Union Pacific is trying extort money from model train makers

[Anonymous]

Hello everybody,

Has anyone heard about this issue about the Union Pacific railroad trying to extort money from model railroad makers? I cut and pasted this commentary from Jim Hightower's no nonsence comentary web site (please note the source of this article below the main text):



A MODEL OF CORPORATE GREED
11/10/2003

In addition to being genetically disposed to greed, do CEO's of big corporations also carry the stupid gene?

Take the case of *** Davidson, CEO of Union Pacific railroad. It's now our nation's largest rail corporation, having swallowed up such other companies as Southern Pacific, the M-K-T, Chicago & North Western, and several others. Apparently, though, *** is not content merely to control the big trains, for he's also making a grab for the miniature ones – as in model trains.

How stupid. Like a bear being chased by thousands of angry bees, *** has incurred the wrath of everyone from model-train makers to the hobbyists and kids who buy the models.

What's up is that Union Pacific has suddenly demanded that model-train makers pay it a royalty on all sales of trains that bear not only its logo, but also the logos of any of the former railroads that it has absorbed. As the outraged editor of Mainline Modeler magazine put it: "The Union Pacific has interposed itself into the model railroad industry, demanding a percentage of revenues . . . without any investment whatsoever. It's simply a method of skimming a profit without providing a service. It is an outstanding example of greed."

Over the years, railroad corporations, including Union Pacific, have been delighted to be the subjects of model trains, seeing it as a form of flattery, free promotion, and goodwill. For it now to threaten and demand loot from these small modeling companies is an act of PR suicide.

Sure enough, train buffs are fighting back against what they now call "the great yellow goliath." Among other actions, they're organizing UP stockholders and buying stock themselves so they can go to next spring's shareholder meeting en masse to rail against ***'s railroad job.

*** stupidly is buying a trainload of ill will by trying to collect this pittance in royalties. To tell *** to wise up, call him: 402-271-5000.






--------------------------------------------------------------------------------


"Mainline Commentary: Can the Union Pacific Railroad Destroy the Model Railroad Industry?", Mainline Modeler, August, 2003.

[fiatfan]

I recently found out about this in Model Railroad News. I was extremely disappointed. I have watched UP trains for years, having lived in Omaha for about 14 and now see them in Iowa since they bought CNW. The Big Boys and Challengers were the most beautiful steam ever built (IMHO). I am seriously considering dumping all my UP stuff and switch to BNSF and its predecessors (always did like the orange and green GN color scheme). I will be very interested in other modelers' comments.

[Anonymous]

I love UP themselves but I can't stand there management![:(!][:(!][:(!]

[AggroJones]

Their modern management blows, but their equipment throughout history has been utterly spectacular. I really wi***hey would reconcider.

[Anonymous]

This issue is old.

Extortion is illegal.

Enforcing one's legal copyright is not.

And, no, charging manufacturers for the logos they use (and make moeny from) will not destroy the model railroad business any more than NASCAR charging for their logos to be placed on toy and model cars will destroy the toy and model car business.

Model makers who sell items with UP's logo are making money from UP's design. It is onlyl fair that they give UP some of that money. They can either raise their price an equal amount or accept a smaller profit.

Tell you what, print up some nice T-shirts with the "Model Railroader" logo and sell them. See how long it takes Kalmbach to come after you and demand either a cut of the revenue or that you stop selling the T-shirts.

No, you are not "advertising" for UP. No one will go into your basement and see a model of a UP locomotive and decide to ship UP because of that.

Paying for the use of a copyrighted logo is part of the cost of doing business and model train manufacturers got away without doing so (like everyone else does) for a very long time.

The law is the law.

[dehusman]

Old news.

Dave H.

[Anonymous]

ACL FAN,
You have beaten this horse to death! Your opinions on this subject are assinine! The simple truth of the matter is, YES, U.P. has a right to their trade mark. However, in this instance they are destroying good will and their reputation as a corporate entity on this planet!

It's fun to be the devil's advocate, at times, but this dog just won't hunt!

The law is an ***!

