What is the extent of Byrider's liability regarding infringement claims related to the Licensed System?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
RT (INCLUDING NEGLIGENCE), STRICT LIABILITY, WARRANTY, STATUTORY RIGHTS OR ANY OTHER BASIS ARISING OUT OF LICENSEE'S USE OF THE LICENSED SYSTEM, THE MARKETING, DELIVERY OR SUPPORTING THEREOF, OR OTHERWISE ARISING PURSUANT TO THIS AGREEMENT.
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- Limitation of Liability. LICENSOR'S AGGREGATE LIABILITY TO LICENSEE FOR ANY CAUSE WHATSOEVER IS LIMITED TO AN AMOUNT EQUAL TO THE FEES COVERED BY APPENDIX B AND ACTUALLY PAID BY LICENSEE FOR USE OF THE LICENSED SYSTEM DURING THE THEN MOST RECENT 12 MONTH PERIOD OF TIME PRECEDING THE DATE OF THE EVENT (OR, IF MORE THAN ONE EVENT, THE FIRST EVENT) GIVING RISE TO THE LIABILITY.
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- Intellectual Property Indemnification. Licensor, at its own expense, shall defend any and all claims, actions and causes of actions brought against Licensee to the extent that it is based on a claim that the Licensed System infringes a patent, copyright, or intellectual or industrial property right of any person, firm, or corporation not a party to this Agreement, provided
that (a) Licensee promptly notifies Licensor of any potential or threatened claims and the commencement of any such legal action, (b) Licensee has not by any act of commission or omission prejudiced Licensor's ability to successfully defend such litigation, and (c) Licensor shall have exclusive control of the defense to such legal action and of all negotiations for settlement or compromise. If these conditions are met, Licensor shall indemnify and hold Licensee harmless with respect to all costs and damages actually awarded against Licensee arising out of such legal action, subject to the limitations of Section 20. In the event that the Licensed System becomes, or in Licensor's opinion is likely to become, the subject of a claim of infringement of a patent, copyright, or other intellectual or industrial property right of any person, firm or corporation not a party to this Agreement, Licensor may, at its option, either secure Licensee's right to continue using the Licensed System, replace or modify the Licensed System so as to make it non-infringing without materially impairing the Licensed System's utility, or, if neither of these alternatives is reasonably available to Licensor, terminate this Agreement upon one (1) month's written notice. In the event that Licensor elects to so terminate this Agreement to avoid infringement within twelve (12) months of delivery of the Licensed system to Licensee, then Licensor shall refund to Licensee the price paid for usage, login, and security rights to the software under this Agreement according to the percentage of days within that twelve (12) month period that Licensee did not have access to the Licensed System. If, however, Licensee notifies Licensor in writing during the one (1) month after Licensor's notice of termination under this Section that Licensee elects to continue to be licensed with respect to the Licensed System, then Licensee shall undertake, at Licensee's expense, the defense of any such legal action against Licensee and/or Licensor arising from Licensee's use of the Licensed System and shall indemnify and hold Licensor harmless with respect to all costs, damages, and attorney fees actually incurred and attributable to such continued use or further defense of said legal action after such notice is given to Licensor. Licensor shall have no liability to Licensee if the alleged infringement is based upon a use other than of a current, unaltered version of the Licensed System available from Licensor or upon a use or combination of the Licensed System with programs or data not supplied by Licensor. The foregoing states the entire liability of Licensor with respect to infringement.
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- Licensee's Indemnification.
Source: Item 23 — Receipts (FDD pages 88–335)
What This Means (2025 FDD)
According to Byrider's 2025 Franchise Disclosure Document, Byrider will defend claims brought against the franchisee if the Licensed System infringes on intellectual property rights of a third party, provided the franchisee promptly notifies Byrider of any potential claims, has not prejudiced Byrider's defense, and Byrider has exclusive control of the defense and settlement negotiations. If these conditions are met, Byrider will cover costs and damages awarded against the franchisee, subject to certain limitations.
Byrider's liability to the franchisee is limited to the fees paid by the franchisee for use of the Licensed System during the 12 months preceding the event that led to the liability, as detailed in Appendix B. If the Licensed System is likely to become subject to an infringement claim, Byrider can either secure the franchisee's right to continue using the system, modify or replace the system to avoid infringement, or terminate the agreement with one month's written notice.
If Byrider terminates the agreement within 12 months of delivering the Licensed System to avoid infringement, Byrider will refund the franchisee the price paid for usage, login, and security rights to the software, prorated for the period the franchisee did not have access to the system. However, if the franchisee chooses to continue using the Licensed System after Byrider's termination notice, the franchisee will be responsible for defending any legal action and will indemnify Byrider against all costs, damages, and attorney fees. Byrider is not liable if the infringement claim is based on an altered version of the Licensed System or its combination with programs or data not supplied by Byrider.
The FDD states that Byrider has no further liability to the franchisee regarding infringement claims beyond what is described in the agreement. This means that the franchisee's legal recourse against Byrider for infringement issues is limited to the terms outlined in the agreement. Franchisees should be aware of these limitations and consider the potential risks associated with intellectual property infringement claims when using the Licensed System.