Kadee to take on UP

[davekelly]

Some very interesting points are being brought up on this topic. This is why it will be very interesting to see what the result will be if this case were to make it to trial. many precednets will be set. What is "fair use" as it pertains to models. What would be considered defense of one's trademark as it pertains to models? While I do not have actual knowledge, I am assuming that many model manufacturers pay royalties as they have determined that it is cheaper than bieng suedAlso there is something to be said about being able to advertise "officially licenced." While this may only mean that a model can have a blue oval on it that says "Ford" I'm sure many folks will believe that somehow Ford has approved the model as being accurate. Either option could explain whyikle the model car manufacturers pay royalties. As an attorney, I have mixed feelings. I think UP's attorney dropped the ball. A person or entity has the right to protect its property, but a compromise position whereby a no fee licence was given in exchange for either UP approval of each product or in exchange for free PR (see my post above) would be more beneficial to his/her client as opposed to possible negative image. (Imagine sometime in the future when UP asks Congress for a break on something and a Congressman says "aren't you the guys who want to make profit on kid's trains?"). Of course we don't know what UP's attorneys might have suggested as it is the client that makes the final decision on how to proceed. It will very interesting to see how this thing unfolds.

[IRONROOSTER]

QUOTE: Originally posted by dehusman

Articles i have read on the plastic military problem says that the royalites are up to 100% of the price of the . The UP is has a 3% of wholesale fee.

http://www.uprr.com/aboutup/licensing/up_licensee_model.pdf

Dave H.

True, but they also want it up front which means the manufacturer has to have cash on hand or borrow.
Enjoy
Paul

[Robert Langford]

I'm all for KD. But I don't think they have a chance against big lawers. Two years ago I had both my knees replaced, My doctor gave me the wrong medication, I tried to sue. What I ended up with was a heart attack, two strokes, blood clots on my brain, and the loss of two toes. All caused by the medication, you can't beat the big boys. I wish KD good luck in their fight.
BOB

[dehusman]

Articles i have read on the plastic military problem says that the royalites are up to 100% of the price of the . The UP is has a 3% of wholesale fee.

http://www.uprr.com/aboutup/licensing/up_licensee_model.pdf

Dave H.

[Anonymous]

Are these claims based on fact or mere speculation? In terms of dollars and cents, how much exactly does licensing add to the cost of a model? For example, how much are the trademark owners charging the 1/25 scale vehicle manufacturers for use of their trade marks which is causing such a scarcity? Please cite some verifiable sources.

As was stated here or elsewhere, manufacturers seem to be charging the same for undecorated models as they do for those with roadnames. That suggests to me that the sky hasn't fallen yet.

Some facts might convince me that there is a problem. "Chicken Little" cries in capital letters doesn't offer evidence of a crisis.

Wayne

[bcammack]

QUOTE: Originally posted by gvdobler

bcammack

Ok oranges for oranges.

AMT makes a model of the Edsel as a car kit and oh my, they pay a licsense fee.
It's that "acurate little replica" with a logo that does it, sorry.

You can have the last word.

Jon - Las Vegas

Excellent point! What's the ratio of contemporary 1:25 scale plastic models to repops of vehicles from the 60s and 70s? Miniscule. Because of all of the licensing costs associated. So it illustrates what the licensing fees can do to the hobby industry.

It doesn't obviate the fact that the issue is whether or not UP has defended it's trademarks and is therefore entitled at this late stage to suddenly demand licensing and royalties for the use of trademarks that have been undefended for decades prior.

[Anonymous]

Email just recieved from Kadee regarding UP Licensing.
-------------------------------------------------------------------------------

The following is my comments posted to the Trains.com forum about the
Kadee
UP article.

"KADEE IS NOT SUING THE UP!"

First, I'd like to thank "BigJim" for posting this information about
the
article in "Model Railroad News". Also, thanks to those whom have
posted
comments and a special thanks to those that have e-mailed their
support.
However, there has been quite a bit of assuming and misinterpretation
of the
title of the article indicating that few have really read the article
before
commenting.
"We are not going after the UP but we are not going to succumb to their
licensing agreement until many unanswered issues are settled".
Those of you that are just waiting poised at your key boards ready to
jump
in, please wait until you actually read the article.
We do not contend UPs or CSXs right to protect their "own" Trademarked
logos
etc. That has never been the issue!! But the real issues are the Fallen
Flags and quite a number of items that have not been made public.
There are many legal issues that can not be discussed on a public forum
or
anywhere else. So without "knowing the facts" please do not waist too
much
time guessing or speculating, thank you.

Sam Clarke
Kadee Quality Products

[gvdobler]

bcammack

Ok oranges for oranges.

AMT makes a model of the Edsel as a car kit and oh my, they pay a licsense fee.
It's that "acurate little replica" with a logo that does it, sorry.

You can have the last word.

Jon - Las Vegas

[davekelly]

bcammack

Very well said!

[vsmith]

I'm just going to repaint what few UP cars I have to Onion Pacific.