Mark DeSchane

[Anonymous]

*** Davidson is the CEO of Union Pacific. Such an exalted position is not achieved without a history of efficiency and innovative thinking.
I cannot think of a more splendidly innovative and efficient method of destroying over a century of public goodwill by this staggeringly avaricious demand for a "royalty" fee from railway modellers and their children for using the logo of Union Pacific et al !
I for one will be repainting all my UP stock with my own private logo!
Does he not realise that the tens of thousands of models worldwide with UP logos are walking adverts for his Company?
As an Australian, I see this as just another shining example of the infamous Corporate Greed of the USA. What a prat!
EMAIL YOUR COMMENTS TO *** [e-mail]

[Anonymous]

Okay next question--Are the Logo's & painting one the cars & engine that we are all buy Trademarked? I don't see a R with a circle around it on any of my stuff except for the Maker of the unit (Anthern, Kato, Lionel).

[Anonymous]

Dear ACL Fan,

Yes I agree that Union Pacific has a right to control the use of their own emblem and image but that is not the issue here. Did you know that Union Pacific thinks they own the rights to emblems of all predissesor railroads that have been absorbed not only by UP but by UP's direct predicessors? For example UP not only thinks they own the Chicago and North Wester image, but also railroads CNW had swallowed up! Do you really think that UP can lay claim to owning Chicago Great Western and the M&StL? And to those who think this is an old issue, I would like to inform you that UP is apealing a recent court decision that was decided in the Model Maker's favor. Considering the pro-corporate administration we have in the White House, the situation is still precarious. I was just recently told that Kaydee is dropping all roadnames from it's product lines that may run afoul this issue, we are not out of the woods yet!

[Anonymous]

Union Pacific Stopped being cool after 1982 after the UP-WP-MP Merger. The only reason I bother with their modern equipment is that it is kind of hard to not notice them when cavorting around the Powder River Basin. I would just as soon Model BNSF Pumpkin SD70MACs and make my life simple. But nope. Uncle Pete AC4400s are quite prevelent and even though I view Post 1982 UP as a third rate railroad, Their sheir numpers and force of precence precipitates their inclusion into my Powder River Basin Modeling plans. (To read them fully see my profile)

[dehusman]

Considering they still "own" the reporting marks MSTL and CGW and there are still cars out there with MSTL and CGW reporting marks and heralds on them, I would say they own the heralds.
Since this discussion has been made about 20 times each on the Railroader, Trains and Trains.Com Forums and about 10 Yahoo groups, why don't we just cut to the chase to save everybody the time spent wallowing through it :

Model railroaders don't like.
Its legal for the UP to do it.

Dave H.

[Anonymous]

QUOTE: Originally posted by deschane

ACL FAN,
You have beaten this horse to death! Your opinions on this subject are assinine! The simple truth of the matter is, YES, U.P. has a right to their trade mark. However, in this instance they are destroying good will and their reputation as a corporate entity on this planet!

It's fun to be the devil's advocate, at times, but this dog just won't hunt!

The law is an ***!

Mark DeSchane

I keep beating it because modelers keep posting about it and most of the time their posts seem to suggest that in the world of model railroading, laws don't (or shouldn't)apply. I am a businessman and I deal with legal issues like this frequently.

While I'd be just as happy to see a court of law rule against UP (cheaper models for me and you), it is really appalling to see all the "sky is falling" and "get UP" posts that result from this situation.

If someone were using these posters' property without permission, they'd be angry. But, again, because they see model trains as something other than an industry or business--which it is--they feel it should be exempt from real life laws.

This isn't devil's advocacy. This is--and has been in previous posts--a continuing reminder that business is about making money and doing so while protecting one's trademark is not wrong.


Now, you want to talk assinine? Let's look at logic and reality vs. your post:

Do you honestly think UP cares what model railroaders think of them? How many hobbyists ship goods regularly on UP? 1%? They could lose that business and not even flinch. "Goodwill" of model railroaders doesn't matter a bit to them, since their goal is to ship goods and make money. And the rest of the public could not care less, so there's no impact there from flagging "goodwill" either.

Ask Wall Street if protecting their copyright is "destroying" UP's "reputation as a corporate entity on this planet." The answer, after the laughing stopped, would be, No, they aren't. They are doing what any other company would do.

And, really, there are, what, 150,000 model railroaders in this country? There are 6 BILLION people on this planet, and I'd wager that 5,999,850,000 have never even HEARD of this issue, let anlone have any interest in it whatsoever. How is UP's action doing ANYTHING to their image "on this planet" when that's the case?

