USA – ILLINOIS Law and Practice Contributed by: Carmen D. Caruso, Bill Whitner and Gage Meyers, Carmen D. Caruso Law Firm
For intellectual-property provisions specifically, fed - eral law continues to govern claims arising under federal statutes, including trade mark, copyright or patent infringement, while Illinois contract law ordi - narily governs the interpretation and enforcement of intellectual-property licence agreements. See Bald- win Piano , Inc v Deutsche Wurlitzer GmbH , 392 F3d 881, 883–86 (7th Cir 2004) (applying Illinois law to determine the duration and termination of a trade mark licence); Automation by Design , Inc v Raybestos Products Co , 463 F3d 749, 753–60 and n5 (7th Cir 2006) (“Trademark licence contract disputes, just like copyright licence disputes, are governed by the gen - eral rules of contract interpretation”); Walthal v Rusk , 172 F3d 481, 482 (7th Cir 1999) (stating that, when a licence is silent as to length, it is implied to be indefi - nite and terminable by either side). 8.3 Mandatory Content Illinois law does not prescribe a detailed list of clauses that must appear verbatim in a franchise agreement. Instead, the IFDA overrides or supplements the con - tract on a defined set of topics: • a franchisee’s right not to be terminated except for good cause; • a right to compensation on non-renewal in the cir - cumstances described in 5.2 Franchise Renewal ; • a prohibition on unreasonable and material dis - crimination between similarly situated franchisees; and • a guaranteed right to participate in trade associa - tions without franchisor interference. Because these protections apply as a matter of law regardless of whether the franchise agreement expressly recites them, franchisors are better served drafting agreements or preparing addendum consist - ent with the Act’s requirements rather than attempting to draft around them, since any attempted waiver of these statutory rights is void. 8.4 Prohibited Provisions in Local Law Illinois law has no single list of clauses prohibited in franchise agreements; instead, the restrictions are found in several provisions of the IFDA and other applicable Illinois laws. Void or unenforceable provi - sions include:
• out-of-state forum clauses – a franchise agreement may not require disputes to be litigated outside Illinois, though it may require arbitration outside Illinois, since the restriction does not apply to arbi - tration; • waivers of statutory rights – a franchise agreement may not require a franchisee to waive rights or protections under the IFDA, though this does not prohibit settling or releasing claims relating to an actual or potential lawsuit; • termination without good cause – a franchisor may not rely on a contractual right to terminate an Illinois franchise before the end of its term without good cause, as defined by the IFDA; and • terms that conflict with rescission rights – a liqui - dated-damages provision may be unenforceable to the extent that it conflicts with a franchisee’s statu - tory right to rescind the agreement or recover relief under the IFDA. Franchise agreements are also subject to the same general rules that apply to other Illinois contracts. For example, a court may refuse to enforce a provision that is unconscionable or violates Illinois public policy. 9. Dispute Resolution 9.1 Enforcement of Foreign Judgments Enforcement of Judgments From Other US States Judgments from other US states are generally straightforward to enforce in Illinois. Under the Uni - form Enforcement of Foreign Judgments Act, a judg - ment creditor may file an authenticated copy of a qualifying judgment and an affidavit stating the par - ties’ names and last-known addresses with the circuit clerk in any Illinois county; notice is then mailed to the debtor, and the judgment thereafter has the same effect and enforcement procedures as an Illinois judg - ment. See 735 ILCS 5/12-650-653. A debtor may seek to stay or challenge enforcement only on limited grounds, such as that the rendering court lacked jurisdiction or that the judgment is not entitled to full faith and credit; the debtor generally may not relitigate the merits or raise defences that could have been asserted in the original proceeding.
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