Under what conditions will Kidokinetics defend a franchisee against a third-party claim that the MOBILNK Software infringes a patent?
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' 2024 Franchise Disclosure Document, Kidokinetics may elect to defend a franchisee against a third-party claim that the MOBILNK Software infringes a U.S. patent, copyright, or trade secret. This decision to defend the franchisee is at Kidokinetics' sole discretion. If Kidokinetics chooses to defend, it will do so at its own expense and will cover all damages that a court finally awards.
However, this defense is conditional. The franchisee must promptly notify Kidokinetics in writing of the claim. Furthermore, the franchisee must allow Kidokinetics to control the defense and cooperate with Kidokinetics in the defense or any related settlement negotiations. If these conditions are met, Kidokinetics may provide a defense.
The FDD also states that Kidokinetics has no obligation to defend the franchisee if the claim is based on a version of the KIDOLINK Software that is modified without Kidokinetics' authorization or is combined, operated, or used with any product, data, or apparatus not specified or approved by Kidokinetics. The franchise agreement specifies that this section outlines the entire obligation of Kidokinetics and its affiliates to the franchisee regarding any claim of infringement.