Who owns the principal trademark that Desi District licenses to franchisees?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
Item 13 TRADEMARKS
Principal Trademark
The following is the principal trademark that we license to you. This trademark is owned by our affiliate, Desi District, LLC. It is registered on the Principal Register of the United States Patent and Trademark Office.
| Trademark | Registration Date | Registration Number |
|---|---|---|
| Jan. 23, 2024 | 7289724 | |
| Apr. 23, 2024 | 7362758 |
Because the federal trademark registration is less than six years old, no affidavits are required at this time. The registration has not yet been renewed, but we intend to do so at the time they are legally required.
Determinations
There are no currently effective material determinations of the United States Patent and Trademark Office, the Trademark Trial and Appeal Board, or any state trademark administrator or court. There are no pending infringement, opposition, or cancellation proceedings.
Litigation
There is no pending material federal or state court litigation regarding our use or ownership rights in a trademark.
Agreements
Desi District, LLC, our affiliate, owns the trademarks described in this Item. Under an Intercompany License Agreement between us and Desi District, LLC, we have been granted the exclusive right to sublicense the trademarks to franchisees throughout the United States. The agreement is of perpetual duration. It may be modified only by mutual consent of the parties. It may be canceled by our affiliate only if (1) we materially misuse the trademarks and fail to correct the misuse, or (2) we discontinue commercial use of the trademarks for a continuous period of more than one year.
Source: Item 13 — TRADEMARKS (FDD pages 40–42)
What This Means (2024 FDD)
According to Desi District's 2024 Franchise Disclosure Document, the principal trademark that Desi District licenses to its franchisees is owned by Desi District, LLC, which is identified as an affiliate of the franchisor. Desi District, LLC has granted Desi District the exclusive right to sublicense these trademarks to franchisees throughout the United States through an Intercompany License Agreement. This agreement is perpetual and can only be modified by mutual consent of both parties. Desi District, LLC can cancel the agreement if Desi District misuses the trademarks and fails to correct the misuse, or if Desi District discontinues commercial use of the trademarks for over a year. However, the agreement specifies that the termination of the Intercompany License Agreement will not affect the franchisee's rights.
Desi District protects the franchisee's right to use the principal trademarks and will defend the franchisee (at Desi District's expense) against legal actions by a third party alleging infringement. Desi District will also indemnify the franchisee for expenses and damages if the legal action is resolved unfavorably to the franchisee. However, Desi District may require the franchisee to modify or discontinue using a trademark at the franchisee's expense. The franchisee is obligated to notify Desi District of any use of, or claims to, a trademark identical or confusingly similar to the licensed trademark, but Desi District is not required to take affirmative action upon notification. Desi District retains the right to control any administrative proceedings or litigation involving a trademark licensed to the franchisee.
For a prospective franchisee, this means that while Desi District manages the trademarks, the actual ownership resides with their affiliate, Desi District, LLC. The franchisee is protected from trademark infringement claims, but must also adhere to Desi District's directions regarding trademark usage, including potential modifications or discontinuation. The franchisee should be aware that while Desi District will defend against infringement claims, they may pass on costs related to modifying trademark usage if required.