UP trademark objection

[Anonymous]

UP standard licensing charge is .05% of total UP sales of a company that sells 20% or more UP products or, 3% on a company that doesn't. Remember these percentages come off of the manufacturers sales, not the total price of the model. Meaning on a car you would pay 50 dollars for, UP makes pennies.

Here is a quote from the form one would fill out to attain licensing.
In order to encourage model railroad hobbyists, Union Pacific has created two payment options for licensees in the model railroad
industry. These options are available only for model railroad equipment sold primarily to hobbyists. Licensee applicants who produce
Union Pacific-branded products sold primarily as toys must fill out the standard licensee application and are not eligible for
these payment options. If you are not sure whether your product should be classified as a toy or a hobbyist item, please contact
Union Pacific.
Option 1
A royalty of three percent is payable on any product bearing a modern, historic, or constituent logo licensed by Union Pacific. The
licensee will pay an advance on royalties based on the wholesale price of the product(s) and estimated annual sales of UP-branded
products.
Option 2
An annual fee of .5 percent (one half of one percent) of total licensee gross sales of all model railroad products will be paid to
Union Pacific. Gross sales will be calculated on the most recent completed year of sales and will be based on an audited financial
report. Licensee applicants with gross sales in excess of $1 million should contact Union Pacific for additional information.
Option 2 is based on the assumption that Union Pacific-branded merchandise comprises roughly 20 percent of average industry sales;
licensee applicants whose Union Pacific-branded inventory comprises less than 20 percent may want to consider selecting Option 1.

The only thing else required should be: How you plan to sell the model, what the model is, products already in production, and assorted company information. I see nothing unreasonable. UP for reasons may decide to turn down someone’s request, but that is their choice, and since you are using their property and any other railroad could do the same. Union Pacific even provides you with the logos. If you were wondering here is a list of people who have attained licensing form Union Pacific. http://www.uprr.com/aboutup/licensing/suppliers.shtml#4

Fallen flags are another story all together.

[tdetmer]

James,

Carefully read my response. I did not call the UP "evil." I simply didn't like how heavy handed they've become on this trademark issue. And by the way, the use of a fallen flag as it is known may actually not be illegal because it may be abandonment of the mark. But that's a side issue regarding my point with you. I was hard on the UP and not the others (about which I don't have any information) because they were unreasonable with someone who tried to work within the system to get rights to the mark. And its not just about a few pennies. S Helper would probably have paid a reasonable sum for the right to use the mark if that was all that was at stake. The UP wanted rights to the tooling and equipment that produced the items for S Helper. In other words, the UP went beyond what seemed like a reasonable compromise for all concerned, which would have been to grant a license to the mark for a small royalty on anything sold with that mark. That's why I called them hardnosed and I'll stick by that. Of course businesses need to be profitable but this issue is not about that. It is about unreasonable greed. If the UP needs the revenue from toy trains to stay profitable, then its really in trouble!

Tom

[Anonymous]

Well, I don't see anything wrong with charging for fallen flags, I think they are just trying to protect thier name, from being used (D&RGW Pizza, or something).

[tcripe]

I don't have a complaint with UP protecting UP trademarks by charging a license fee. My complaint is their extension of this to the fallen flags they acquired. Sure, they have the right to do that. But what are they protecting? They sure didn't waste any time repainting their acquisitions to UP markings, so they must not have thought that their trademarks were worth that much. And surely no one thinks that someone would take the trademark of one of these fallen flags and create a serious rival to them? Legal counsel advised that they paint a few locos to "pay tribute" to these fallen flags, but it seems we hobbyists are the ones who are paying the tribute to UP.
- Terry

[Anonymous]

Well, that I can understand. I don't agree but it makes sense. In the 1940's when the average person traveled by train it was much more like advertising. UP has done a similar thing, I don't know if you watch it, but a great layouts featured on RFD TV, featured a layout built by kids and paid for by Union Pacific. Furthermore the licensing money is used for safety advertising, not a CEO's back pocket. UP's licensing is for the protection of the names, if they wanted money much more would be charged much more, like other companies do for their trademarks, and licensing. I would like to cast out the notion that people violating these laws and are "innocent hobbyist." They are not they are stealing from UP, just as if I printed a calendar and called it the Classic Toy Trains calendar, without getting permission. Or if I make said calendar and get sued, is it be cause of the magazines greed? Or are they trying to protect their name if I put out absolute crud and make them look bad. If I ask permission, which I should do, and am turned downed, I have not been robbed from. I too would complain if UP were charging ridiculous amounts, and stopping everybody from making models. This is not the case however. I am willing to pay a few pennies more. If you can’t afford the small amount extra UP is charging maybe you need a cheaper hobby, like collecting dust bunnies.

