MTH VS UP. This Madness Must End (Lawyers I want Options)

[Anonymous]

Hi, While I am normally a resident of the Model Railroader forum, This concernes the Toy Train people to Please share your thoughts with me.

While I am not fond of MTH products or their lawsuit (or is it lawsuits?) over DCC. The antics of Union Pacific can no longer be tolarated.

I want to know of all of us start a lawsuit, can we get class action status and how many of it it will take and on what grounds can we sue to win. And is there a lawyer or group of laywers who are also model railroaders crazy eneugh to take this on.

Something Needs to be done before I start considering assassanation as a viable option. (Yes I am that angry over this. )

As is obvious, I am on the side of MTH, Who's side are you on?

[spankybird]

Maybe a better Idea is to buy ONE share of UP stock. NOW you have voting rights. If enough of us own stock, would they not have to lession to their stock holders[?]

[jimhaleyscomet]

I think this Lawsuit is really heavy handed. However, they probably are in the right. There is no crime against being a jerk! We just have to face up to the fact that we (the hobby) has had it very good for a long time even though we had no legal standing.

Jim H

[Warburton]

Yeah, like a hundred years! UP can't claim they need to protect their trademarks and get paid for the use of them NOW when they allowed model railroad manufacturers to use their name and logo for free for a hundred years previous! I think the judge will tell them to go home and get a life (in legal terms, of course). UP gave up it's right to be compensated by their silent assent to all that has gone before!

[ChiefEagles]

Silly but, "What goes around, comes around" or "Pay back is h-ll".

[lionelsoni]

I have the impression that there is no restriction against depicting trademarks for artistic purposes. Surely Andy Warhol didn't have to get a license to paint pictures of Cambells Soup cans. Is there a lawyer here who would know?

It seems to me that a good argument can be made that the train models that we are concerned with are in fact highly representational sculpture. So, if I am right in my conjecture, no one should have to pay UP for making them.

[laz 57]

QUOTE: Originally posted by Warburton

Yeah, like a hundred years! UP can't claim they need to protect their trademarks and get paid for the use of them NOW when they allowed model railroad manufacturers to use their name and logo for free for a hundred years previous! I think the judge will tell them to go home and get a life (in legal terms, of course). UP gave up it's right to be compensated by their silent assent to all that has gone before!

Seems to me like the judges are going to say this is a Grandfather Clause here it was used in the past, no one complained so what is done is done.
laz57

[AntonioFP45]

Laz57,

I hope that you are right.

However guys, we have to consider that before 1950 the majority of corporations in North America did not rigorously act to protect trademarks and logos. During the late 70s and 80s that changed drastically. With the big sports franchises, auto makers and Disney jumping onboard the trademark wagon, it was only natural that other corporations, including railroads would follow sooner or later.

I still remember vendors in malls and flea markets back in the early 80s selling T-shirts and hats with airbrushed Disney figures on them. Once Disney's lawyers went to work, these quickly dissappeared.....virtually overnight. My sister used to make T-shirts with Disney characters as a "side income". She stopped cold turkey. A while later the corporate owners of Warner Bros followed suit. How many of you guys that were around in the 60s and 70s remember seeng Bugs Bunny, Porky, Yosemite Sam, or Daffy Duck T-shirts? I bet a lot of them were unlicensed.

Today we now see Disney and Warner Bros. stores in the malls selling the "Official" licensed products. Times have changed indeed.

The point I'm making is that while we don't like UP's action (I certainly don't) it may not be as easy a battle as it appears to be regarding a grandfathering type of clause.

Like Athearn, MTH may just have to settle, find a way to absorb the cost, and move forward. If you read the actual licensing requirements and do the math, the costs of model locomotives, on average, will likely increase $2.00 to $5.00...........not the $10 to $20 as some that are in panic mode claim. The $10 to $20 extra would be from the manufacturer or store.....which sounds a bit like profit padding.

Peace and High Greens

[tgovebaker]

There's nothing we can do. Antonio is right about the evolution of licensing agreements. On top of that, model railroads no longer serve the same advertising function they once did. Whereas in 1950 the "Super Chief" got great free advertising from Lionel, that dynamic is different. UP's customers today are usually large corporations and other good-sized businesses, obviating the need for free advertising to a bunch of folks with layouts in their basements. Moreover, at a time when UP is struggling to get its network velocity up in order to compete with BNSF, CN, and the rest of them -- particularly in terms of stock prices -- every last bit of revenue helps.

Of course there is, at present, no reason why you can't simply print your own UP decals...

[beefmalone]

The simplest thing would be for all the MFGs to get together and quit releasing UP stuff entirely.

[Bob Keller]

Well, I've said for years I'd buy a Challenger or Big Boy in New York Central. Maybe its time the manufacturers thought out of the box!

[Anonymous]

Yes of course, then they have to stop making cars with, John Deere, Coca Cola, Pepsi, Hershey’s, Budweiser... Oh, and I have seen models with Ford, Porsche, Kentucky Fried Chicken…
It's amazing all the people who just don't respect the "free advertising" we give them
Give me one example of how a toy train helps Union Pacific get more shippers.

[AntonioFP45]

QUOTE: Originally posted by Ogaugeoverlord

Well, I've said for years I'd buy a Challenger or Big Boy in New York Central. Maybe its time the manufacturers thought out of the box!

That's an idea.