[Anonymous]

Not sure of the definitiions and terms being thrown around in these threads. When you say a railroad "didn't protect their trademarks" do you simply mean they didn't require licensing in the past or do you have deeper knowledge of a pattern of ignoring actual violations of their trademark rights? Can't a company can allow use of their trademark without formal approval through licensing without losing their rights to their property?

I think much of what is being pass here as statments of fact is simply opinion. At least Virginian is up front when he says he holds his opinion " because I don't like the whole concept; nothing to do with right and wrong or law. "

Wayne

[bcammack]

I don't really care if UP or any other road legitimately wants to maintain control of their trademarks and logos as long as they don't presume to suddenly try and make it a revenue source after decades of allowing them to be used by the model railroad manufacturing community gratis. The legal point to be decided is whether or not they have maintained the right to exercise control in this matter after years of neglect. If you neglect to defend your trademarks in the way the railroads have neglected them in regard to model railroads then you have likely lost the right to start defending them and demanding compensation for their use.

Whether anybody thinks that's fair or not is irrelevant. It is for a court of law to decide. The problem I see with UP is simply that they shoot themselves in the foot, PR-wise with this sort of stuff. There's no way that whatever they might pull in from this play would pay for the staff and attorneys cost them to promote, defend, and administrate the program. All it does is p*** off people that they should want liking them.

Saying "Try to make a car called the Edsel and see how far you get." is a specious argument. Nobody's making a railroad and calling it "Union Pacific". They are making very accurate little replicas of Union Pacific equipment, not trying to compete in the same business. Apples and oranges with regard to trademark law.

To claim that if Coca Cola makes people pay a license fee to use their trademarks on products, therefore it is alright for Union Pacific to do so is also specious because Coca-Cola has rigorously defended and controlled their trademark from day one. Union Pacific has not, at least with regard to model railroading.

I know we all have opinions, but I don't think that anyone here, myself included, really has sufficient knowledge and depth of experience with trademark law to categorically state something that is truely informed.

I don't think that anyone would disagree that the whole thing hasn't put UP in the best light with the general public.

[Don Gibson]

I have always believed that this move by UP was thought up by someone trying to get recognition by adding to the bottom line, such as a VP bucking for promotion.

I am unaware of threat's or challenges to their logo or name, compared to the free advertising bestowed on them by our infant industries.

I'm hoping that whrn UP sees what little income is generated VS the cost of policing, they'll come to their senses. Oviously they're not creating good will; or Perhaps I'm being naive.

[Anonymous]

Dave raises an interesting point. If CNW, SP, WP, MP, Alton & Southern, etc. didn't protect their trademarks before UP's acquisition of them, just what "rights" did UP get from those roads?

Generally a buyer doesn't get any greater rights in a asset than his seller had at the time of sale.

So if the North Western didn't maintain a protectable interest in, say, the "400" logo or the "Omaha Road" name, why should UP suddenly get such an interest?

[Virginian]

And since the previous owners allowed the Trademark to be used openly, the previous owners opened it to fair use, and UP cannot undo what was done.
DuPont once liked having "nylon" become a generic term for plastic fibers; free advertising. But when competitors started producing products and calling it nylon they protested. The court ruled they did not exercise due diligence in protecting their trademark for years, and hence lost control of said use.
I am hoping UP loses just because I don't like the whole concept; nothing to do with right and wrong or law. They better start thinking of all the potential jurors in future lawsuits they may be alienating.
I have heard CSX is sniffing around for a few dollars as well. Anybody hear what Norfolk Southern's position is?

[Anonymous]

My theory is that is was the railroading community that drove the up to liscense its logos.

Not because they don't like ers, but because it was the railfan and er community who was the worst at abusing the UP logos.

Remember all the giggles you guys got over those doctored photos with the fake UP slogans on the sides of the units and how people were making up decal sets with fake slogans slamming the up, making fun of them back in '97?

I bet the up wasn't laughing. Within a year or so after all those things started coming out, the up started its liscense program.

10:1 the railroad community shot themselves in the foot and it was them circulating all those doctored up logos that made up start contolling the logos.

"We have met the enemy and he is us." Pogo.

Smith

[dehusman]

As far as the UP not protecting its trademarks for decades, just remember that it acquired the majority of those trademarks wihin the last 10 years. It couldn't protect the CNW or SP marks 30 years ago because it didn't own them.

Dave H.

[gvdobler]

If you decided to start prodicing a new car and call it an "Edsel", I'm sure someone from Ford would have a chat with you through their lawyers.

Why is that so hard to understand? Why do you think someone should just let us use their name because we're a bunch of nice guys. The probably don't care if we use the trademarks, but they do care if someone uses it to sell a product.

Sometimes it takes a long time to get that protection. Prasilla Presley took a number of years to secure "Elvis" royalties. People were making a lot of money without paying the estate. Now the estate makes more than when he was alive.

You can bad mouth UP all you want, but that doesn't change what belongs to them.