[Anonymous]

Lotus098,

I don't care if it's UP, CSX, Amtrak, Budvar, or whomever. Greed is Greed! Like a group of Toy train enthusiasts are going to cause great harm to any of them!?

When Lionel was developing thier F-3 in the late 1940's. It's my understanding the Santa Fe RR paided Lionel $7000.00 to pay for part of the tooling just to have their road name on it! Times sure have changed!

[Anonymous]

QUOTE: Originally posted by Big_Boy_4005


Thanks for clearing up the trademark law date part. Lotus is only 14, and isn't really familiar with that aspect of this discussion.

So what do you think about Spikes's situation? If the decals have already had the fee paid, why should he have to pay again to use them? Even the government doesn't double tax.

Nice try, and nice try. The government doesn't double tax. Sure on one item you can have shipping taxes, gas taxes, and sales taxes. The government is much worse on people than the UP, and you know it. But, I am only 14 allowing my opinions and ideas to be discounted without even being considered, even though I have been right so far, and know what I am talking about.[sigh]

[Anonymous]

QUOTE: Originally posted by tdetmer

As far as the decal issue is concerned, I know that the article in S Gaugian, which is where I first saw it, was about the problem that S Helper had. S Helper tried to get a proper license but was held up by the UP in a form of highway robbery (property rights notwithstanding). There was another little piece of that article (entitled "UP: The Grinch Who Stole Christmas" in the Nov/Dec 2005 S Gaugian for anyone who cares to read it) about a guy who sold train calendars that he purchased. He had total gross sales of $3000 per year - a big operations, right? Anyway he got one of UP's nastygrams telling him to "cease and desist." So even though he was selling a calendar produced by someone else, he was found liable in the final judgement awarded to the UP. So we know the UP has the law on its side, but as a matter of equity it smells.



Tom
I agree with Elliot. The UP doesn't care. It just wants the money. It apparently didn't try to see reason in working with S Helper Service and it certainly didn't use good judgment in going after a $3000 a year calendar sales guy. These guys are hardnosed and mercenary as we said before.

What is with you people? Why are you always picking on the UP why not CSX, or Amtrak?

Sure, just like all "evil" big businesses. UP has to be hardnosed or they will get trampled on and all protections of their name will be useless! 3% of sales of the manufacturer, or only .05% if 20% of their products are UP, is hardly anything compared to most other companies: John Deer, Nascar, Budweiser, and many other companies. Do you realize that if stolen trademarks and licensing were counted in the United States wouldn't run a trade deficit, $ wise? Oh, well I guess Microsoft should just give their stuff away free too.


[?]Is UP in business to please you jokers, or to run trains and make money [?]

[tdetmer]

As far as the decal issue is concerned, I know that the article in S Gaugian, which is where I first saw it, was about the problem that S Helper had. S Helper tried to get a proper license but was held up by the UP in a form of highway robbery (property rights notwithstanding). There was another little piece of that article (entitled "UP: The Grinch Who Stole Christmas" in the Nov/Dec 2005 S Gaugian for anyone who cares to read it) about a guy who sold train calendars that he purchased. He had total gross sales of $3000 per year - a big operations, right? Anyway he got one of UP's nastygrams telling him to "cease and desist." So even though he was selling a calendar produced by someone else, he was found liable in the final judgement awarded to the UP. So we know the UP has the law on its side, but as a matter of equity it smells.

I agree with Elliot. The UP doesn't care. It just wants the money. It apparently didn't try to see reason in working with S Helper Service and it certainly didn't use good judgment in going after a $3000 a year calendar sales guy. These guys are hardnosed and mercenary as we said before.

Tom

[Big_Boy_4005]

QUOTE: Originally posted by FJ and G

My main beef with the UP trademark scandal (scandal???, whatever); is that the toy train companies (unlike some model train companies in the smaller scales), are charging the SAME price for UP stuff as for other stuff. Sooo, everyone is helping pay UP.

I think that like the smaller scales, the UP stuff should be marked up.

I'm just happy I'm done buying toy train stuff. I have enough for a lifetime and the only thing that would entice me to buy is if i find an affordable live steam toy train engine for my backyard project.

Actually Dave, if they didn't spread the fee out, the sticker shock might be so severe that it would impact sales. The HO example I gave earlier amounted to about a 15% jump.

The beauty of this thing from UP's perspective is, where once there was nothing, there is now an entire self supporting department devoted to enforcement and collection.

American business at it's finest, dump on the little guy, because they can.

[Big_Boy_4005]

QUOTE: Originally posted by AlanRail

Every other month or so this comes UP! UP owns the mark, not Atlas, Lionel, Kline, MTH, etc. That UP choose not to enforce their rights before now is of no consequense, latches doesn't apply to intellectual property claims.

Trademarks rights unlike patents or copyrights last FOREVER or as long as they get renewed with the USPTO. So if you're thinking about waiting out UP... think again.

