Nike Distribution Agreement

Nike is responsible for the management and management of their intellectual property rights (IPRs) by football clubs and federations. This allows products to be designed and manufactured with Nike and the club`s official brand. Nike also licenses relevant intellectual property rights to third parties, allowing them to manufacture club products and distribute them to retailers and consumers. In 2017, the Commission opened an investigation into Nike`s practices in these licensing agreements. Finally, it found that, as of 2004, in violation of EU and EEA competition law, nike had illegally prevented 13-year-old distributors from selling products granted across borders and online in the EEA. Nike`s practices were aimed at dividing the market and preventing cross-border trade to the detriment of consumers. Most of the major infringement clauses in Nike`s contracts came from the 2011 licensing agreement. The proposal contained guidelines indicating that several restrictive terms, such as the . B the ban on online sales, were banned. If, in practice, Nike had followed the warnings in its own document, the direct infringements would have been much more limited in scope. This highlights the risk of establishing models for several jurisdictions in which certain clauses may be illegal in certain areas. In the application of such agreements, it is therefore important that the agreements themselves are properly drawn up, but also that those who use them understand how to comply with EU/EEA competition law.

On October 4, 2017, the Amsterdam District Court ruled in favour of sportswear manufacturer Nike in a complaint against a distributor, Action Sport, which had failed to comply with Nike`s selective distribution policy. The District Court found that Nike`s selective distribution system, which included a ban on sales via unauthorized online platforms, was compatible with competition law insofar as it wished to preserve the luxury image of Nike products. Merchandising agreements are intellectual property rights licenses because they give takers the right to use intellectual property for the manufacture and sale of products bearing the corresponding trademarks and logos. For this reason, some might argue that merchandising agreements should not be subject to the same prohibitions on customer restrictions and territorial restrictions as regular distribution agreements. However, the Commission`s decision confirms the applicability of EU competition rules to intellectual property licences insofar as they aim to artificially compartmentalinate the internal market. In 2012, Action Sport and Nike agreed on a new distribution policy that provided that licensed distributors such as Action Sport cannot sell Nike products through unauthorized parts. Despite this policy, Action Sport offered Nike products for sale on Amazon, an unauthorized online platform. Nike then announced the distribution contract and referred Action Sport to the Amsterdam District Court.

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