What happens if Extreme Art Studio's right to use the trademark is challenged?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
We do not have a federal registration for our principal trademarks listed above. Therefore, these trademarks do not have as many legal benefits and rights as a federally-registered trademark. If our right to use the trademark is challenged, you may have to change to an alternative trademark, which may increase your expenses.
You must notify us immediately of any apparent infringement or challenge to your use of any Mark, or of any person's claim of any rights in any Mark, and you may not communicate with any person other than us and our and our affiliates' attorneys regarding any infringement, challenge or claim. We and/or LSO may take the action we deem appropriate and control exclusively any litigation, USPTO proceeding, or other administrative proceeding from the infringement, challenge, or claim, or otherwise concerning any Mark. You must sign the documents and take the actions that, in the opinion of our attorneys, are necessary or advisable to protect and maintain our interests in the Mark. We will reimburse you for your reasonable costs of taking any action that we have asked you to take.
If it becomes advisable at any time for us and/or you to modify or discontinue using any Mark and/or use one or more additional or substitute trade or service marks, you must comply with our directions within a reasonable time after receiving notice. We do not have to reimburse you for your costs, loss of revenue, or other expenses of promoting a modified and/or substitute trademark or service mark.
Under the Franchise Agreement, we will indemnify you against, and reimburse you for, all damages for which you are held liable in any proceeding in which your use of any Mark in compliance with the Franchise Agreement is held to constitute trademark infringement, and for all reasonable costs you incur in the defense of any claim brought against you or in any proceeding in which you are named as a party, only if you have timely notified us of the claim or proceeding and comply with our directions in responding to the proceeding. At our option, we and/or LSO may defend and control the defense of any proceeding arising from your use of any Mark under the Franchise Agreement.
Source: Item 13 — TRADEMARKS (FDD pages 39–40)
What This Means (2024 FDD)
According to Extreme Art Studio's 2024 Franchise Disclosure Document, because the principal trademarks are not federally registered, they do not have as many legal benefits and rights as a federally-registered trademark. If Extreme Art Studio's right to use the trademark is challenged, a franchisee may have to change to an alternative trademark, which may increase their expenses.
The FDD also states that a franchisee must notify Extreme Art Studio immediately of any apparent infringement or challenge to their use of any Mark, or of any person's claim of any rights in any Mark. The franchisee may not communicate with any person other than Extreme Art Studio and its affiliates' attorneys regarding any infringement, challenge or claim. Extreme Art Studio may take the action it deems appropriate and control exclusively any litigation, USPTO proceeding, or other administrative proceeding from the infringement, challenge, or claim, or otherwise concerning any Mark. The franchisee must sign the documents and take the actions that, in the opinion of Extreme Art Studio's attorneys, are necessary or advisable to protect and maintain their interests in the Mark. Extreme Art Studio will reimburse the franchisee for their reasonable costs of taking any action that they have asked the franchisee to take.
Furthermore, if it becomes advisable at any time for Extreme Art Studio and/or the franchisee to modify or discontinue using any Mark and/or use one or more additional or substitute trade or service marks, the franchisee must comply with Extreme Art Studio's directions within a reasonable time after receiving notice. Extreme Art Studio does not have to reimburse the franchisee for their costs, loss of revenue, or other expenses of promoting a modified and/or substitute trademark or service mark.
Under the Franchise Agreement, Extreme Art Studio will indemnify the franchisee against, and reimburse them for, all damages for which they are held liable in any proceeding in which their use of any Mark in compliance with the Franchise Agreement is held to constitute trademark infringement, and for all reasonable costs the franchisee incurs in the defense of any claim brought against them or in any proceeding in which they are named as a party, only if the franchisee has timely notified Extreme Art Studio of the claim or proceeding and comply with Extreme Art Studio's directions in responding to the proceeding. At Extreme Art Studio's option, they may defend and control the defense of any proceeding arising from the franchisee's use of any Mark under the Franchise Agreement.