In the alternative, we can all buy shares of stock in UP, vote out the current Board of Directors and replace them with ones that will fire the current officers and then have the trademark policy changed by new officers.

So what will it be??

Alan, I think we are beyond the ownership aspect of this issue. We understand that we have to live with that part. That doesn't mean we have to like it.

Thanks for clearing up the trademark law date part. Lotus is only 14, and isn't really familiar with that aspect of this discussion.

So what do you think about Spikes's situation? If the decals have already had the fee paid, why should he have to pay again to use them? Even the government doesn't double tax.

[Big_Boy_4005]

Spike, are you using decals on the models you paint? I thought UP had hit the decal manufatcurers already, which would mean they had paid the fee. They shouldn't be allowed to double up like that. Beside, how many UP items do you produce per year. The next thing you know they will claim they want a fee for yellow, grey, and red paint. How did big brother find you?

It seems like they have way too many lawyers, with way too much time on their hands.

[Anonymous]

I custom paint and produce, made to order freight and passenger car sets from blanks I obtain , to order. I recieved an e mail from Union Pacific with a file attached. This pretty much explains it all in itself about Union Pacific and any Items being made or markeyed with any roadname or emblem that they own. It is a pdf file. They want their cut too is what it comes down to. Spike

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

[AlanRail]

Every other month or so this comes UP! UP owns the mark, not Atlas, Lionel, Kline, MTH, etc. That UP choose not to enforce their rights before now is of no consequense, latches doesn't apply to intellectual property claims.

Trademarks rights unlike patents or copyrights last FOREVER or as long as they get renewed with the USPTO. So if you're thinking about waiting out UP... think again.

In the alternative, we can all buy shares of stock in UP, vote out the current Board of Directors and replace them with ones that will fire the current officers and then have the trademark policy changed by new officers.

So what will it be??

[Big_Boy_4005]

Doug, my understanding is that Amtrak has been licensing for a long time, even with Lionel. The rest of the class 1 railroads will probably all join in, albeit with much less contraversy.

Once everyone is doing it, we probably won't see the disparity from one road to the next, but rather slightly higher prices across the board, and equalization, depending on the deals that are struck.

[cnw1995]

Elliot, I appreciate the advertisers that let you know - A relatively recent Railway Age magazine - I'll have to go upstairs to the library to look up which - reviewed logo and fallen flag trademark licensing and as you noted, mentioned Metra, Amtrak, other transit agencies, BNSF, CN and NS were pursuing this. I noticed CP was absent.

[Big_Boy_4005]

QUOTE: Originally posted by lionelsoni

Powernailer, UP is actually very interested in gaining supporters for "the American Railroads", their own in particular. Why else would they go to all this trouble?

http://www.railpictures.net/viewphoto.php?id=123121&PHPSESSID=7324cb5827395190e008e52948c19f1b

I'm glad you mentioned that Bob. I think it clearly shows which side UP execs think their bread is buttered on. I am of the opinion that any monuments to politicians, past or present should be left to the government, and not big business. It's not illegal, but it's not pretty either, much the same as the licensing.

I sure haven't seen any other railroads acting as blatently as this. All of these actions do make one wonder if UP really isn't out of line.

[Big_Boy_4005]

QUOTE: Originally posted by cnw1995

I understand all the major roads are now actively protecting their trademark claims - some, like CSX and NS, much more quietly than others.

Doug, there is an Atlas ad on the inside cover of the current issue of MR, and at the bottom only UP and CSX are listed as licensed products. This doesn't mean that the others won't jump on the bandwagon in the future. It just means they haven't yet.

On the inside back cover, there is a Kato ad which says that Chicago Metra is also licensed.

[FJ and G]

My main beef with the UP trademark scandal (scandal???, whatever); is that the toy train companies (unlike some model train companies in the smaller scales), are charging the SAME price for UP stuff as for other stuff. Sooo, everyone is helping pay UP.

I think that like the smaller scales, the UP stuff should be marked up.

I'm just happy I'm done buying toy train stuff. I have enough for a lifetime and the only thing that would entice me to buy is if i find an affordable live steam toy train engine for my backyard project.

[IRONROOSTER]

QUOTE: Originally posted by AlanRail

Actually trademark, copyright and patent rights go back quite a bit farther:

U.S. Constitution, Section. 8., under Clause 1.

The Congress shall have Power To . . . :

Clause 8:

To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;

In England at the time this was not the law.

