What is a Red Wagon Club franchisee required to do in response to directions from Red Wagon Club regarding a trademark infringement proceeding?
Red_Wagon_Club Franchise · 2024 FDDAnswer from 2024 FDD Document
y litigation or 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 Marks. We will reimburse you for all damages and expenses that you incur in responding to any trademark infringement proceeding disputing your use of any Marks, if you have notified us immediately of the proceeding, and complied with our directions in responding to it. You must not contest, or assist any other person in contesting, the validity of our and RWC IP's ownership of the Marks. Your use of the Marks and any goodwill established by that use are exclusively for our and RWC IP's benefit.
Source: Item 13 — TRADEMARKS (FDD pages 34–35)
What This Means (2024 FDD)
According to Red Wagon Club's 2024 Franchise Disclosure Document, a franchisee must comply with Red Wagon Club's directions when responding to a trademark infringement proceeding. Specifically, the franchisee must sign documents and take actions deemed necessary or advisable by Red Wagon Club's attorneys to protect and maintain their interests in the trademarks. The franchisee is obligated to notify Red Wagon Club immediately of any apparent infringement or challenge to the use of any mark.
In the event of a trademark infringement proceeding, Red Wagon Club retains exclusive control over any litigation or proceeding concerning any mark. The franchisee is prohibited from communicating with any party other than Red Wagon Club and its attorneys regarding any infringement, challenge, or claim. This ensures that Red Wagon Club maintains a unified and strategic approach to protecting its trademarks.
Red Wagon Club will reimburse the franchisee for all damages and expenses incurred in responding to a trademark infringement proceeding disputing the franchisee's use of any marks, provided that the franchisee has promptly notified Red Wagon Club of the proceeding and complied with their directions. Furthermore, Red Wagon Club will indemnify the franchisee against, and reimburse them for, all damages for which they are held liable in any proceeding where their use of any mark in compliance with the Franchise Agreement is held to constitute trademark infringement. This protection is contingent upon the franchisee having timely notified Red Wagon Club of the claim or proceeding and complying with their directions in responding to it.
It is important to note that the franchisee must not contest, or assist any other person in contesting, the validity of Red Wagon Club's ownership of the marks. The franchisee's use of the marks and any goodwill established by that use are exclusively for the benefit of Red Wagon Club. This underscores the importance of the trademarks to the Red Wagon Club system and the franchisee's role in upholding their integrity.