What is excluded from the intellectual property infringement indemnification provided to Crowne Plaza franchisees?
Crowne_Plaza Franchise · 2025 FDDAnswer from 2025 FDD Document
For avoidance of doubt, the obligations under this Section 15.2 shall not apply to Bank with respect to Non-Bank Services.
- 15.3 Intellectual Property Infringement Indemnification. Processor will indemnify, defend, and hold you harmless from and against any third party claim alleging that the Services infringe or misappropriate any patent, copyright, trademark, service mark, trade secret, or other proprietary right (collectively for purposes of this Section 15.3, "Intellectual Property Rights") of such third party; provided that the foregoing indemnification under Section 15.3 shall not apply to that portion (and only that portion) of any third party claim that is caused by, results from, or arises out of: (a) your failure to use the Services as required under the Agreement; (b) your configuration, modification, or use of the Services in combination with other products or services (including software, equipment, or systems) that are not provided by Processor and that combination creates a process or method that is the causation for the infringement or misappropriation; (c) Processor's use of any designs, artwork, concepts, trademark specifications, or other copyrighted materials provided by you or on your behalf (including by IHG) in connection with the Agreement; or (d) Processor's custom development of the Services pursuant to a request by you or IHG and that development creates a process or method that is the causation for the infringement or misappropriation (the claims (or portions of claims) referred to in the foregoing clauses (a), (b), (c) and (d) are herein referred to collectively as the "Excluded Claims").
Source: Item 23 — Receipts (FDD pages 100–424)
What This Means (2025 FDD)
According to the 2025 FDD, Crowne Plaza's intellectual property infringement indemnification obligations do not apply to certain third-party claims. Specifically, the indemnification does not cover claims caused by the franchisee's failure to use the services as required under the agreement. This means that if a franchisee deviates from the prescribed usage of the services and this leads to an infringement claim, Crowne Plaza will not be responsible for defending or indemnifying the franchisee.
Additionally, the indemnification does not extend to situations where the franchisee configures, modifies, or uses the services in combination with other products or services not provided by the franchisor, and this combination results in the infringement. This clause protects Crowne Plaza from liability arising from a franchisee's integration of third-party elements with the franchisor's services.
Furthermore, Crowne Plaza is not liable for claims resulting from the use of designs, artwork, trademark specifications, or other copyrighted materials provided by the franchisee or IHG. This includes instances where the franchisor uses materials provided by the franchisee in connection with the agreement, and these materials lead to an infringement claim. Finally, the indemnification does not apply to custom development of the services done at the request of the franchisee or IHG, where such development causes the infringement. These exclusions are collectively referred to as "Excluded Claims."
In practical terms, a Crowne Plaza franchisee needs to adhere strictly to the franchisor's guidelines and avoid unauthorized modifications or combinations with external products to maintain the protection of the intellectual property infringement indemnification. It is important for franchisees to understand these exclusions to assess their potential risks and ensure they operate within the bounds of the franchise agreement to avoid incurring liabilities not covered by the franchisor.