Who has the right to exclusively control any litigation arising from infringement of Chem Dry patents or copyrights?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
You must notify CDI immediately in writing of any apparent infringement or challenge to your use of any of the patents or copyrights, or of any claim by any person of any rights in any of the patents or copyrights, and may not communicate with anyone other than CDI, CDI's attorneys and your attorneys in connection with any such infringement, challenge or claim. CDI will take such action as it, in its sole discretion, deems appropriate and will have the right to exclusively control any litigation, U.S. Patent and Trademark Office proceeding or any other administrative proceeding arising from such infringement, challenge or claim or otherwise relating to any of the patents or copyrights. You must sign any instruments and documents, provide such assistance and take any action that, in the opinion of CDI's attorneys, may be necessary or advisable to protect and maintain its interests in any litigation or U.S. Patent and Trademark Office or other proceeding or otherwise to protect and maintain CDI's interests in or any of the patents or copyrights.
If it becomes advisable at any time in CDI's sole discretion for CDI and/or you to modify or discontinue the use of subject matter covered by any patent or copyright, you must comply with CDI's directions within a reasonable period of time after receiving notice. However, CDI is not obligated to reimburse you for any expenses or loss of revenue or goodwill arising from any modification or discontinuation of the subject of any patent or copyright.
Source: Item 14 — PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION (FDD pages 48–50)
What This Means (2024 FDD)
According to Chem Dry's 2024 Franchise Disclosure Document, Chem Dry retains exclusive control over any litigation, U.S. Patent and Trademark Office proceedings, or other administrative proceedings related to infringement, challenges, or claims concerning its patents or copyrights. This means that Chem Dry, not the franchisee, decides how to handle legal matters pertaining to its intellectual property.
As a Chem Dry franchisee, you are required to immediately notify Chem Dry in writing of any apparent infringement or challenges to the use of patents or copyrights. You are also obligated to avoid communicating with anyone other than Chem Dry, its attorneys, and your own attorneys regarding such matters. Furthermore, you must sign documents, provide assistance, and take actions deemed necessary by Chem Dry's attorneys to protect the company's interests in any litigation or proceedings.
This arrangement is typical in franchising, where the franchisor owns the brand's intellectual property and must protect it uniformly. While franchisees benefit from using the brand's patents and copyrights, the franchisor bears the responsibility and cost of defending them. However, the FDD also states that Chem Dry is not required to protect the franchisee's right to use the patents or copyrights. This could mean that while Chem Dry controls the litigation, the franchisee may still face business disruptions or losses if the intellectual property is successfully challenged.
Chem Dry does not guarantee the validity of its patents or copyrights, nor does it ensure franchisees will have exclusive rights to operate under them. If Chem Dry deems it advisable to modify or discontinue the use of subject matter covered by any patent or copyright, franchisees must comply with Chem Dry's directions, but Chem Dry is not obligated to reimburse franchisees for any resulting expenses, loss of revenue, or goodwill.