Is Chocolate Fish Coffee required to take action if notified of trademark infringement?

According to Chocolate Fish Coffee's 2024 Franchise Disclosure Document, franchisees are obligated to notify Chocolate Fish Coffee of any use of, or claims to, a trademark that is identical or confusingly similar to the trademarks licensed to them. However, Chocolate Fish Coffee is not required to take any specific action upon receiving such notification. Chocolate Fish Coffee retains the right to control any administrative proceedings or litigation involving a trademark licensed to the franchisee.

This means that while franchisees must inform Chocolate Fish Coffee of potential trademark infringements, Chocolate Fish Coffee has the discretion to decide how to respond. This could include ignoring the infringement, negotiating with the infringing party, or pursuing legal action. The franchisee does not have the power to force Chocolate Fish Coffee to act.

However, Chocolate Fish Coffee will defend the franchisee (at their own expense) against any legal action by a third party alleging trademark infringement, provided the franchisee uses the trademarks in accordance with the franchise agreement. Chocolate Fish Coffee will also cover expenses and damages if the legal action is resolved unfavorably to the franchisee. This protection is a significant benefit for franchisees, as trademark litigation can be costly and time-consuming.

It is important for prospective franchisees to understand that while they are protected from infringement claims when using Chocolate Fish Coffee's trademarks correctly, they do not have the right to independently enforce those trademarks. The control over trademark enforcement remains with Chocolate Fish Coffee. Franchisees should clarify with Chocolate Fish Coffee what factors they consider when deciding whether to take action against potential infringers.