Like it or not, you are paying for Union Pacific

[FJ and G]

if you purchase toy trains. Some model train companies in other scales are raising prices on UP trains exclusively (as opposed to other roads) but not toy train companies. T

Instead, toy train companies are spreading out the costs across the board, apparently, leaving fans no way to show their displeasure for UP and saddling everyone with UP fees.

Not fair, IMO.

[wrmcclellan]

Dave,

UP only charges around 2-3% for licensing based on revenue. If a retailer or manufacturer is jacking up prices more than 5% on UP branded products to cover this - then there is a problem with the manufacturer or retailer. Price rises across the board attributed to only UP is simply an immature attempt by those entities to shift the blame to another vevnue when in fact there may be a need to raise prices due to many other factors. The manufacturer or retailer thinks that focusing you on UP (or whoever else they blame) will make you still buy products because it is not "their" fault. Baloney.

Having been involved in IP licensing at a previous employer - the problem for corporations in recent years is if you do not "aggressively" (legal view) protect your IP and trademarks, then you may legally loose all your rights to them (and not only to legitimate enterprises). Not a pleasant thought for a corporation.

The incredible rise in illegal and unscrupulous use of others intellectual property in recent years is the underlying cause of this problem. A company and the courts are not allowed to punish only the "bad" guys - so all must be treated equally - unfortunately for all of us.

Regards,
Roy

[Jumijo]

The quickest way to recoup the licensing fee is to spread out the cost of that fee across the board. If only UP items are marked up, and people stop buying those items, the company still has to pay the fee to produce the item, but they also have a bunch of product that isn't selling, making their profit margin smaller. When profits shrink prices go up. By spreading out the cost, it ensures that the fee costs are covered, whether or not the UP products sell. Either way, you're gonna pay whether you buy UP products or not, either as a licensing fee or through higher prices to shore up sinking profits. It's a snake eating it's own tail. The only way to avoid higher costs due to licensing in your example is to stop producing the UP products.

Jim

[FJ and G]

Jim,

Then how are other model train companies coping with the costs?

Roy,

Just curious why all railroads then don't enforce their trademarks.

[Anonymous]

Even though the cost is spread aross the board, it seems to me if the model railroading community stops buying products with the Union Pacific road name the point will be made. Why should we have to pay extra to advertise for Union Pacific? Wasn't it the other way around in the good old days when the railroads paid to have their road name on certain toy trains?

[Jumijo]

It used to be that some railroads paid to have a toy train with it's logo, etc on it as a form of advertising. But that was a long time ago when copyright infringement wasn't the huge issue it is today. It was also a time, before air travel, the growth of the trucking industry, and widescale use of automobiles to commute, when the railroads were a very, very big part of people's lives. They didn't need the licensing money as they do today. Roadnames on toy trains actually helped bolster people's allegences to a particular railroad.

If a model train maker signs a licensing agreement, they pay the fee whether or not the consumer buys the licensed items. It's up to the model train maker to recoup those costs in what ever manner they deem appropriate. Many times, a licensing agreement only covers a specific and set number of items produced, let's say 1000 locomotives. If the train maker knows that they can absolutely sell those 1000 items, then they factor it directly into the cost of those locos. But if the agreement is broader, some sort of blanket agreement, and applies to rolling stock of all kinds, locos, etc, the fee will be spread out over the train maker's entire line to ammortize costs and keep like items, box cars for example, all the same price regardless of roadname. If you saw 2 Lionel box cars of equal quality for sale, but one was more expensive than the other solely because of the roadname, whould you buy it? I wouldn't.

There are many ways to pass along licensing fees. But one thing is for certain, one way or the other, it is passed on to the consumer.

Jim

[Anonymous]

This is an Outrage,

Union Pacific should not have put that licsincing fee on toy train products in the first place. Well, I only plan to purchase a few Union Pacific Items, such as a Lionel Huson, and Postwar Lionel Union Pacific FA-2 A-A Passenger Sets.

I hope Union Pacific will crash and burn. It would serve them right for all thsi tyranny.

Bert and Mary Poppins aka Nick

[Anonymous]

I dont know what to say, I mean all large conpanys have their evils, but compare the UP
to wal-mart, we couldnt get along easily without either, but on the other hand wal-mart
has sweat shops & UP has this. I wonder what Richard Kugn did on the BNSF
prouducts ?

