Karhu, the Finnish brand of cross-country skis, walking poles, outdoor footwear and other sports ranges, is at the center of an odd legal battle including a police investigation for suspected fraud.

Karhu Holding BV, a Dutch company set up by two well-known sports executives, Huub Valkenburg and Jay Dukes, agreed to buy nearly all trademark rights for Karhu last March from Karhu International in Finland, to relaunch the brand around the world as an athletic and outdoor footwear business. In turn, it issued a license to Karhu Sporting Goods Oy (KSG), a sister company of Karhu International, to manufacture and sell Karhu winter sports products equipment worldwide as well as athletic footwear in Scandinavia and Finland.

In July, however, Karhu Holding started proceedings to terminate the licenses to KSG, citing four breaches of contract. At the same time, it turned to Helsinki police, alleging that forged documents had been used as part of the negotiations leading up to the trademark sale.

Pertti Keskitalo, chief executive of KSG, denies all charges and describes Karhu Holding's statements as a "deliberate act of malice and bad faith".He argues that the licenses to KSG were an integral part of the trademark deal, and that Karhu Holding is merely trying to wriggle out of its obligations. He therefore stated that he would cancel the sale of the trademark rights to Karhu Holding – although this would have to be confirmed by an arbitration ruling in the Netherlands. Karhu Holding filed for arbitration in August, expecting the proceedings to take at least three months (many more details in SPORTING GOODS INTELLIGENCE EUROPE).