KARHU Holding BV is moving forward with plans to launch the Karhu brand worldwide despite a dispute with the Finnish company that sold it exclusive global rights to the brand in late June. 


The company expects to receive a shipment of its new line of shoes for spring/summer 2009 soon and is preparing to show them at events surrounding the New York City Marathon Nov. 2, said Huub Valkenburg, CEO for KARHU Holding BV.  It is also setting up distributors in Europe to prepare for its spring/summer launch.


Valkenburg and fellow former Reebok executive Jay Duke announced in late June they had formed the Dutch company to buy the global rights to the Karhu brand and underlying patents from Karhu Sporting Goods Oy (KSG) of Finland. Their plan is to take the Karhu running shoe technology worldwide and build a global footwear and apparel brand.
Their plan called for licensing the rights to the trademark in Scandinavia, where Karhu is a well-established brand, back to KSG. KSG, which owns a ski factory, would also retain rights to the Karhu name for skis outside North America, where Jarden Corp.’s K2 unit licenses the rights. Valkenburg and Duke have owned the licensing rights for all other purposes in North America since 2006.


After the deal was announced, however, KARHU Holding learned that KSG had misrepresented the nature of a licensing agreement with another Finnish company. During due diligence, KSG had presented KARHU Holding a document showing it had assigned licensing rights to the Karhu name in Scandinavia to another Finnish company the same day it sold Karhu’s trademarks and patents to KARHU Holdings.


However, after the deal closed, the Finnish licensee produced its copy of the agreement showing that it had been awarded rights to use the Karhu trademark to sell apparel worldwide.


Valkenburg presented copies of the conflicting agreements to Finnish police, who he said have since forwarded the information to prosecutors investigating Karhu executives for fraud. Meanwhile, KARHU Holding is setting up its own subsidiary in Finland to take over the Scandinavian business.


SEW has been unable to reach KSG officials for comment, but Finnish media have quoted the company’s president and CEO, Pertti Keskitalo, as saying he will fight to retain KSG’s rights to the Karhu brand in Scandinavia. He has also been quoted as saying KARHU Holding still owes KSG money and that KSG is moving to rescind the deal.
However, Valkenburg said KARHU Holding has paid for both the trademarks and the patents. He provided documents last week indicating the Finnish government has already transferred 10 Karhu trademarks to KARHU Holding. He also noted that KSG can not rescind the deal without first obtaining a court ruling. Furthermore, KSG has ignored offers of expedited arbitration in the Netherlands stipulated in the sale agreement, Valkenburg said.


The irony of all this, said Valkenburg, is that KARHU Holding now has rights not only in Scandinavia, but to license the brand for skis outside North America.
“It’s a very, very popular brand in Scandinavia,” Valkenburg said, “and now we have access to the whole market.”