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There have been many posts about this subject, so I thought I would throw in my two cents. By the way - I AM a lawyer, and while nobody can tell you the final word in trademark law, my thoughts might shed some light on this matter. I also will tell you up front that I am of two hearts about this matter, as I can easily see both sides positions. From the railroad's position, their trademark is a piece of property, just like a boxcar or a depot. They have the right to control its use. For example, lets say you wanted to rent a coffee shop in the depot. You would expect to pay rent for that coffee shop space, right? And that rent would not "KILL + DESTROY" your business - you would simply factor it in to the cost of your services or products. Yes, the coffee is more expensive, but, that is one cost of doing business. Would there be some people who could not afford coffee in your coffee shop? Perhaps. But, then those people have the right to brew up their own cup of joe. The licensing of a trademark is just like renting that space for the coffee shop. As a manufacturer, if I want to use somebody else's trademark, I pay rent for that. In the UP case, it is 3% of the wholesale price of my product, and they have a say as to what that trademark is applied to. Just as I would not expect the railroad to furnish me with free real estate for my coffee shop, why should I expect them to furnish me with free decorations for my train cars? It was they, after all, who spent the money to develop their logos, paint schemes, and trademarks, and it is I who wants to profit from their efforts. And what of the modeler who can no longer afford to purchase my goods that are decorated with the UP trademarks? Well, under the "fair use" doctrine, he is free to make his own model and decorate it as he wishes - just like the guy who brews up his own pot of coffee. And what about the guy who wants to put the logos on other products? Perhaps a teddy bear with a UP t-shirt on? Or, perhaps just a teddy, with a UP train running into a well placed tunnel? Well, just like the railroad can't be forced to rent its real estate to a porn shop, there is no requirement that the owner of a trademark be forced to permit its tradedress on products it doesn't approve of. The railroad has a right to control its property. From the manufacturers standpoint, I also see their position. The manufacturer in many cases has been using the UP trademarks for literally decades without comment from the railroad. They also use the "fallen flag" railroads trademarks - marks that are no longer in use for literally decades - without comment or fees. Suddenly, the giant awakens to a flea on its back - and the UP wants to scratch it off. At the least, if the flea is going to stay there, as model railroading surely shall, the giant wants its 'blood money' - as UP does now. The manufacturers positions will almost surely be that they are simply exercising "fair use" of the trademarks, somewhat like a news paper who publishes a picture of a UP boxcar. They will also cry out "laches", which is a doctrine along the lines of "gee, you let me use your stuff for so long that I have invested in it, so you can't come along later and cry foul". Sometimes this works - you have to protect your property, lest someone else ends up with it, or at least a right to use it. I guess the funny part to me is that Lionel, who refused to pay UP its trademark fees, has its own very strong trademark licensing program, and certainly knows the value of protecting your image! Likewise, were I to start making model kits and put them in a blue box with a picture of a steam locomotive on the right side, with a Diesel on the left, and called my kits "Afterburn Models", it wouldn't be too long until the nice folks in Compton came looking for me and my money. Now, there is one argument that the railroads are in the transportation business, and model railroad manufacturers are in the toy business, and there is no possible way that the one could be mistaken for the other. And besides, the toy business is still just a flea on the back of the giant. Therefore, there is no chance for there to be an error on the part of either segment's customers as to what was being sold, and who was selling it. This is in defense of the idea that trademarks help prevent misbranding of one good as the goods of another, and there is no way a reasonable person would confuse the two industries. But, that argument still does not address the fact that the owner of property still has a right to use, or prevent the use, of his property. And the "de minimus" damages argument, that we are just a flea, really not hurting anyone, still does not address the idea that if I want to be free of fleas I can be. I am not a shill for the railroads - I wi***hey would simply go away and let us play with our trains without interruption. But, in fact, I am surprised that they have waited so long to get into this fray. Perhaps the railroads saw a lot of value in permitting their logos to be painted on every model train in town - after all, weren't we all riding passenger trains, and shipping LCL freight just a few years ago? It was free advertising! But, now, with passenger trains run by a broke and dying Amtrak, and every freight train simply an endless string of trailers and ship containers bound across the country to another port to Europe, the railroads don't see the value of the free advertising, nor the "dilution" of their hard earned, paid for trademarks. Were I a company like Kadee, InterMountain, Athearn, and the others, unless I was really really sure of my footing on this matter, I would simply license the trademarks and go on. Yes, in the short term this will mean greater costs, costs that get passed to the modelers. But, I would really hate to get a deal like Lionel got - pushed into bankruptcy for violating the trademarks and trade dress of Mikes Train House, plus a body slam from UP for violating their trademarks. And what of the train show pundits who have emblazoned their locomotives with "Billing America" as a crass comment on the UP's licensing efforts? That is an expression of the free speech permitted - nay, demanded - under the First Amendment to the Constitution. But, should the modeler start selling his art pieces as "UP" locomotives, instead of "Satire Art Piece", he ought to look out - cause the fun police will soon swoop down on him! We have the right to make comments on our world, and the pompous amongst us often are the target of scathing attack (think - Jerry Falwell in Hustler Magazine, being portrayed as "A##hole of the Month", his head protruding from the south end of a north bound mule, and his "life story" being a collection of filthy stories of supposed incest in an outhouse - ruled 'parody', no violations of law). But, put your 'parody' out as an authentic UP trademark, and you best watch out! The biggest problem, to me, is the requirement from the UP that the manufacturers disclose so many aspects of their finances in order to comply with the licensing agreement. Perhaps the railroad and the manufacturers could work out a deal where such detailed financial reporting is not required in order to comply. But, in the long haul, I would expect the courts to enforce UP's right to protect its image, and to exploit it for profit, just as they have since the first trademark cases back in the 1700's. So, we should all get ready for this - its coming.
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