[Jumijo]

Licensing and enforcement of brands is not an evil act. It is done to protect an identity and to make a legitimate profit. If you had a company and I made a consumable good with your logo on it, how would you feel? You'd want to control your logo's use and get paid for it's use.

Some companies are taking it to the levels of absudity, like airplane manufacturers that want to be paid licensing fees from model companies for kits produced 40 - 50 years ago. Companies are profit driven, but that's shameless greed in my opinion.

Jim

[FJ and G]

Jim,

Main argument isn't with the "evilness," rather with the way that the toy train companies recoup the costs.

[underworld]

That's why I like the Chinese toy train manufacturers....usually small battery powered or clockwork ones. I KNOW they aren't paying the fees.....as their prices have not gone up.

Stick it to the man! [(-D] [swg] [oX)] [:-,] [}:)] [soapbox] [:D]

underworld

[:D][:D][:D][:D][:D]

[Anonymous]

This has been going on for years. If any of you buy diecast farm toys or trucks you have been paying for a license fee for years. John Deere will not let a product be built with out their approval.
Get used to it, it is a way of life.
Dave.

[Jumijo]

QUOTE: Originally posted by FJ and G

Jim,

Main argument isn't with the "evilness," rather with the way that the toy train companies recoup the costs.

I know. But likening this to sweat shops, hopes of UP's demise because they protect their identity ,etc in the thread prompted me to address the "evilness" of that nasty, mean, old Union Pacific. See what I'm saying?

Jim

[wrmcclellan]

Dave,

Not all companies decide to enforce their IP and trademarks the same way. Some are at genuine risk for lack of effort. Some are not under attack for their IP and trademarks.

Jaabat makes a good point - what if you started a winning business and a guy across the street was allowed to copy it and take your business or worse - represent himself as you - do a bad job, take peoples money without delivering product - who suffers - you and your customers.

For those leveling blame only at UP - that is misguided. Again - the fees are small, even smaller when spread over an entire product line. Prices are starting to go up regardless of UP licensing.

Regards,
Roy

[palallin]

Blame a consuming society that doesn't take intellectual property rights seriously and a manufacturing society (China) that revels in violating them, along with a lawyer-driven economy. There was a time when RRs paid Lionel to use their heralds.

[Anonymous]

Well this is a welcom discussion, am new to this Lionel and collecting and odley I started with
a 8002 UP and tender and have a few UP cars--so far at least to me on e-bay I don't see any price difference at all between Up and any of others. Not to say they won't go up as most mfg.'s do anyway regardless of "rights". I reckon if its too much people won't buy them--I know I wouldn't! I know one thing for sure--I am not about to buy anyones new car, suv, or anything they make and pay $20k and more--they can keep it! My limit is $12K-
The laws on "rights" and "infringements" to me have gone too far--You can't download music without paying a fee but at same time I can record off radio or tv and doesn't cost nothing ---
At the same time all the advertisers for NASCAR sponser vehicles for rights for a space on a particular auto just to advertise- to me a total reverse!
I think these mfg.'s should be proud to have their name on toy trains and other products w/out
trying to gouge people as most do, I really can't think of anything much today that is REALLY worth the price they ask or it is a cheap product to start with. No offense to UP or any other mfg., Just my opinion![:)][:)][:)]

[Anonymous]

My feeling is that UP fans should bear the burdon of any UP licensing fees in the form of a premium charged for UP or UP-related products. Identical products decorated for other roads should carry a lower price. The overall hobby--inclujding those of us who do not model UP--should not be saddled with costs imposed by whimpy manufacturers who lack the guts to stand up to UP.

[Bob Keller]

I'm not sure that any business decision has ever been made because someone saw a Union Pacific freight car on a model railroad layout. I doubt if a traffic manager has ever said "Well, we're only served by BNSF, but let's route via UP because I like that centerflow hopper on my son's layout," or some titain of industry has located a new factory on the UP because they had a UP F3 set as a kid.

Conversely, if a traffic manager didn't ship via the lowest rate/fastest route because he was beefed at UP's attitude toward model railroading, he'd probably lose his job, and rightly so.

I think this "advertising" angle is a myth. Railroads don't view their own rolling stock as advertising, so why should they look at 1:48, 1:64, or 1:87 cars as ads? If they thought their own 1:1 scale cars were rolling billboards, most freight cars wouldn't look so terrible.

I think UPs position is silly, but to say that they'll be hurt by guys NOT buying UP locomotives and freight cars due to the lost "free advertising," isn't based on the real world.

Personally, I'm glad I'm a New York Central fan.

