UP is sueing Lionel & Athearn

[JFermani]

Union Pacific is sueing Lionel and Athearn for trademark violations. CTT what can you find out about this? Can UP really start to enforce trademarks which have been used by Lionel for the past 100 years?

Here is the link to the UP statement:

http://www.uprr.com/newsinfo/modelrail.shtml

Joe

[spankybird]

UP makes a good point, Lionel makes a money off the use of their Name – Logo – trademark.

Joe, you should post this on the UP poll also


tom

[JFermani]

Tom,

My main bug with UP is that Lionel has been using their trademark for years and UP never charged them. How can a company, legally, decide that it now wants to start charging for the use of the logos? I just don't understand how this is possible.

Joe

[spankybird]

I agree Joe,
See my posting on the UP poll. I see that UP HAS the right to charge, but do they have to. Santa Fe paid Lionel to produce trains with thier color and logo in the fiftys.

Maybe this is why so may of the Lionel trains were Lionel Lines and not a specific RR name.

tom

[Anonymous]

As I understand the law (and remember, I'm no lawyer), UP is perfectly within their rights to start charging for the use of their current logo & trademarks on model & toy trains. Whether Lionel, Athearn, or you or I want to pay that fee doesn't matter; it's their right & we have to pay it.

Where UP gets in trouble is the demand for payment on logos & trademarks for railroads that UP absorbed & no longer exist for which UP has not charged fees in the past. Since these entities no longer exist, and since UP did nothing to preserve the trademarks, they cannot charge royalties for the use of those logos.

We'll see how everything works out when it goes to court.

Tony

[Anonymous]

Of course UP is within their rights. And don't be surprised if GM or whomever makes these huge train engines sues Lionel for making models of their machines without permission. I mean look at FORD, CHEVY and the rest. When you buy a NASCAR toy they have copyrights for all the cars listed on the back of the packaging.

[Anonymous]

[:-^]
I'm not sure any of you guys have read the post about the "Biltmore comodore". The guy asked of it's value. He said it had lionel written on it, and someone mentioned it sounded like a knock off from Japan. Lionel may just have to change the U.P. to something like "Union specific" Or "Unit Paific" I wouldn't mind a little tweak. Or keep the paint scheme and sell stickers and I.D.'s sperate. Can't charge people for customizing their trains right?
The little extra work seems like fun anyway.

Angelo

[FJ and G]

I'm having trouble keeping up with all of these stories. Didn't MTH sue Lionel a while back as well? Whatever became of that?

My guess is that all of these suits will be settled out of court.

I'm kinda surprised that no other railroads have yet followed UP's lead in charging fees.

Anyway, I don't see Lionel winning this case except if the roads are predecessor roads. UP gave Lionel fair warning that they would collect fees. What were they thinking? While I don't agree w/UP charging these fees, you cannot simply violate the law.

Dave V

[Big_Boy_4005]

Way to go Lionel and Athearn!!!

There is a long established precident that model train manufacturers use logos of real railroads on their models. It is the MODEL that has value NOT THE LOGO. The logos are put on the models for the convenience of the consumer. I would rather buy BLANK trains and decorate them myself, than to cave in to corporate GREED. Beside, with modern technology I can capture any logo I want and use it on MY railroad.

The railroad may own the right to it's logo, but after all of this time may have lost the right to enforce it with the model manufacturers. This may very well be a valid argument in the court's eyes!!! Now I am anxious to hear the outcome of the case. The court may rule that the railroad's rights only only extend to logos currently in use, and that the fallen flags are public domain. That would totally screw UP's plan for revenue. With luck the model railroad industry may find itself exempt from enforcement given the amount of time that has been allowed to pass. If they lose, based on this argument, UP would have to give back all of the fees collected.

You know? I don't see the railroad that needs the revenue the most lining up at the trough. AMTRAK!!!

[FJ and G]

Elliot,

I hope you are right. If Lionel wins, we all win. If they go down in flames, at least they tried.

dav

[Big_Boy_4005]

There is another angle to this that that I haven't seen anyone mention. It has to do with the advertising VALUE of any railroad logo. Railroads have no one to advertise to!!!! This ain't like Coke and Pepsi, consumers don't just go out and say "I'd like to use the Union Pacific to ship my freight today". Railroads aren't consumer products, they are more like public utilities, whose logos are of equally little value in the marketplace.

Perhaps model railroading is growing so fast, that the railroads have "lost control". By the way guys, don't kid yourselves, the railroads aren't charging the model manufacturers, because it just gets passed on. As a matter of fact, it gets magnified and inflated, before it reaches your layout. At every different level of distribution, it gets marked up from the original fee. Even the hobby store makes a little more. Think about it, a $1 license fee to the manufacturer, could become a $2 or more fee to you. It can add up fast!!!

