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Intellectual property

Through a franchising agreement, the franchisor grants the franchisee the right of use of its trademark rights. An informal agreement is sufficient to validly grant the licence. It can also be agreed that the franchisee's entitlement to use the trademark is recorded in the trademark register. A registration of the trademark register is, however, not a necessary prerequisite for the franchisee to be entitled to use the trademark. It may be stipulated in the franchise agreement that certain types of use of the mark, for example, in advertising, require the franchisor's consent.

Signage has major economic significance to the success of a franchise system, and the franchisor must vouch for the fact that its rights are being validly maintained. Such signage is a 'property usually required in commerce' within the meaning of Section 922 of the Austrian Civil Code (ABGB), so that if it is lacking, the franchisee may be entitled to assert warranty claims. A complete exclusion of any such claims is generally considered unethical under Section 879 of the ABGB. The franchisor is required to protect the intellectual property rights accordingly. In addition, the franchisee is also entitled to assert the right to pursue infringements of intellectual property rights, as the mark ranks among the trademarks protected under Section 9 of the Austrian Act on Unfair Competition.

The 'trade dress' plays an important role if the franchise system is operated in the form of a retail outlet (e.g., a special interior, choice of colour, staff uniform and packaging). The protection of trade dress is not dependent upon registration; it must, however, have gained public recognition.

The protection of the company or its name begins with its registration in the commercial register.