What is the Kidokinetics franchisee's obligation regarding cooperation with Kidokinetics in the defense against a software infringement claim?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
If a third party claims that the MOBILNK Software infringes any U.S. patent, copyright, or trade secret, Franchisor may elect, in its sole discretion, to defend Franchisee against such claim at Franchisor's expense and pay all damages that a court finally awards, provided that Franchisee promptly notifies Franchisor in writing of the claim, and allows Franchisor to control, and Franchisee cooperates with Franchisor in, the defense or any related settlement negotiations.
If such a claim is made or appears possible, Franchisor may, at its option, secure for Franchisee the right to continue to use the KIDOLINK Software or modify or replace the KIDOLINK Software so that it is non-infringing.
If neither of the foregoing options is available in Franchisor's judgment, Franchisor may terminate the license granted by this Agreement and require Franchisee to return the KIDOLINK Software without compensation.
Franchisor has no obligation with respect to any claim based on a version of the KIDOLINK Software that is modified without Franchisor's authorization or is combined, operated or used with any product, data, or apparatus not specified or approved by Franchisor.
THIS SECTION 6.D.
STATES THE ENTIRE OBLIGATION OF FRANCHISOR AND FRANCHISOR'S AFFILIATES TO FRANCHISEE WITH RESPECT TO ANY CLAIM OF INFRINGEMENT.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, if a third party claims that the MOBILNK Software infringes on any U.S. patent, copyright, or trade secret, Kidokinetics may choose to defend the franchisee against the claim. If Kidokinetics decides to defend the franchisee, it will do so at its own expense and will pay any damages awarded by a court.
However, the franchisee has obligations to Kidokinetics. The franchisee must promptly notify Kidokinetics in writing of the claim. The franchisee must also allow Kidokinetics to control the defense and cooperate with Kidokinetics in the defense or any related settlement negotiations.
Kidokinetics also has the option to secure the franchisee's right to continue using the KIDOLINK Software or modify or replace the software to make it non-infringing. If neither of these options is available, Kidokinetics may terminate the license and require the franchisee to return the software without compensation. Kidokinetics has no obligation regarding claims based on unauthorized modifications to the software or its use with unapproved products. This section outlines Kidokinetics's entire obligation to the franchisee regarding infringement claims.