[Big_Boy_4005]

Thanks Dave, I expect that Lionel and Athearn's lawyers have thought of this arguement, and will persade the court to grandfather the entire model industry in, maintaining the status quo.

This whole thing may not really be a trademark violation issue anyway. The model manufacturers are not trying to harm or defame or really even benefit from the use of the logos. The only people who may be in real danger under this theory are the DECAL manufacturers. They REALLY do benefit from sales of railroad logos. In the end, we may have to learn to paint and apply our own decals. That actually sounds like fun.[swg]

[FJ and G]

Exactly! That's what I really cannot understand about all of this hoopla. Having your logo spread across the country would be every PR man (and woman's) dream!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

APPARENTLY, the bean counters at UP are in charge of the PR Department.

HMMMMMMM. Does UP even have a PR department??????

They certainly have bean counters and lawyers!!!!!!!!!

Dave

[Big_Boy_4005]

Dave, UP actually once had a PR department. At some point, probably in the 60's or 70's, they may have been moved out, leaving their vacant office space open for more bean counters.[swg] I hope they don't want to start charging me for the use of my screen name.

[ben10ben]

Amazing how times change.

Way back in 1948, Lionel wanted to make a model of a current-production diesel freight locomotive.

General Motors was more than happy to supply Lionel with the blue prints of their current production carbody diesels, the Phase IV F-3.

When Lionel was ready to put this locomotive into production, Santa Fe and New York Central both footed a good part of the bill for the tooling of this engine, and, in return, the first 4 years this engine was produced, it bore the colors, names, and heralds of these two railroads.

All through the 1940s, '50s, and '60s, EMD, ALCO, and FM all kept Lionel well supplied in current blue prints for no charge. I guess that we won't ever see a return to these days.

[Dr. John]

I think part of the problem is that railroad people no longer run the railroads. By that, I mean that the visionary people who saw the railroads as a means of linking this great nation with passenger and freight service and who took the early risks are long gone. Today's railroads are big corporations. Nothing more. And while I have no problems with corporations or free enterprise, I think that the real vision and soul of the "powers that be" that run the railroads is gone.

Both of my grandfathers were proud to be "railroad men" as were two of my uncles. I'm sure there are some who still have it in their blood that work for railroads, but not like it once was.

[Big_Boy_4005]

QUOTE: Originally posted by Dr. John

I think part of the problem is that railroad people no longer run the railroads. By that, I mean that the visionary people who saw the railroads as a means of linking this great nation with passenger and freight service and who took the early risks are long gone. Today's railroads are big corporations. Nothing more. And while I have no problems with corporations or free enterprise, I think that the real vision and soul of the "powers that be" that run the railroads is gone.

Both of my grandfathers were proud to be "railroad men" as were two of my uncles. I'm sure there are some who still have it in their blood that work for railroads, but not like it once was.

That is a very good explanation of how we got to where we are today with this mess. I think that it's safe to add, that there is nothing exciting about trying to maintain a business. Without new LANDS to conquer, WE have become the railroad's new frontier.

[Anonymous]

Can you say GGRREEEEDD,GREED,GREED,GREED,GREED........ETCETCETCETCETCETC.BNSFfan.

[Anonymous]

Here’s my take on this mess. Good for Union Pacific for defending its trademarks. Lionel certainly has entered into lucrative licensing arrangements with both Disney and Warner Bros.

Both of these companies have a long history of actively protecting their trademarks and product lines as have Lionel.

If anything, all the publicity that will be generated by this will greatly benefit Lionel.

And for you guys who live in a dream world...wake up. Of course it's greed. After all, this is the Land of the Dollar Bill
Bill
www.modeltrainjournal.com

[macdannyk1]

UP sucks! Hey, sounds like a good idea for a grafitti car! :)
[}:)]

[Big_Boy_4005]

QUOTE: Originally posted by BillFromWayne

Here’s my take on this mess. Good for Union Pacific for defending it’s trademarks. Lionel certainly has entered into lucrative licensing arrangements with both Disney and Warner Bros.

Both of these companies have a long history of actively protecting their trademarks and product lines as have Lionel.

If anything, all the publicity that will be generated by this will greatly benefit Lionel.