[palallin]

I'd say I'm glad I'm a MoPac fan, but the UP has that roadname tied up, too. In fact, according to the letter of the law, they also have my favorite-son RR--the Mississippi River and Bonne Terre--tied up, too. Of course, no manufacturer that I've ever been able to find even makes decals for the MR & BT, much less RTR equipment.

Yet another reason to model the Undec . . . [{:D] (Lest you think I'm kidding, MR did a feature article on the Undec 20 years ago or so, just like CTT did one on the Lionel Lines.)

[csxt30]

I'll tell ya what I don't want to see, is the rest of the RR's following UP. In my years on the RR, it seems whatever one RR does, the rest of them follow. Thanks, John

[Anonymous]

QUOTE: Originally posted by Ogaugeoverlord

I'm not sure that any business decision has ever been made because someone saw a Union Pacific freight car on a model railroad layout. I doubt if a traffic manager has ever said "Well, we're only served by BNSF, but let's route via UP because I like that centerflow hopper on my son's layout," or some titain of industry has located a new factory on the UP because they had a UP F3 set as a kid.

Conversely, if a traffic manager didn't ship via the lowest rate/fastest route because he was beefed at UP's attitude toward model railroading, he'd probably lose his job, and rightly so.

I think this "advertising" angle is a myth. Railroads don't view their own rolling stock as advertising, so why should they look at 1:48, 1:64, or 1:87 cars as ads? If they thought their own 1:1 scale cars were rolling billboards, most freight cars wouldn't look so terrible.

I think UPs position is silly, but to say that they'll be hurt by guys NOT buying UP locomotives and freight cars due to the lost "free advertising," isn't based on the real world.

Personally, I'm glad I'm a New York Central fan.

I agree. Having a UP car on your layout is not advertising.

The point of an ad is to reach a large audience & get them to buy whatever you're selling. No one ever said "Let me take a ride on a railroad" or shipped anything with a particular railroad just because it was on their layout or their friend's layout.

You model something because you like it, but it's not an advertisement.

And I'm sorry to say that I believe the UP is well within their rights to charge a royalty for the use of their logos & colors. Their licensing agreement may stink, but that's why people negotiate.

I mean, do you walk into a car dealership expecting to pay the MSRP?

Tony

[lionelsoni]

Railroads have not been allowed by the ICC to advertise on their cars since 1933, which is one reason why they don't view them as advertising. But, since they got out of the passenger business, they don't have much incentive to advertise to the general public, anyway. This is undoubtably why they don't see any advantage to themselves anymore in having their names on toy trains.

[Anonymous]

Hello All: Wemay not like it but the logo & trademark belongs to them, I have seen what can happen when you infringe on a trade mark, A children's day care had Disney character's on the sign, & guess what Mickey's lawyer showed up with a court order' take it down or you'll be paying large, it came down. On the other side the NHL TorontoMaple Leafs est 1931 never bothered to protect the Logo or trademark, This guy walked into the patent office , & registered the Name, Logo & trademark. That cost the Leaf's an undisclosed amt. of big $$$. As I said, we may not like it,but lets face it, the majority of train equipment is purchased by Adults(Big children according to my wife), Up wants a peice of what's theirs. I will end with one question, How many people have purchased a NFL, MLB,NHL, NBA or any other licensed product? Just remember about 20 -25% is going to those million dollar babies we watch. With respect & kind regard's to all Steve

[Buckeye Riveter]

I believe you are going to see more and more aggressive protection of company's trademarks, logos, designs, etc. because of fraudulent copying of legitimate products over seas. If a company is not protecting their trademarks, logos and other forms of property in the US, I would assume that this would not be a plus if you had to go to a world trade organization to protest unscrupulous use of your property in a foreign country.

If I were a stockholder in a company where some third world company was using my company’s logo to unscrupulously sell like wares, I would be furious if the officers of my company didn’t pursue the theft. Needless to say, many of our retirement funds are invested everyday in major companies and the managers of those funds better be watching that these companies are protecting our money by protecting their property, both real and intellectual.

NASCAR, NHL, MLB, NHL, and the NBA all protect their logos and trademarks. The posting about John Deere is an excellent example of a company controlling their trademarks and name on toys. John Deere doesn’t make the toy tractors, just like the Union Pacific doesn’t make the toy trains. Caterpillar seems to follow the same track as John Deere.

