data-contrast=\"auto\">ediation introduc<\/span><span data-contrast=\"auto\">es<\/span><span data-contrast=\"auto\">\u00a0a third figure,\u00a0<\/span><b><span data-contrast=\"auto\">able to dialogue with the parts and to guide them to look for solutions of mutual interest<\/span><\/b><span data-contrast=\"auto\">, that can be decisive to overcome the communication problems or the personal hostilities.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">For those interested in the topic, we refer to\u00a0<\/span><a href=\"https:\/\/www.legalmondo.com\/2020\/07\/importance-mediation-distribution-contracts\/\" target=\"_blank\" rel=\"noopener\"><span data-contrast=\"none\">this\u00a0<\/span><span data-contrast=\"none\">post on\u00a0<\/span><span data-contrast=\"none\">Legalmondo<\/span><\/a><span data-contrast=\"auto\">\u00a0and to the\u00a0<\/span><span data-contrast=\"auto\">replay of a recent webinar on <\/span><a href=\"https:\/\/www.youtube.com\/watch?v=NISq4NqJWhw\" target=\"_blank\" rel=\"noopener\"><span data-contrast=\"none\">mediation<\/span> of international conflicts<\/a><span data-contrast=\"auto\">.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<h2 aria-level=\"1\"><strong>Dispute resolution\u00a0clauses in international distribution agreements\u00a0<\/strong><\/h2>\n<p><span data-contrast=\"auto\">The dispute between Blue Ribbon and Onitsuka Tiger led the parties to initiate two parallel lawsuits, one in the US (initiated by the distributor) and one in Japan (rooted by the manufacturer).<\/span><span data-ccp-props=\"{&quot;335551550&quot;:6,&quot;335551620&quot;:6}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">This was possible because the contract\u00a0<\/span><b><span data-contrast=\"auto\">did not expressly foresee how any future disputes would be resolved<\/span><\/b><span data-contrast=\"auto\">, thus generating a very complicated situation, moreover on two judicial fronts in different countries.<\/span><span data-ccp-props=\"{&quot;335551550&quot;:6,&quot;335551620&quot;:6}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">The clauses that establish which law applies to a contract and how disputes are to be resolved are known as &#8220;<\/span><i><span data-contrast=\"auto\">midnight clauses<\/span><\/i><span data-contrast=\"auto\">&#8220;, because they are often the last clauses in the contract, negotiated late at night.<\/span><span data-ccp-props=\"{&quot;335551550&quot;:6,&quot;335551620&quot;:6}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">They are, in fact, very important clauses, which must be defined in a conscious way, to avoid solutions that are ineffective or counterproductive<\/span><span data-contrast=\"auto\">.<\/span><span data-ccp-props=\"{&quot;335551550&quot;:6,&quot;335551620&quot;:6}\">\u00a0<\/span><\/p>\n<h2 aria-level=\"1\"><strong>How we can help you<\/strong><span data-ccp-props=\"{}\">\u00a0<\/span><\/h2>\n<p><span data-contrast=\"auto\">The construction of an international commercial distribution agreement is an important investment, because it sets the rules of the relationship between the parties for the future and provides them with the tools to manage all the situations that will be created in the future collaboration.<\/span><span data-ccp-props=\"{&quot;335551550&quot;:6,&quot;335551620&quot;:6}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">It is essential not only to negotiate and conclude a correct, complete and balanced agreement, but also to know how to manage it over the years, especially when situations of conflict arise.<\/span><span data-ccp-props=\"{&quot;335551550&quot;:6,&quot;335551620&quot;:6}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Legalmondo<\/span><span data-contrast=\"auto\"> offers the possibility to work with lawyers experienced in international commercial distribution in more than 60 countries: <\/span><a href=\"http:\/\/info@legalmondo.com\/\" target=\"_blank\" rel=\"noopener\"><span data-contrast=\"none\">write us your needs<\/span><\/a><span data-contrast=\"auto\">.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Summary Phil Knight, the founder of Nike, imported the Japanese brand Onitsuka Tiger into the US market in 1964 and quickly gained a 70% share. When Knight learned Onitsuka was looking for another distributor, he created the Nike brand. This led to two lawsuits between the two companies, but Nike eventually won and became the [&hellip;]<\/p>\n","protected":false},"author":43,"featured_media":34287,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[207,202,250,253],"tags":[222],"class_list":["post-18715","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-contracts","category-distribution-agreements","category-intellectual-property","category-trademark-and-patents","tag-italy"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.legalmondo.com\/pt-pt\/wp-json\/wp\/v2\/posts\/18715","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.legalmondo.com\/pt-pt\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.legalmondo.com\/pt-pt\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.legalmondo.com\/pt-pt\/wp-json\/wp\/v2\/users\/43"}],"replies":[{"embeddable":true,"href":"https:\/\/www.legalmondo.com\/pt-pt\/wp-json\/wp\/v2\/comments?post=18715"}],"version-history":[{"count":7,"href":"https:\/\/www.legalmondo.com\/pt-pt\/wp-json\/wp\/v2\/posts\/18715\/revisions"}],"predecessor-version":[{"id":34295,"href":"https:\/\/www.legalmondo.com\/pt-pt\/wp-json\/wp\/v2\/posts\/18715\/revisions\/34295"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.legalmondo.com\/pt-pt\/wp-json\/wp\/v2\/media\/34287"}],"wp:attachment":[{"href":"https:\/\/www.legalmondo.com\/pt-pt\/wp-json\/wp\/v2\/media?parent=18715"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.legalmondo.com\/pt-pt\/wp-json\/wp\/v2\/categories?post=18715"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.legalmondo.com\/pt-pt\/wp-json\/wp\/v2\/tags?post=18715"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}