A novel thought about licensing fallen flags....

[Anonymous]

(copied from that Other thread... wish I could have easily linked this instead)

... and then there' s the possibility that a model manufacturer can claim unfair trade practice ... that the UP charges more for a license than it's worth, and that other "features" of their agreement are onerous and can bankrupt a modelling manufacturer.

There's these questions - for instance-

If the UP wants the molds and templates of produicts "no longer in production" (if that's what they specify)...
How would the UP make an assetion that the railroad is entitled to its possession without having "ordered" or "specified" or otherwise compensated the manufacturer for the product?

What constitutes a cessation of production? A year? a month? A break for vacation? A wait for resupply of materials? (Athearn is NOW selling a flat car with load that I bought in 1962!)

Does the UP intend to cover shipping of tooling from China?

Any financial burden attached to the model manufacturer can come with the assertion that it is intended to drive them from the business without any criminal act other thatn using what is obvious to the casual observer - and is thus an unfair trade pracice.

Not that I'd encourage anyone to use a TM without permission... but the UP needs to examine how this opens the UP to legal complaint and what this enforcement does to its _potential_ licensees.
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And then there's the possibility that the RR's can use those un-heralded cars as rolling billboards... the income would FAR surpass the licensing fees!

And- to further the arguements expressed above by dehusman - the company that made _Fruit of the Loom_ underwear was not "Fruit of the Loom"... FotL was a trademark - only! The company made Nothing! And it (the TM) was owned by a railroad (one of those with Pacific in its name - I recall NP... I may be wrong).

[dehusman]

The trademarking issue isn't about trains. The UP isn't just a railroad, over the years it (and its predecessors) have been a cement company, vacation resorts, land developers, mining companies, oil refineries, pipelines, trucklines, airfreight lines, software companies, logistics companies, communications companies and dozens more. If somebody markets a commercial scheduling software package with the UP logo, is it one that a UP Corp subsidiary developed or is it bogus? If a package express truck pulls up in front of your house with Missouri Pacific Truck Lines logo on it, is it legit? If the idea of trains were wiped off the face of the earth, the UP would still trademark and license its logo.

These forums have pretty much proved UP's case for requiring a license. How many dozens of posts are there on the hundreds of threads that say things like "Lets show the UP, lets not buy any of their s" or "I'm going to show the UP by painting all my UP s another color". That shows that even though the UP has nothing to do with the production of the , the distribution or sales of the , the fact that it has a UP logo on it makes the public view it as an extension of the UP. Even though nobody will confuse a 6" long boxcar for the real thing, these forums present plenty of evidence that the "public" views the s as part of the UP.

Dave H.

[Big_Boy_4005]

It's so nice to have a calm intellectual discussion of the issues here, thanks guys.

So, Fiverings, could this be a ploy to inflate the value of the company, in order to borrow more money? A little creative accounting? I hope not, and certainly not on the backs of the hobbyists. Actually, if that is the case, the amount of the licensing fees is nothing compared to the leverage the inflated IP value would give them for borrowing purposes.

Who writes such laws to allow this kind of stuff? Companies didn't resort to this 20 years ago. There must be new laws that make this seem like a legitimate thing to do. Were the laws written this way intentionally, or is this some kind of clever loophole?

Most of us have been busy blaming UP, but in reality they are just trying to take the maximum advantage of a messed up set of laws. Is that what this is all about?

Is this lawsuit just a token investment, to ensure that the logos can be inflated enough in value to warrant the kind of borrowing they need to make the railroad profitable? SCARY THOUGHT!!!!

[AggroJones]

QUOTE: Originally posted by Big_Boy_4005

What they do about the current logo, I don't care. It's theirs, and if they want to charge, fine. Buy it or don't, it's your choice.

But the fallen flags are diffrernt!!!!! It's like trying to collect social security for a dead guy!!![:0][B)][xx(][xx(][xx(][;)]

]

[#ditto] Very logical, Bigboy.

[Anonymous]

Until I read an article in a recent investment newsletter, this UP trademark licencing business didn't make any sense to me. After all, why would a corporation which will be investing billions, yes BILLIONS, of dollars annually for the next several years, just for new locomotives and track improvements, care about models made by Athearn and Lionel?

Is it because they fear inroads might be made in their sales of golf tees, keychains, beer mugs, wooden woo-woo whistles and other brick-a brack bearing the UP logo? (Look at their website--I'm not making up these officially-sponsored products.) I don't think so.

Is it a matter of business necessity that they paint the old "Overland" logo on a token number of boxcars, or repaint a CNW logo on a covered hopper that's about to be outlawed for interchange service due to age? Again, I don't think so.

What the investment newsletter clued me into is the notion that trademarks and trade names, as "intelectual property" or "intangible assets" of a corporation are susceptible to, shall we say, expansive valuation on the balance sheet. In other words, the stated "value" of things like the old MoPac "buzzsaw" logo can be just about whatever the owner claims it to be. And if the owner of such property is as honest as the boys from Enron -- well, you get the drift.

[Big_Boy_4005]

Thanks Alton, that makes this whole thing with the fallen flags even more interesting and confusing. I haven't seen any of that new paint yet, but it does sound like they are trying to jump though all the hoops to make this look good. I wonder if they are using the fallen flags stuff on any of their paper work, like letterhead or business forms.