If Union Pacific can't enforce their trademark rights with a toy train company headquartered in their own country, they would be hard pressed to have that trademark protected from the Ho Che Men Rickshaw and Wooden Bucket Company in eastern (put name of your favorite third world country here.). And as the old saying goes, better late than never. [soapbox]

BTW, isn't there some guy from MicroSoft going around and registering logos and trademarks that the companies failed to register? Or is this an urban legend? I remember hearing about it, but I don't recall reading a newspaper or magazine with the information. [?]

[GregM]

This subject has been discussed a number of times already and it isn't easy to remember everything that has been written about it. That said, I distinctly remember reading that UP does market toy trains with their logos.

I haven't bought much with UP on it since this licensing issue came to light. I am sure I'm in the minority, but what I have read doesn't suggest to me that UP is doing this strictly for copyright protection. The percentages are 3% of gross (not net) sales if paid on only sales of UP branded merchandise or .5% of total gross sales. The licensing agreement specifies that the royalties are to be paid in advance if the 3% option is selected. Half a percent of a company's gross sales based upon an audited financial statement is excessive and intrusive, in the case of a private enterprise, to me.

I hoped the industry would join together and fight this, but as can be seen in the catalogs and product announcements, several companies caved in and are passing along the costs to all of their customers. As an example, the latest Atlas O 40' steel reefer announcement lists four road names. Two are UP licensed products and one is a CSX licensed product. One is not a licensed product, but it costs the same as the licensed products. I'll get off the soap box now.

[brianel027]

Well the same could be said for the types of trains being made as for the issue of being charged more for model trains with the UP logo on them.

The trains are being made overseas, yet with scant few price reductions despite ridiculously lower labor and production costs. Even the non-scale traditionally sized trains keep going up in price even though the tooling/dies have been around for ages and have long since been paid for. I've long felt that the higher prices across the board on all train products are helping to subsidize to some extent, the vast amount of new product development on the scale end. This new tooling does not pay for itself with the first run, even though I'm also certain the emphasis of tooling longevity has now turned to the short-term instead of durability on the long-term.

Or to take Dave V.'s original thought one step further, the non-scale traditional train buyers are helping to pay for the cost of product development of trains they won't buy. Lionel has tooled up exactly one non-scale traditional car in the past decade, the Waffle Box Car.... I'm thankful for that. How many new scale sized cars have been tooled up in the same exact period? Maybe it's just the market and economics speaking here. But Lionel and others consistantly speak of strong sales on starter related items.

*** Maddox said before Lionel moved overseas, that Lionel couldn't compete with production in the states anymore. Labor costs were only part of the picture. What he really meant was that Lionel couldn't afford to do new tooling anymore. Notice too that the big rush of new product with brand new tooling came after Lionel moved all production to China.

But "selective pricing" has been around forever. Companies frequently lower the MSRP on something that is more expensive to produce by raising the MSRP on something that is cheaper to produce. It's their decision and the consumer can like it or lump it.

Or to put a different spin on this topic... The previous above comments on copyright logo issues are all valid. So the Union Pacific is exercising their rights or pushing their weight around, so to speak. They feel the use of their logo is worth some money and they want that money. Seems to me that Lionel for years has felt their trains are worth more than everyone else’s. Consider the K-Line Train-19 cars for $19.95, which includes very nice die-cast trucks. The most comparable Lionel product are their starter set cars with plastic trucks for $26.95. Since the cars are manufactured in the exact same Chinese facility, what makes one worth more than the other? The K-Line car is obviously a better bargain. Same could be said for comparing a Williams GP-9 to a basic starter Lionel GP-9, or a Williams Centercab switcher to one of the recent Lionel ones.

Lionel feels they can justify charging more for delivering less quality. Why? Because of their name certainly for one reason (maybe like the Union Pacific?). And another reason is that people are buying the cars at the price Lionel charges (though the blowouts would make one wonder). If they weren't, Lionel would have to reconsider the production of the cars or the pricing of them.

Ironic too, that with all this talk about licensing and the Union Pacific, that Lionel has a copyright on the orange and blue box. Or as a friend once said to me after buying some K-Line stuff, "I want to pay for a train car inside the box, not a higher price for less quality and a copyrighted color scheme on the outside of the box."

Lionel also has had an extensive merchandising program in recent years and I understand has been aggressive about going after companies using the Lionel name and logo without permission.

So railroad history is being rewritten right now as the Union Pacific meets Lionel at Promontory, Utah. And in the historic photograph capturing this new revised moment in railroad history, there aren't many railroad workers in the picture. But there is a whole load of very happy lawyers smiling.