Jon - Las Vegas

[StillGrande]

QUOTE: Originally posted by SROC99

"KADEE IS NOT SUING THE UP!"

So without "knowing the facts" please do not waist too much time guessing or speculating, thank you.

Then what would everybody do? That is about all that happens here now.

[Anonymous]

QUOTE: Originally posted by bcammack

This has nothing to do with copyrights. It has everything to do with trademarks. Copyright law doesn't apply here. One issue with trademark law is that of defense of trademark. UP cannot go along for decades ignoring the use of fallen flags under their corporate umbrella and then suddenly claim infringement and demand restitution for their use.

I'm not aware of any cases where any railroad is seeking restitution for use of their trademarks, only compensation for future use or have I missed this issue entirely?

A company, organization or individual isn't required to maintain their past practices forever. Museums that have offered free admission for decades are entitled to begin charging if they so choose. You may let your neighbor use an unused garage on your property for decades yet one day decide he should start paying a few dollars in rent. Is he entitled to free use in perpetuity?

We don't know that UP has been "ignoring the use of fallen flags under their corporate umbrella" for decades; we only know they haven't been charging for their use. As I said above, the free ride is simply over. Some are crying the death of the model industry as a result, though I haven't seen a shred of evidence to support this.

In my opinion, the sky is not falling.

Wayne

[davekelly]

I would think that "fair use" would be Kadee's best bet. There has to be a line drawn somewhere that can be a guide. I'm sure most issues along these lines have been settled. While that is good for the parties involved, it leaves no guidance for other parties that are or may be embroiled later. I think there is a difference between, for instance, a Dale Earnhardt shirt and a PRR SD45 model. One buys the shirt specifically because there is a picture of Earnhardt on it. Can it be said that someone buys a model SD45 first for the model and second for the PRR logo? While I agree that there is a problem should I start a railroad and name it "Southern Pacific" is it the same when it involves the logo on a model? If Kadee and UP both go all the way - there will perhaps be precedent set that can be a guide to others. While the outcome may not be what we want - at least there will be somesort of guidance on paper to refer to.

[SROC99]

"KADEE IS NOT SUING THE UP!"

First, I'd like to thank "BigJim" for posting this information about the article in "Model Railroad News". Also, thanks to those whom have posted comments and a special thanks to those that have e-mailed their support.
However, there has been quite a bit of assuming and misinterpretation of the title of the article indicating that few have really read the article before commenting.
"We are not going after the UP but we are not going to succumb to their licensing agreement until many unanswered issues are settled".
Those of you that are just waiting poised at your key boards ready to jump in, please wait until you actually read the article.
We do not contend UPs or CSXs right to protect thier "own" Trademarked logos etc. That has never been the issue!! But the real issues are the Fallen Flags and quite a number of items that have not been made public.
There are many legal issues that can not be discussed on a public forum or anywhere else. So without "knowing the facts" please do not waist too much time guessing or speculating, thank you.

Sam Clarke
Kadee Quality Products

[bcammack]

This has nothing to do with copyrights. It has everything to do with trademarks. Copyright law doesn't apply here. One issue with trademark law is that of defense of trademark. UP cannot go along for decades ignoring the use of fallen flags under their corporate umbrella and then suddenly claim infringement and demand restitution for their use. There are also issues with some roads where they gave rights via AAR for the use of trademarks in perpetuity on model railroads.

[MidlandPacific]

The fallen flags business is particularly touchy, but I tend to think the law is on UP's side: when corporations combine, their intellectual property (including logos) belongs to the successor company. There's a good reason for this: imagine the confusion and lost business if someone decided to exploit name recognition by using an abandoned logo. It's annoying that someone cannot now make a Denver and Salt Lake decal without paying UP royalties, but imagine the confusion and lost business if someone had decided to appropriate the corporate identity for some other use when D&SL merged with the D&RGW.

There IS an element of copyright law, known as "fair use", which Kadee may be able to claim. The law does make allowances for some types of reprinting: reviewers, for example, may reprint prose excerpts in magazine articles. A real lawyer could probably offer us some insight into this.

[BRAKIE]

QUOTE: Originally posted by johnblair

UP just doesn't care what people think about their company, PERIOD.

No railroad thinks of what the public thinks of them..

[Anonymous]

UP just doesn't care what people think about their company, PERIOD.

[dehusman]

Since nobody has mentioned it and the Model Railroad News doesn't say anything about it on their website (neither does Trains.com as far as I have seen), does anybody know what the basis of the lawsuit is? What is Kadee suing the UP about?

Dave H.

[Jetrock]

QUOTE: What people forget is that the railroad isn't just boxcars and engines. The UP is and has been communications companies, logistics companies, software developers, truck lines, air frieght, airlines, land developers, ski resorts, cement plants, coal mines, and telephone companies just to name a few.

Don't forget railroad-construction finance companies! Maybe we should re-label all our UP equipment "Credit Mobilier RR" and see if they try to sue for that one...

Just because it's "THE LAW" doesn't mean it's RIGHT.

[Anonymous]

Amen Wayne.