Bottom line: Just because you don't like something does not make it wrong, nor illegal, nor greedy.

[lupo]

[#ditto]
and let's all get back to model railroading instead of model Wall-steeting

[Anonymous]

ACL:

Bravo and well said.

Randy

[Anonymous]

I agree with ACL but I'll say one more thing, model railroaders and ralfans are the only people who like UP so there losing there only fans.

[cacole]

I just noticed an advertisement in the March 2004 Model Railroader magazine for a Kato engine that is going to cost $10 more if you want the UP version than what the models for other roads cost, so it seems like Kato is the first to pass along the additional cost to the modelers.

[Anonymous]

First, I don't see anyone here saying that what the UP is doing is illegal (though I have some question in the matter of fallen flags as the law says a trademark is abandoned after 1 year of non-use). There is a reasonable argument about the way this is being carried out. Do you realize there is a clause in the licensing agreement which allows the UP to claim the tooling for any product un which their logo was placed if the license agreement is ended? And that the UP can end that agreement unilaterally at will. Other railroads have licensing agreements to protect their copyrights without collecting exhorbitant fees. Likewise GM for their trademarks. Legimate protection of copyright is excellent and should be condoned. But this type of action is just another example of corporate greed.. The Chessie system tried a similar move in 1983. They backed down when the matter came up on the front page of the Wall Street Journal. It wasn't the goodwill of modelrailroaders they were afraid of losing but rather the goodwill of other businessmen who would see their actions as indicative of their overall poolicies. Of course, now that competition has been eliminated and only the UP serves much of the west they don't have to worry about a shipper changing to another rail line.

[dehusman]

The only add Kato has is on the rear cover and the UP engine is $5 not $10 more.

Dave H.

[lupo]

QUOTE: Originally posted by cacole

I just noticed an advertisement in the March 2004 Model Railroader magazine for a Kato engine that is going to cost $10 more if you want the UP version than what the models for other roads cost, so it seems like Kato is the first to pass along the additional cost to the modelers.

Is that so, or is KATO making use off all the commotion around extra charging for UP logos that they just want to make extra money for themself and let their customers blame UP for that extra [2c]

[Anonymous]

No it's not just Kato.
Athearn Bethgon Coalporter product review, page 119, March MR.....
UP 3-packs are $5.00 more than all other roadnames, [ including CSX who gave up their own attempted "royalty scam" long ago ].

Comparing the model RR field to diecast cars is comparing apples to oranges....the '' licensing agreement '' rationale on diecast toy cars & trucks is licensing FOR ADVERTISING AND PROMOTION PURPOSES, not to collect any " fees for modelling use".
Those diecast logo agreements were done just to promote a product...that's why ca. 2001 Coca-Cola logos are printed on Model A coin banks, or 1998 Caterpillar logos were printed on 1951 panel trucks.
In effect, the advertiser gets to actually CHARGE us for the privilege of owning something with their logo on it...it's like buying an NFL ballcap or a T-shirt with a beer company logo on it.....costs more than a plain one, doesn't it?
A number of diecast dealers I know DO agree that the whole licensing fiasco pretty much ruined the diecast-collecting hobby, but for totally different reasons than what we are seeing with UP and model trains.[V]
regards,
Mike

[Anonymous]

The thing I keep going back to and nobody responds to is why has this issue just come up? Model railroading has been around almost as long as real railroading and U.P. has never had a problem with it's logo being used. Having gone this long, my opinon would be their ability to change lanes now might be forfiet.

[Anonymous]

ACL fan, I have noticed over the short period of time I have been paying attention to this forum that you generally don't chime in unless you have a harsh word or two for someone. You also appear to be one of those types of people whom think their opinons are the only correct ones. I have been in business for my self for 29 years! Although business is about making money, it also should be about doing it in a fair and forthright manor. I don't think U.P. is aspiring to these benchmarks.

Although ACL fan and I disagree about this issue, he at least has an opinon and has the courage to state it. However, I don't know about you guys whom simply leave Dittos on the page.

[Anonymous]

QUOTE: Originally posted by dehusman

Considering they still "own" the reporting marks MSTL and CGW and there are still cars out there with MSTL and CGW reporting marks and heralds on them, I would say they own the heralds.
Since this discussion has been made about 20 times each on the Railroader, Trains and Trains.Com Forums and about 10 Yahoo groups, why don't we just cut to the chase to save everybody the time spent wallowing through it :

Model railroaders don't like.
Its legal for the UP to do it.