My suggested course of action is simple. Do what Athearn did years back.......Offer locomotives in everybody's favorite railroad: = U.N.D.E.C.O.R.A.T.E.D.....................Buy it and it's off to Air Brush land![;)][:D][8D]

As for decals.........make an appointment with "Captain Computer" and his first officer "Commander Printer", along with shipmate "Lt. Decal Paper"
Or....just buy the decals![;)][8D]

[FJ and G]

In the latest (Feb05) issue of Trains mag (sister mag to CTT), is an article about UP's "basement" museum.

Interestingly, there's O gauge models (looks O scale) of UP trains down there; undoubtedly purchased before UP slapped taxes (tarrifs?) on logo purchases. Don't know which company the toy trains are from.

My beef w/toy trains is that they pass along the price increase to all purchasers instead of UP brand only. Some of the HO and other scales only charge extra for UP and its predecessor roads.

[Craignor]

How much money are they sueing for?

[TomDiehl]

QUOTE: Originally posted by Ogaugeoverlord

Well, I've said for years I'd buy a Challenger or Big Boy in New York Central. Maybe its time the manufacturers thought out of the box!

Challengers were used on other railroads than the UP

[TomDiehl]

And since he insists on posting this on ALL the forums, this is my answer pasted from the Model Railroader forum:

The mathmatics of this are very interesting.

Taking from examples given above:

Athearn SD40 model carries a $90 retail price for all road names, but they're going to charge an extra $10 for the UP decorated ones. 3% of $90 is $2.70 which is to be paid to the Union Pacific, so where does the other $7.30 go? Plus if you read the licensing agreement (bottom of page 4) the royalty is based on the WHOLESALE price, not retail, so the amount paid to the UP will be even LESS than $2.70.

Sounds like the accusations of "profiteering" are aimed at the wrong company.

[dwiemer]

My answer is persona;, for me, I will not purchase any UP items. I may even send the corporation a nasty gram letting them know of my displeasure.
Dennis

[dwiemer]

My answer is persona;, for me, I will not purchase any UP items. I may even send the corporation a nasty gram letting them know of my displeasure.
Dennis

[Anonymous]

QUOTE: Originally posted by TomDiehl
Athearn SD40 model carries a $90 retail price for all road names, but they're going to charge an extra $10 for the UP decorated ones. 3% of $90 is $2.70 which is to be paid to the Union Pacific, so where does the other $7.30 go? Plus if you read the licensing agreement (bottom of page 4) the royalty is based on the WHOLESALE price, not retail, so the amount paid to the UP will be even LESS than $2.70.

The extra money is eaten up by UP's burdensome licensing requirements.

[TomDiehl]

QUOTE: Originally posted by Daniel Lang

QUOTE: Originally posted by TomDiehl
Athearn SD40 model carries a $90 retail price for all road names, but they're going to charge an extra $10 for the UP decorated ones. 3% of $90 is $2.70 which is to be paid to the Union Pacific, so where does the other $7.30 go? Plus if you read the licensing agreement (bottom of page 4) the royalty is based on the WHOLESALE price, not retail, so the amount paid to the UP will be even LESS than $2.70.

The extra money is eaten up by UP's burdensome licensing requirements.

Most manufacturers already collect the basic data as to roadnames and models shipped, if for no other reason to determine what sells. The rest is just a simple math problem.

[TheStationmaster]

The costs for the licensee go beyond the royalty paid to U.P. I've heard the actual cost is about 2x-3x the royalty payment.

Aside from the paperwork cost for each product, the agreement requires an an annual independent audit. Maybe not a big deal for big companies that probably do this anyway, but for the garage operations out there, that's not attractive at all. The potential for delays can also be a big product killer. In retail, holding up a product for even a few days can result in loss of shelf space, distributor orders and wasted advertising expenditures. Worse, a manufacturer has to calculate the risk that the licensor may reject the product entirely after a huge investment in design and tooling.

I think we also have to look at another potential danger to our industry. GM implemented a licensing program for automobile models and toys and later decided that there was a liability risk from models samller than 1:64 scale (choking hazard). A similar move in the railroad licensing field could kill N and Z scale.

My take on the legal issue (not a lawyer, do not even play one on TV):

1. Model are not just "Merchandise", but are artistic depictions of real world objects and are protected by the First Amendment. There are a number of specific trademark cases that back this (New York Racing ***'n v. Perlmutter Publishing, Roll Hall of Fame and Museum v. Gentile Productions).

2. Union Pacific has acquiesced and even promoted this usage for decades. I believe this invalidates their trademark claims for non-transportation uses.

3. Union Pacific no longer promotes the fallen flag brands, painting a few "Heritage" units would probably not be considered a bonafide use and those marks should be considered abandoned (Exxon Corp. v. Humble Exploration Co.). An interesting case on abandonment is "Major League Baseball Properties, Inc. v. Sed Non Olet Denarius, Ltd" in which the LA Dodgers attempted sue the Brooklyn Dodger Sports Bar and Restaurant, which also leads me to:

4. The standard for trademark infringement is "Likelihood of confusion" and I really doubt that UP can credibly show that consumers are likely confuse a model train manufacturer and an actual railroad - unless somebody has been calling MTH about moving a million tons of grain to Portland.

[lionelsoni]

Stationmaster's point is very similar to and supports the one I tried to make much earlier in this topic.

[andregg1]

I love my "LIONEL LINES"
Andre.