DISTRIBUTION AGREEMENTS

Attorneys, Dallas, Texas.

Negotiating distribution agreements is important for a well-drafted contract. Our Dallas business lawyers help draft and negotiate distribution agreements.

DISTRIBUTION AGREEMENTS & MANUFACTURING

What Is A Distribution Agreement?

A distribution agreement or "distributor agreement" is a contract between a company that supplies products and a company that markets and sells those products. Essentially, the distributor agrees to buy products from the supplier company and sell them to clients within some geographical regions, either exclusively or non-exclusively. Distributors are independent entities who buy products from suppliers, pay their business expenses, and either purchase the product for resale at a markup or simply process orders which are placed directly with the manufacturer and earn a commission predicated on placed or completed orders. Suppliers and distributors benefit from the relationship that the suppliers have products to sell. Distributors are eager to sell or otherwise place orders with suppliers in exchange for a portion of the profits. Distributors get access to a supplier's product line and sales materials and sell the product without the time and expense of research and development. Similarly, suppliers get ready access to a distributor's sale chain and experience for reaching customers. A distributor buys directly from a manufacturer and sells to either resellers or, sometimes, the end-user directly.


A distribution agreement can either be exclusive or nonexclusive. A supplier may authorize a distributor to have exclusive or non-exclusive control over a particular product line, sales channel, or territory. A distribution agreement will contain terms similar to the following:

 

  • Exclusive or Non-Exclusive Agreement

 

  • Geographic Territory for Distribution

 

  • Term and Termination Language of the Contract

 

  • Product Competition Agreements

 

  • Marketing & Advertising Agreements

 

  • Trademark & Software Licensing

 

  • Procurement, Purchase & Sale Terms

 

  • Material Return Authorizations & Credit Terms

 

  • Product Liability Limitation

 

At Wilson Legal Group, our business lawyers utilize a team-based approach with access to multiple attorneys with substantive years of experience in many practice areas. Whatever your reseller, distribution, or manufacturing needs may be, our attorneys have the talent, resources, and expertise to meet them in an efficient, timely, and cost-effective manner.


What Is A Manufacturing Agreement? 

A manufacturing agreement is a contract between one party that needs something manufactured and another party who desires to purchase that manufactured product (e.g., the manufacture of food and beverages, pharmaceuticals, industrial products, computers, medical equipment, etc.). Common manufacturing terms and conditions may include manufacturing facility requirements, quality control, inventory management, price and payment terms, intellectual property, insurance, and indemnification. Our attorneys can assist you in drafting and negotiating manufacturing and supply agreements between distributors and the manufacturers or suppliers of their products.

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Additional Distributor Focus 

What Is A Reseller Agreement?

Although similar to a Distribution Agreement in some aspects, a reseller agreement is an agreement where a company buys the product from a distributor or wholesaler and then sells directly to end users. A product manufacturer may sell and market products largely through a network of channel partners, including distributors, resellers, system vendors, and systems integrators. Product sales channels will vary depending on the products being sold. A distributor often implies a closer relationship with the manufacturer, and a distributor would buy directly from a product manufacturer for sale to end-users, whereas a reseller would buy from a distributor or wholesaler for sale to end-users.