Trademarks get lumped in with patents and copyrights, but they are not the same thing. For one thing patents and copyrights expire, second trademarks are not writings or discoveries. The original purpose of trademark laws was to protect the consumer so he would not be deceived by fraudulent businesses masquerading as the real thing. That's not really an issue here, but there were extra clauses added to the trademark law pertaining to dilution, etc. that have enabled companies to sell usage of their trademarks. What is really needed here is a fair use law for trademarks and a better definition of how trademarks expire. UP is claiming all the old trademarks even though they aren't used - I know they are doing some retro painting, but just try to call up C&NW to order a boxcar to ship your goods. Unfortunately, given the current political situation I don't expect any improvement from the Congress, hopefully someone has the money to successfully fight this in the courts.
Enjoy
Paul

[cnw1995]

I understand all the major roads are now actively protecting their trademark claims - some, like CSX and NS, much more quietly than others.

[lionelsoni]

Powernailer, UP is actually very interested in gaining supporters for "the American Railroads", their own in particular. Why else would they go to all this trouble?

http://www.railpictures.net/viewphoto.php?id=123121&PHPSESSID=7324cb5827395190e008e52948c19f1b

[AlanRail]

Actually trademark, copyright and patent rights go back quite a bit farther:

U.S. Constitution, Section. 8., under Clause 1.

The Congress shall have Power To . . . :

Clause 8:

To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;

In England at the time this was not the law.

[powernailer]

Isn't this a joke. Does the UP seem to enjoy losing supporters for the American Railroads or what. I do beleive that most people who are model railroders would probably defend the actual railroads when people complaint about crossings, noise, and many other things. So wouldn't you like these modelers on you side? We all know that the UP, Amtrak, BNSF, or any of the railroads are not making that much off of nickel and dime payments for using there logos.I agree, that maybe some kind of paperwork needs to be in order, but to get paid for something that actual benefits you in the public eye, bull crap. How many modelers might buy a different roadname if they had to pay more for the UP model? Pretty soon, people who deface (grafity) the railroads cars will what to get paid for their createtivity. I love watching the trains go by at the crossing, but some people don't. Sign the papers and get this show on the road, um track. Wouldn't it be nice if the under the table law suits, stealing each others tech items, and whatever would be resolved and get back to making trains. Seems like all we want in any business is to run the other guy out, no mather how. I guess you call that capitalism, huh?

[Big_Boy_4005]

I was in an exclusive HO train store this afternoon, and just for fun was looking at the prices of the engines. There was a $9.50 difference between paint jobs on the same model. I believe they were Athearns, with a list price in the $60 range. That's a big percentage.

I have always felt that UP is doing this for two basic reasons. First because they see Disney, Coke, John Deer, Ford, and hundreds of others doing it first. It's like the feel left out.

Second, because they can, and want the money. They know they have railfans over the barrel. In the old days they might have gotten some advertising value from letting Lionel and others use their logo when making models.

But times have changed, and UP has no use for name recognition. The entire Western US is really only served by two railroads anyway.

It really seems like there has been an attitude shift in all areas of American Business. The oil companies make UP look like regular philanthropists.

[tdetmer]

I think Elliot makes a lot of good points. I just wi***he UP would cooperate with the train manufacturers in allowing a licensed use of the various marks on a reasonable basis. That way the UP could protect its mark, it could get some goodwill out of working with the train manufacturers reasonably and we all could continue to enjoy this hobby. I don't know about the rest of you, but I worry that the royalties for this could add to the costs to make it prohibitive to allow the use of the UP and related marks. None of us want to be pirates. And we don't want to see cars and engines priced out range by the cost of licenses. There ought to be a middle ground where licenses could be granted for a nominal amount. This is not the UP's core business and other than protecting the mark, why make this big an issue out of it? I doubt the UP is going to manufacture toy trains but maybe I'm wrong. Even if the UP made 50 cents or a dollar a car, it protects it's mark and the cost to the consumer isn't extraordinary.

Tom

[Big_Boy_4005]

QUOTE: Originally posted by Lotus098

They had licensing laws in 1870? If you say so*.

*not sarcastic

No not licencing laws, trademark and copyright protection. Licensing is more of a 20th century phenomanon, and an outgrowth from trademark and copyright. The distinction here is, once you create and use a mark or other original material and register it, it belongs to you. You gain sole control of its use. The thing is this whole merchandising angle, where a company's registered mark is placed on an object that they didn't manufacture is the new part. The rules didn't need to change to allow for this, it's just a clever use of the existing rules.

A perfect example is Disney. Uncle Walt started out in the movie business creating animated characters. The funny thing is, not too long after that Lionel was in bankruptcy. I'm not sure who contacted who, but the Mickey Mouse hand car saved Lionel's butt, and showed the marketing potential of the Mouse. A big chunk of Disney's money comes from licensing their intelectual property.

You see? The laws have always been there, it's the way they are used that has changed.

[Anonymous]

They had licensing laws in 1870? If you say so*.

*not sarcastic

[Big_Boy_4005]

No James, the copyright and trademark laws are older than Lionel and UP. They have been updated from time to time, and it was the last update that may have started all of this.