And for you guys who live in a dream world...wake up. Of course it's greed. After all, this is the Land of the Dollar Bill
Bill
www.modeltrainjournal.com

Interesting observation Bill, however I have never seen an Athearn car with any of that stuff on it. Disney and Warner Brothers have nothing to do with trains. In this case their deals are with Lionel, who just happens to make trains. They have licensing deals with hundreds of other toy manufacturers, and have been conducting business that way since DAY ONE. Those images are their produdt.

UP just seems to have woken up one morning with a "wild hair" and decided that just because they own it, they can sell it. The problem is that they are only hurting their fans, and the revenue is meaningless to them. The railroads are not in the entertainment business. Their marketing departments are dedicated to selling their freight hauling services, not their corporate image.

This whole situation reminds me of two stories, one which happened right here on the forums, and the other which happened here in the Twin Cities earlier this year.

We all remember the now infamous $18, and how easy it is to drive off loyal fans and customers. We aren't even UP's customers, for that matter neither are the model manufacturers. Strike one for UP. A bad business decision, even if they have the right and feel the need.

The other story involves the Minnesota Twins baseball team. It seems that in their zeal to keep up with the Yankees, they THOUHGT they could create their own sports channel for cable. The problem was that BOTH Time Warner and Comcast balked at the contract!!!! They stood up for their customers and said NO to the Twins, and the extra cost. The Twins whined like babies, CALL YOUR CABLE COMPANY!!!! The Twins ended up caving in. They knew they were losing their fans, because the entire metro area couldn't watch the games. A little more than a month into the season they were back on Fox Sports Net where they have been for the last few years. I have been a season ticket holder for 16 years, and I'm still mad, and won't watch even for free.

As far as I'm concerned, this CLEVER STUNT by UP (and any other railroads that decide to do this) is nothing more than a bad business decision. We as buyers of model trains should support Lionel and Athearn, because ultimately they are defending us from the bullying of the railroads, and higher prices.

To UP I say, all the way up with a red hot poker!!! Maybe it will get rid of that wild hair.[swg]

[Anonymous]

Dave:

I've read on OGR that CSX is also charging royalties for the use of their logo, but the charges are more reasonable & not intended to turn the logo into a revenue generator.

As far as I know, the MTH vs. Lionel suit hasn't come to court yet. These things take a very long time before they get to court. The process goes something like this:

1. Plaintiff files suit

2. Court clerk looks for a date to put the suit on the court calendar.

3. The Court calendar's filled up through the end of the year, so it goes on the end of a waiting list till next year.

4. The day for planning the calendar for next year comes & the cases come off the waiting list on a FIFO (First in, first out) basis. Depending on how long the waiting list is, the case make not make the tentative calendar for next year.

5. Even if the case makes the tentative calendar, there's no gaurantee it will be tried in that year, depending on when it's scheduled & how long the cases before it take to try.

When I was 15, I was struck by a car while delivering newspapers. My case didn't make it onto the court calendar until I was almost 21, just before I graduated from college. And then we settled out of court. So I wouldn't hold my breath until either of these suits make it to a preliminary hearing.

Tony

[Big_Boy_4005]

I wouldn't be so sure on this one Tony. It could go all the way with both sides thinking that they are right. I think the main defense will be the amount of time allowed to pass before action was taken. UP will easily prove that it has the rights to the trademark, but they may also have to prove that they were harmed by the illegal use. This case isn't really about money, except for the legal fees, and those may be relatively small. The money comes after the fact if UP wins.

I would actually expect this to move quickly because it seems straight forward and almost academic. Everybody wants to test the laws and court. Both sides have valid points and issues. UP is claiming some kind of protection under a Nebraska state law, as well as Federal trademark.

Lionel and Athearn have clearly acted under advice of council, to ignore UP's attempts to license, so they must be ready for a fight. They wouldn't do that if they didn't think they had some kind of chance.

My most recent experience with the law was my divorce. It was done without ever setting foot in the courthouse. Some case law was cited by each side, to scare the other side into settling, and a deal was reached. Nobody wanted to take their chances with the judge. The judge signed, done.

Both sides know what they want. Neither side feels that they have anything to lose, and everything to gain if they win. In my mind, they want a decision, and are ready to play their cards and take their chances.

Winner takes all high stakes poker, Lionel and Athearn are calling UP. Who has the better hand???[swg]

[FJ and G]

Recorded conversations heard on the evening news yesterday from Enron traders:

"We sure F****** ole granny, didn't we"

"Can you shut down the steam plant."
"Yep, can put it off line right away."


Conversations not yet public from UP execs:

"Lets get money out of those scumbag model railroaders"
"OK, we'll slap them with fees."

dav

[Anonymous]

Elliot:

My point is this isn't a criminal case, which has to be tried in a timely manner due to the Constitution's provisions for a speedy & fair trail. How soon it gets to court is dependent upon how busy the court's calendar is.

