The Licensing Dilemma

[dehusman]

The UP liscense is on the wholesale price of the product produced by the manufacturer. It is not based on the retail price.

The UP license is 3% of the wholesale price. $2 is 4.1% of $48. The wholesale price is LESS than $48. Lets say there is 20% markup on retail over wholesale, that would make the wholsale price about $38. $2 is over 5% of the wholesale price. So Kato is charging you almost double the license fee to run a query on their sales database.
Oh by the way, they kept track of how many UP engines and cars they produced before the whole license thing came up, that's why they all have different part numbers.

Bottom line, if the wholesale price is $38, Kato is charging you $1.14 for the license and $.86 per car to fill out a form a couple times a year.

Dave H.

[randybc2003]

It's not the money that's the real pain in the seat-it's the paperwork trace. If A run doesn't make full sale does the UP pay back license fee? Do they trace all purchases, and when do they pay? If a manufacturer purchases printed decals and applies them to a model - do they pay on the decals or on the model? If they "include" the decals in the model, do they pay only on the decals? Other than "protecting" their trademark - what is UP guaranting? Accuracy? Correctness?

Look at the KATO add in the latest Model Railroader (I think) - it is an add for the latest of Kato's HO "Business Cars":
All Others-$48.00
UP - advertised licensed product: $50.00

There's some of your answers there.

[d4fal]

I had just read John Sipple's article, and he admits that he is no expert at law. He made a few funny comments, but this is serious.

Lionel etc are not signing licensing agreements with UP. Reasons are not given. Many others are getting their licensing agreements, good to hear this. They should.

The logo does belong to UP, no question there. It's like using it on a t-shirt, hat, or any other soveignier. UP should get its share, and it needs to give prior permission for these commercial ventures. After all, it is UP's trademark. I wonder if a non-commercial shop such as one that builds for himself whatever he wants, and not for commercial sale or profit, if he would have to get a license, too. I know the laws around the world are very different froone jurisdiction to another.

[ClinchValleySD40]

It's gotten more silly. One of the software providers to create car cards and waybills has been advised to contact one of the major railroads about getting a license. And his product comes with the railroad name BLANK.

[willy6]

i recommend you read the editorial by John Sipple in the lastest issue of Model Railroad News....................i'ts note worthy

[d4fal]

About the comments from the Editor, Terry Thompson, in the September 2004 issue of Model Railroader, his assumption the the licensing issue will be somewhat costly or detrimental to the hobby or the industry supporting this hobby, I think is a bit exaggerated. I doubt that the actual funds involved will be all that much, on a per unit basis.

The railroads should be permitted to license their trademarks and logos, but it would not amount to very much on a per unit basis, or it shouldn't. The other part of this topic that was not brought up was the actual licensing of the model designs based upon the manufacturers of the original locomotives or rolling stock, etc. Sure, some of these are no longer existing, and I'm sure that there should be some time constraints, and an allowance for artistic license, and I'm sure that these license fees should hardly amount to very much either.

I wonder if HotWheels or other toy car manufacturers have to get a license from Ford, GM, etc to make models based upon their products.

The total amount given to these manufacturers and railroads will in all likelihood amount to less than what was alluded to in the editorial.

I hope this makes sense, as I had just come off a rather long road trip and not yet had any sleep.