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For example, a Court in the Northern District of California stated that: “ the determinative question is whether Plaintiff holds a valid copyright. ” Signo Trading Intern. Ltd. v. Gordon, 535 F. Supp. 362, 363 (N.D. Cal. 1981). The Signo Trading Court dismissed Plaintiff’s infringement claims because plaintiff did not have a valid copyright as a matter of law in the translations and transliterations at issue because they lacked the “requisite originality.” Id. at 365. Can Translation Be Considered a Creative Process? The Practice of Translating Translation goes beyond the replacement of one word by the equivalent word from the source text. Translating literary work, poetry, and fiction with deeper meanings beyond the surface text is a complex, artistic process. Translating books like The Iliad, for instance, requires the practice of artistic translation to translate the emotions, thoughts, and the culture correctly. Technical Translations and Legal Translations Conversely, technical writing and texts for the law need less creativity and instead value correctness over all else. These writing forms require strict adherence to the original sense, leaving very little room for artistic interpretation. Translations for these writing forms thus typically involve less creative contribution and less potential for the work being protected by copyright. Why Is Creativity Important for Translations for Copyright? Originality when translating For a work to be subject to copyright, some creativity, however slight, is essential. Even when the translation is taken from the work, the translation also includes some creative work by the translator. This creativity can make the translation subject to copyright. A derivative work must “recast, transform[], or adapt[]” a preexisting work and “consist[] of editorial revisions, annotations, elaborations, or other modifications which, as a whole, represent an original work of authorship.” Id. In other words, it must change or alter the pre-existing work’s content and must itself be an original work of authorship. The Supreme Court stated that “ [t]he sine qua non of copyright is originality ” and that “ [t]o qualify for copyright protection, a work must be original to the author. ” Feist Publ’ns, Inc. v. Rural Tel. Serv. Co., Inc., 499 U.S. 340, 361 (1991) at 345. “Original, as the term is used in copyright, means only that the work was independently created by the author (as opposed to copied from other works), and that it possesses at least some minimal degree of creativity.” Id. (citing 1 M. Nimmer & D. Nimmer, Copyright §§ 2.01[A], [B] (1990)). In granting a Rule 12 motion to dismiss, the Signo Trading Court held that: " It is inconceivable that anyone could copyright a single word or a commonly used short phrase, in any language. It is also inconceivable that a valid copyright could be obtained for a phonetic spelling, using standard Roman letters, of such words or phrases. Although lists of words and translations of larger works may be copyrightable, Plaintiff cannot claim credit for any of the elements which make those things copyrightable. For these reasons, Plaintiff does not hold a valid copyright on the translations or transliterations ... " Signo Trading, 535 F. Supp. at 365. The Problem of the Derivative Work However, translations are generally "derivative works" - derived from the work of another. Because of this, the owner or author of the work is generally required to agree to the translation. Translations made illegally can be held under the classification of copyright violations, even when the translator has added creative elements. Who Has the Right over the Translated Work? Employer-Commissioned Translations Ownership of the copyright for the translation work varies. If the translation is commissioned by the owner of the original work, the owner will retain the right. Even when the translator adds creativity by passing over the original emotions and thoughts, the owner will not necessarily lose the right over the translation work. In some circumstances, the translation work can be accredited by the translator without them holding the right over the work. Independent Translations If a translation is performed independently by the translator, the translator can even be identified as the co-author of the translation. Nevertheless, the author typically has the underlying copyright, restricting the translator’s right over the work. Creative Translations from the Public Domain In certain cases, a translation may be creative enough to warrant its own copyright. For example, a translator adapting a classic work or a book in the public domain into modern language may introduce enough originality to qualify for copyright protection. However, direct, word-for-word translations are typically not considered original enough to receive new copyright protection. What About Machine Translations? The Human Creativity Copyright Requirement Machine-generated translations, including those produced by platforms like OpenAI , operate through advanced algorithms that replicate language patterns rather than capture the human touch. Unlike translations crafted by human translators who often infuse cultural insight and genuine emotion into the work, OpenAI's output is rooted in statistical patterns and data. Consequently, while these translations are impressively efficient and accurate, they typically fall short of the originality required for copyright protection. This distinction underscores the human creativity requirement needed to secure a valid copyright . Ultimately, although machine-generated translations serve as powerful tools, they do not offer the same legal and creative protections as those provided by human translators. The Bottom Line: Navigating Copyright in Translations Translations occupy the middle ground under the law of the copyright. Albeit the right of the original author generally has the right under the copyright, the right under the copyright can also be claimed by the translator provided the translation is creative enough. Central considerations here include the creativity the translator has added, the nature of the work being translated, and whether the work is under the public domain. These considerations establish the right of the owner under the copyright for the translation. Why Wilson Whitaker Rynell for Your Copyright Work? At Wilson Whitaker Rynell, our professional lawyers specialize in the practice of copyright law and copyright litigation , including the complex subject matter of translation work. We can provide you with advice about the ownership of your work under the provisions of the copyright, and protect your creative property. If you are the author, the publisher, or the translator, you can rely upon the advice from our firm. Copyright Translation FAQS
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