No one is going to argue that this case is ay more important than any of the other cases on the docket before it, so it's not going to come to trial before any other case already on the docket. It could be a couple of years before the case comes anywhere near a judge.

How would you like to be the defendant or plaintiff in a case that was to be tried in the same court & find out that your case was pushed back so another case could be tried first? And how many people outside of the hobby are going to be interested in seeing this case come to trial and a resolution? For most people, this is probably just something they'd hear about at Christmas & forget about, just like that piece that was on CBS news about UP this past year.

Tony

[Anonymous]

UP's slogen should say......
WE WILL DELEVER.............GREED.
[#wstupid]/BNSFfan.

[Anonymous]

I agree totally with the idea that the railroads should be happy that their names are pasted all over trains and magazines. Thats free advertizing and marketing. For the money the'll be getting from the royalties, they the'll lose because people won't see their logos as much; now they have to pay for marketing. I'm sure swiss army didn't charge macgyver for using their knife on his show. Like Big Boy said its not like they are coke or pepsi. If U.P. charges royalties, Lionel may lose out because of loss of revenue, respectively U.P. won't see that much royalty for too long. I know If there is a royalty they won't get any from me. I feel like its more a matter of principle, than who is right or wrong.
on a lighter note, the hobby might be better for the collectors who have a lot of older trains. Their trains may be worth more as they may be more saught after.

Angelo

[Anonymous]

geepers. I think those furious at U.P. need to take a step back. Sure I hope lionel wins b/c I think the whole thing is a little odd and I don't want to have to pay royalties, but honestly, every time I guy a car from lionel those 'big fat cats' at lionel are lacing their pockets with their 'greedy spoils'. The are probably using the money they make from me to ship jobs off shore so they can afford a better yacht....
ok ok excuse my extreme joking on my part but can't a lot of the arguements made against U.P. also go against lionel? Lionel isn't exactly a mom and pop business these days. It definitely isn't U.P. by any means but isn't lionel partially controlled by an investment firm or something like that? $5 says that both lionel and U.P. at the end of the day are primarily concerned with the $$$ they generate.

Now I have no idea who is right or wrong in this case, and I don't like U.P. suddenly charging for this stuff, but I can't exactly find a higher moral ground on either side!

[Big_Boy_4005]

All valid points Tony. I just think that once they get a date set, there won't be a lot of foot dragging by either side. Judges don't like cases to drag on, and will set time limits for different phases of the action. There shouldn't be witnesses or much of an actual trial. I think this case is mainly about interpretation of the law, and not so much about the specifics of the situation.

Keep in mind that this is a different court from the one with which you had your experience. Nebraska is not as big or busy a venue. It struck me as odd, until I realized that UP is the "home team". Also,this is federal, not local.

In this case UP could be seeking an injunction to force the manufacturers to stop using their logo until there is a ruling. That would make a difference on the calander.

I see it happening like this: UP says this is our trademark, and we have rights, and here's why. Lionel and Athearn come back with the horse has been out of the barn for years defense. Where has UP been???

Both sides do research to find similar cases and rulings to support their sides. However there is a chance that this case has facts different enough from any previous case to warrant extra consideration. Both sides hand the judge their mountains of paper, and wait while he reads and thinks about it , but not too long.

This isn't like Microsoft or Martha, this should be pretty cut and dried.

[Anonymous]

Hi guys,

To to straighten up a few facts: UP filed a complaint in U.S. District Court in Nebraska (the railroad's offices are in Omaha) last Thursday stating that Lionel and Athearn were not abiding by UP's licensing requirements. UP is seeking damages from Lionel and Athearn. It is a civil case.

The legality of UP asking for licensing fees and agreements -- after decades of allowing others to use its logos, etc. seemingly without restrictions -- has not been challenged in court, so we can all speculate about that until the cows come home. Clearly UP's attorneys believe the licensing program would hold up in court, or the railroad wouldn't be doing what it is doing. There are likely some past trademark cases that set a precedent.

Trademark laws do not distinguish between consumer products like Coke and Pepsi and railroads.

Often civil complaints are settled out of court but it takes a lawsuit to get the parties moving toward a resolution.

Lionel has no official comment on the licensing complaint, but told me yesterday that they will be preparing a press release in the coming days.

Amtrak has a licensing program that extends to model railroading. CSX has a program, too, and of course Lionel actively licenses its own name.

Neil Besougloff
editor, CTT