The new "golden spike" has been hammered in, but this time not into the track but into the wallets of the model train consumers everywhere.

[Anonymous]

Hello All: Just a short footnote, Have you ever gone to let's just say a website that delivers adult content - and not give the URL - O Gaugeoverlord ? I did when I first got the computer 6 years ago, I figured it would have press releases & how well the President was doing. But guess what happened, it shows America's first Ladies.(Don't let your Kids go to that site). As it turned out someone was sharp enough to scoop up the rights for that site, Imagine the number of hits that site gets. I guess one of us should have sharp enough to broker the license rights to as many RR as possible, Then we would have had Lionel, MTH, K-Line Etc. by the ears. Kind Regards to all Steve

[Jumijo]

QUOTE: Originally posted by Ogaugeoverlord

I'm not sure that any business decision has ever been made because someone saw a Union Pacific freight car on a model railroad layout. I doubt if a traffic manager has ever said "Well, we're only served by BNSF, but let's route via UP because I like that centerflow hopper on my son's layout," or some titain of industry has located a new factory on the UP because they had a UP F3 set as a kid.

Conversely, if a traffic manager didn't ship via the lowest rate/fastest route because he was beefed at UP's attitude toward model railroading, he'd probably lose his job, and rightly so.

I think this "advertising" angle is a myth. Railroads don't view their own rolling stock as advertising, so why should they look at 1:48, 1:64, or 1:87 cars as ads? If they thought their own 1:1 scale cars were rolling billboards, most freight cars wouldn't look so terrible.

I think UPs position is silly, but to say that they'll be hurt by guys NOT buying UP locomotives and freight cars due to the lost "free advertising," isn't based on the real world.

Personally, I'm glad I'm a New York Central fan.

It wasn't suggested that railroad business decisions were made based on something seen on a model railroad. But to say it's not a form of advertising isn't correct either. Any item with a logo or other identifying signature tied to a venture is advertising, pure and simple. For instance, I live in Massachusetts, and I never saw an ATSF passenger or freight train here. I have no reason to know the railroad's name at all, yet I do because I had toy trains as a child with their livery splashed all over it. You're a NYC "fan". Why? Do you live near it? Did your toy trains come in that livery? Do you like their cigar band logo? How and why do people become "fans" of a particular railroad company? In my case, my preferences were formed by what was on my toy trains. Up here, the Boston and Maine is THE railroad. Maine Central and the familiar blue B&M freight cars are frequently seen items in real consists. But those roadnames aren't seen very often on toys.

As for railroads not viewing their own rolling stock as advertising, I don't buy that. If that's true, why do they all have logos and slogans on them?! "Be Specific - ship UNION PACIFIC" has got to be one of the most famous slogans ever put on a freight car. I saw one once many moons ago as a child and never forgot it. I have to believe somewhere out there, at least a few business men sitting in traffic at crossings saw that same slogan and called UP when they needed something shipped. If logos or slogans on rolling stock isn't advertising, a bar code on a generic colored, unlabeled car would be just as effective for identifying who's is who's, right?

Jim

[Anonymous]

CSX is demanding payments from New York Central modelers. NYC fans do not get off scot free.

[Anonymous]

Lots of philosophy here--I am overwhelmed. Most of you guys are not addressing Dave's original point. Is it fair to charge me extra for my ICRR steamer model because the company who produces it has to pay UP license fees? Let me vote NO.

On the advertising issue, If I were vacating (on vacation) around Kansas, I would go a couple of hundred miles out of my way to ride on the AT & SF. Now whether that is due to the song, or the fact that every toy train store I have ever been in has an AT & SF diesel streamliner on display, I don't know; but they definitely have brand recognition, which is what a major part of advertising is about. I have ridden the "Sunset Limited," "The Orange Blossom Special," and "The City of New Orleans." All of these rides were selected in place of other more convenient modes of transportation, and because I was familiar with the names. Can a railroad sustain itself on that kind of patronage--of course not, but it's additional revenue. If UP insists on license fees for models of its trains, then the people who buy those models should pay the fee, not someone who can care less about the UP. Anyone notice that about fifteen or twenty years ago Betty Boop (from the thirties) had a resurgence of popularity? It was because her copyright had run out and not been renewed, and Mickey Rat was being fractious about his image. Did Betty push Mickey out of the market? No, but she sure cut herself a much bigger slice than she had when she was copyrighted. The Mouse is a Louse.