It could come down to a coin toss. Perhaps if UP is awarded the rights to license the fallen flags, their fees would be limited to the proportion that the defunct railroad's assets comprise the whole. That might be tolerable.

As for the current UP logos, the model manufacturers always have the "laches" defense to fall back on. That basicly says UP waited too long to enforce their rights. Even if UP wins, there should be no back penalty, but future use will have to be paid for.

It's pretty clear that the changes in the intellectual property laws are at the heart of UP's sudden interest in all of this licensing. I know what I want to see happen, but it will be interesting to see what does happen. I still see it going either way, and a possible split over currrent vs fallen flags.

In the end, it will be consumers not the railroads, that decide what these logos are worth. We can still buy undecorated trains.[swg]

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Here's another strange thought. This being a civil case, there does not have to be a jury, but I believe either side can request one. I would think that the defense would benefit most from having one. So, does anyone here live in Omaha?

What a trip that would be, being in the jury pool for this case. I can just hear it now, during the selection process they ask, "Have you ever played with a toy train?" You answer, "Yes", and the railroad's lawyer challenges and you're dismissed.[swg]

[AltonFan]

What I have noticed is that UP has freshly painted cars carrying fallen flag reporting marks and and heralds. I've seen MP, Cotton Belt, and CNW heralds on recently painted cars. I'm guessing this is part of a larger strategy to show that they are still "using" the fallen flag logos.

(The CNW used to have a number of cars still carrying CMO and CGW reporting marks. I was told that this had to do with insurance and financing issues where cars with those reporting marks were still named on an insurance policy or claim, or still had mortgages against them. I imagine UP has similar issues only lots and lots more.)

Someone told me that a lot of the fallen flag trademarks are actually in a sort of limbo. My source told me that when one railroad acquires another, the lawyers would go through the bill of sale, and cross off items they didn't want to pay for. It appears that in a few instances, the fallen flag trademarks were not acquired in order to knock down the final purchase price. So some trademarks, especially the older ones, may be completely orphaned.

(The dirty pool part of what UP is doing is not so much that they are protecting their own historic and current trademarks, but that they went and tried to reregister trademarks that had expired decades ago and were not in use, except on model railroads.)

Oh, about that matter with the PRR trademarks:

They interviewed someone with that insurance company that still holds the PRR trademark. The spokesman said that they were glad the herald was still in use, and hoped that it would remain in use.

[Big_Boy_4005]

Are you sure? I have heard stories about the Pennsy, where some guy tried to claim the keystone for his own benefit and failed. The registration was about to lapse, and he stepped forward to claim it. The application was denied, but I never did hear the final disposition of the case. Clearly whoever owned the rights was not paying attention enough to re register it.

I have heard nothing of the NYC, but that too went into Conrail. That was a government bailout program, if memory serves. I thought that the government had made it's final disposition of the assets long ago. Neither of these railroads are in active use under those names, even though a few of their cars still carry the old paint. By that standard all someone would have to do is preserve one piece in a museum somewhere, and say the railroad is still active. That is not the intent of the law.

Is the Union Pacific still painting cars with WP, SP, C&NW, D&RGW, etc? NO, if one of these cars comes in needing paint, it gets a simple coat of brown, and block letter reporting marks, NO LOGO. This is done for book keeping purposes, not for name brand itentification.

The historical societies are a different deal. I'm not sure if they own the rights to control the use of the old railroads identities, or simply use the old artwork. They are usually non profit organizations.

Maybe the real question is, do these names still exist as seperate corporations? If not they are dead. Many of these companies once had stock. In the process of the merger, old stock was exchanged for new stock, and the obligations and equipment were absorbed. I have every reason to believe, though I have done no research, that the underlying corporations are indeed gone, leaving only a single modern entity.

I think the original Lionel Corporation of New York finally died a few years back. It's name and most famous marks however have never fallen from use, even though it's corporate identity has changed three times since 1969.

These railroads are different, since no new marks are made in their names. I still say that they should fall into the public domain, and the successor should not be entitled to claim the rights to the names, as they do not do business under them anymore.

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After writing all of that, I went looking out on the web, and found this. Very interesting, a list of what happened to different railroads and when. The terms control, merge, and absorb are all explained at the bottom of the linked page.

http://www.northeast.railfan.net/merger.html

[jsoderq]

Actually you are very wrong. The logos are still the property of the owners. PRR and NYC belong to the insurance company that arose from the ashes of Penn Cebtral. Maytag owns the Rock Island. Some fallen flags belong to the historical society who made legal efforts to secure them Mnay of what you assume are fallen flags still belong to the railroad as there are still cars etc with the markings.

[Big_Boy_4005]

I understand that a lot of people are getting tired of all of this garbage about the licensing fees, and the railroad that has made tracks for the courthouse. What they do about the current logo, I don't care. It's theirs, and if they want to charge, fine. Buy it or don't, it's your choice.

But the fallen flags are diffrernt!!!!! It's like trying to collect social security for a dead guy!!![:0][B)][xx(][xx(][xx(][;)]

No bashing here please!!!

[swg]