Under what conditions will Microsoft defend Embassy Suites franchisees against infringement claims?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
e maximum extent permitted by law, any warranties imposed by law concerning the products are limited to the same extent and the same one year period. This warranty does not apply to components of products which you are permitted to redistribute under applicable product use rights, or if failure of the product has resulted from accident, abuse or misapplication. If you notify Microsoft within the warranty period that a product does not meet this warranty, then Microsoft will, at its option, either (1) return the price paid for the product or (2) repair or replace the product. To the maximum extent permitted by law, this is your exclusive remedy for any failure of any commercial product to function as described in this paragraph.
- c. Free and beta products. To the maximum extent permitted by law, free and beta products, if any, are provided "as-is," without any warranties. You acknowledge that the provisions of this paragraph with regard to pre-release and beta products are reasonable having regard to, among other things, the fact that they are provided prior to commercial release so as to give you the opportunity (earlier than you would otherwise have) to assess their suitability for your business, and without full and complete testing by Microsoft.
- d. NO OTHER WARRANTIES. TO THE EXTENT PERMITTED BY APPLICABLE LAW, MICROSOFT DISCLAIMS AND EXCLUDES ALL REPRESENTATIONS, WARRANTIES AND CONDITIONS, WHETHER EXPRESS, IMPLIED OR STATUTORY, OTHER THAN THOSE IDENTIFIED EXPRESSLY IN THIS AGREEMENT, INCLUDING WITHOUT LIMITATION WARRANTIES OR CONDITIONS OF TITLE, NON-INFRINGEMENT, SATISFACTORY QUALITY, MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO THE PRODUCTS AND RELATED MATERIALS. MICROSOFT WILL NOT BE LIABLE FOR ANY PRODUCTS PROVIDED BY THIRD PARTY VENDORS, DEVELOPERS OR CONSULTANTS IDENTIFIED OR REFERRED TO YOU BY MICROSOFT UNLESS SUCH THIRD PARTY PRODUCTS ARE PROVIDED UNDER WRITTEN AGREEMENT BETWEEN YOU AND MICROSOFT, AND THEN ONLY TO THE EXTENT EXPRESSLY PROVIDED IN SUCH AGREEMENT.
- e. Defense of infringement and misappropriation claims. We will defend you against any claims, made by an unaffiliated third party, that any commercial product, fix or service deliverable infringes its patent, copyright or trademark or misappropriates its trade secret, and will pay the amount of any resulting adverse final judgment (or settlement to which we consent):
You must notify us promptly in writing of the claim and give us sole control over its defense or settlement. You agree to provide us with reasonable assistance in defending the claim, and we will reimburse you for reasonable out of pocket expenses that you incur in providing that assistance. The terms "misappropriation" and "trade secret" are used as defined in the Uniform Trade Secrets Act, except in the case of claims arising under any license agreement governed by the laws of any jurisdiction outside the United States, in which case "misappropriation" will mean intentionally unlawful use and "trade secret" will mean "undisclosed information" as specified in Article 39.2 of the TRIPs agreement.
Our obligations will not apply to the extent that the claim or adverse final judgment is based on (i) your running of the product or fix after we notify you to discontinue running due to such a claim; (ii) your combining the product or fix with a non-Microsoft product, data or business process; (iii) damages attributable to the value of the use of a non-Microsoft product, data or business process;
Source: Item 23 — RECEIPTS (FDD pages 97–305)
What This Means (2025 FDD)
According to Embassy Suites's 2025 Franchise Disclosure Document, Microsoft outlines specific conditions under which it will defend franchisees against infringement claims. Microsoft will defend an Embassy Suites franchisee against claims from an unaffiliated third party alleging that a commercial product, fix, or service infringes on a patent, copyright, or trademark, or misappropriates a trade secret. In such cases, Microsoft will cover the costs of any resulting adverse final judgment or settlement, provided they consent to the settlement.
However, this defense is contingent on the franchisee promptly notifying Microsoft in writing about the claim and granting Microsoft sole control over the defense or settlement process. The franchisee must also provide reasonable assistance in defending the claim, for which Microsoft will reimburse reasonable out-of-pocket expenses. The terms 'misappropriation' and 'trade secret' align with the Uniform Trade Secrets Act, with specific interpretations for claims arising outside the United States, referring to intentionally unlawful use and undisclosed information as defined in Article 39.2 of the TRIPs agreement.
Microsoft's obligations do not apply if the claim or adverse judgment is based on certain franchisee actions, such as continuing to use the product after being notified to stop, combining the product with non-Microsoft products or processes, damages related to non-Microsoft products, altering the product, distributing it to third parties, using Microsoft's trademarks without consent, or improperly acquiring a trade secret. If Microsoft receives information about an infringement claim, it may choose to either secure the franchisee's right to continue using the product, modify or replace the product to eliminate infringement, or, if use is enjoined by a court, procure the right to continued use, replace it, modify it, or refund the amount paid and terminate the license. The document specifies that this section provides the exclusive remedy for third-party infringement and trade secret misappropriation claims.