Dave H.

[Anonymous]

Ussing reporting marks of defunct railroads for equipment identification does not mean that UP owns the hearalds of those same defunct companies. Think about it, Union Pacific does not use CGW or M&STL heralds to identify their service so how could they lay claim that they own the image of those historical roads? Look at this another way; no railroad in this day and age usses the old Rock Island reporting mark, if UP started ussing ROCK reporting marks would they "own" the image of the old Rock Island? No!

Scott

[Anonymous]

QUOTE: Originally posted by deschane

ACL fan, I have noticed over the short period of time I have been paying attention to this forum that you generally don't chime in unless you have a harsh word or two for someone. You also appear to be one of those types of people whom think their opinons are the only correct ones.

Actually, if you look at my posts overall, you'll discover that the vast majority are substantive and deal with how-to's of techniques and such.

But those threads are short. They don't attract the attention that the "I like to post as much as possible" and the "UP is Satan" threads. So I'm not surprised that they aren't noticed.

[Anonymous]

ACL fan,

I am truly glad to hear that you are helpful to people. I try to do the same. I don't get the "Post as much as possibles", either. Also, I don't think U.P. is Satan , I simply think they are being exceedingly stupid!

Mark DeSchane

[Jetrock]

One other aspect of the issue of railroad company copyrights is precedent--often, cases of copyright infringement have been thrown out because 'the cat is out of the bag"--because an image was used by a non-copyright-holder for an extended period of time, it is considered to be in the public domain.

Now, it is certainly possible to show that model railroad hobby companies have made use of UP and other logos for the past century, repeatedly and consistently, for their products, and it would be fairly hard for UP or any other railroad company to claim that they had no knowledge of the existence of these products.

If this behavior was tolerated (and, in some cases, encouraged by railroad companies, who sometimes DID pay companies like Lionel to put their logos on cars) for so many decades, and the pattern of use of their logos has not substantially changed (putting them on the sides of models), how can UP show that they are being harmed through model companies' use of their copyright?

[jeffhergert]

The logos for the Rock Island belong to the Maytag Corporation.
In 1984, the Rock Island came out of bankruptcy as the Chicago Pacific Corporation. They became a holding company that wound up owning Hoover vacuum cleaners, Pennsylvania House furniture and a few other lesser known companies.
Maytag wanted the appliance companies and merged the CP Corp into them in the early nineties.
I read on a Rock Island Tech Society list that someone had seen a box for a RI marked product that it was produced under license from Maytag.

[slotracer]

First off......the model car industry (1/24 glue kits) had for many years not marketed any kits with Tobacco or alchol related markings so it was relatively impossible to get a Keystone Light Tbird NAscar, or Smokin Joes Top Fuel kit. Enter the cottage underground, decals could be had at a fair price and good quality from manufacturers who did not makr a company name anywhere on the decal. If I was still into trains and was doing the DRGW or SP and this became a debacle, I would turn to the underground, but also bare in mind that one could scan existing decal sheets that might be in danger of discontinuation or price escallation and create their own on an inkjet in the future.
There are a number of slotcar makers who make custom bodies or repops of old Aurora thunderjets in silicone molds in the basement and garage, sell at slotcars shows, teh net or other methods. Even small makers have been harassed byt he likes of Ford, GM or Ferrari and now have gone more underground or changed the name of the car they sell to avoid copyright hassles.
I worked for the UP in mamangement and resigned 3 years ago, my working for UP is the reason I pretty much lost interest in railroads, sold my stuff and went over to slotcars, they made me hate trains. Knowing what makes the folks tick over at 1416 dodge st, I have ZERO doubt that this is an income opportunity that someone saw and has added it to their performance review goals. Likely some management / law person who is outside the revenue stream of the company, they have realized a potential income opportunity that they developed and it is now part of their annual performance goals/review plan.
Class ones are under tremendous pressure to make financial performance for Wall street that just can't happen, this is what drives tehm to cut costs beyond reason and raise rates how much and where ever possible, when that runs out there is no limit as to what they will do to try to reach untainable financial goal targets, thsi is typical mindset driving this, believe me.