Lawyers Lay Waste to Military Models Industry

[Anonymous]

There are times when Mass Murder seems like a tempting thought.

[davekelly]

Vssmith,

I'd be careful. Being that we brought capitalism etc. to what used to be the Soviet Union, I wouldn't be surprised if the Mig folks (I forget their formal name) gets in on the licensing bandwagon.

[vsmith]

So far I like the idea of just modeling Soviet jets and tanks, Hah, I always thought the Mig21 looked cooler than the F15 anyway....

[Pruitt]

QUOTE: Originally posted by Big_Boy_4005

What changed???? Intellectual property laws?

Yup. A few years ago there was a major revamping of all intellectual property laws. Even though I'm not a lawyer, I did follow some of the changes, and one was that, if a copyright or trademark is not enforced in one instance, it became harder to enforce it in others. That's what's behind the UP demand for licensing fees, and now, apparently, the plastic model industry.

Another wonderful illustration of unintended consequences, courtesy of our elected officials in Washington. To paraphrase Bugs Bunny, "What a bunch of maroons!"

[Pruitt]

This is very interesting.

I work in the defense industry, in aerospace. As we are working under a defense contract, everything we produce belongs to the government, not to the company. It's the same for all programs, as far as I know. I'm surprised the producer can claim intellectual property rights to the government's property. Then again, I'm no lawyer.

Maybe I'll call the company's legal office and ask them about this....

[davekelly]

Chuck,

LOL. You caught me! Of course folks that know me say I've been long winded way before I got admitted to the bar (others say I should be hit with a bar - of steel that is!).

Fazby,

You must have seen the result of some of my modeling projects. I need to model a plastic scrapyard on my layout - the thing will make a mint of all my projects gone bad. Of course in your scenario, the jury result would be simple - it was the fault of Dave's model and track work. There is no way I could keep a straight face and say otherwise!

Bikerdad (I ride a FXST - what's your fun?)

Unfortunately you are right. I doubt very much Monogram, or Athearn or any model manufacturer has the assets and war chest to fight off the Boeings and UP's. They'd be bankrupt even before trial. What we need to do is find out if any modelers (military, railroad or otherwise) are in Congress. Perhaps that might help. I love your solution concerning the military models!!

James and Tom,

Yup - you guys are right, scratchbuilding would solve the problem except for those like myself that struggle with a blue box kit!

[Bikerdad]

Military models: The only thing that allows these licensing fees to proceed is the unwillingness of manufacturers to challenge them. If I produce a model of an F-15 Eagle, who can collect the licensing fee? Mind you, I'm producing a model of an existing aircraft wholly owned by the United States gov't, with no mention of McDonnell-Douglas. The same can be done for ANY military model, simply omit any mention of the manufacturer except quotes from gov't sources. The argument that Revell/Monogram is somehow infringing on Boeing's trademarks can't fly for two reasons. The first is that nobody is going to mistake the model for the real thing, at least no reasonable person will. Second, and even more important, the market for the prototypes is extremely tightly controlled, so the argument that Revell/Monogram has somehow hurt Boeing is ludicrous.

Nonetheless, the surest solution to resolving this is simple: place into the next DoD contract for Boeing, Lockheed, Sikorsky, GM, Ford, etc, etc, a provision that the contractor waives any past, present and future licensing fees vis a vis any scale models of any and all vehicles developed primarily for military use. In the interest of patriotism, limit the licensing waiver to domestic model manufacturers.

[Anonymous]

OK, I wrote the serious post before; now the fun view.

The companies are licensing the logos etc to protect themselves from liability caused by hobbyists!

Model railroaders strive to make their models more and more realistic with a goal of being just like the protoype. What is the hobbyist succeeds? The model is a perfect replica of the prototype and is proudly run on the owners layout and those of friends. Then a derailment occurs.

Will the prototype be recalled or outlawed because the model is unsafe? What kind of product liability will ensue?

"Ladies and gentlemen of the jury, you have heard testimony that Dave's prototypically modeled engine has derailed. UP has taken no steps to determine whether the problem lie in Dave's engine model or in his trackwork. Clearly, the UP has no business runnning that model until Dave has solved the problem, especially if they have not undertaken a study themselves. You must find for the plaintiff!"

Pete
Just a poor tax guy taking a break during the season.

[Anonymous]

Corporations who use another corporations trade names and logos for profit must surely be liable to pay for that use (if the first company is willing to even allow it under license). So Atlas (say) who make models for profit, pay Union Pacific or CSX for the use of their logos. The license fee either eats into their profit margin, or more likely, they pass it on to the end consumer if the market will bear it.

If however I go to my workshop and make a model of something I have seen (maybe even taken some photos of) for my own use thats art - I'm not doing it for profit. It would be a brave lawyer who tried to sue me for making a representation of something which is already in the public domain. Profiting from copying something, and publishing it in the public domain, are two of the cornerstones of copyright law (both here in the UK, and as I understand it in the US also).

At the moment it seems that this is only affecting the US market - I have heard no rumours of this affecting either German or British models. It seems that the big railroads and loco manufacturers have taken a fairly sensible line in terms of the level of license they are demanding (unlike the aircraft industry it would seem), as its only adding a dollar or two to the price of a loco, car or decal sheet - it isn't the end of the hobby as we know it.

I believe copyright controls cease after 50 years, so if it does get crazy we will all have to look back to the late steam era for royalty free models (I guess that takes in some of the early diesels too now).

[Anonymous]

There is an answer to the licensing costs. Scratch built items are very hard to charge a licensing fee for. I do predict that inspite of the grumbling and gripeing, the sales of licensed models will continue into the foreseeable future. Just another cost to be factored into the hobby budget, not a reason to give it up. It ain't fun, it doesn't seem right, but there you have it. It is a fait accompli and we must live with it.

Tom

[cefinkjr]

Dave:

I like your idea about good will advertising for the prototype manufacturer being included in the kit by the model manufacturer in exchange for the right to produce the model but it probably wouldn't work for some reason -- mostly because it's too logical.

Chuck

PS: You didn't have to confess to being a lawyer; the length of your posts gave you away. Only my lawyer daughter could have written longer posts. [:D]

[cefinkjr]

Wayne:

QUOTE: Originally posted by Muddy Creek

A new business of mine involves scale models of the product of a major retailer. An inquiry I made regarding use of their company name in connection with my product returned a gracious letter from the Senior Counsel of their intellectual property management department offering no objection to my intended use of their name and wishing me the best of luck with my project.

You just have to figure out a way to use this in your advertising[8D]. Such corporate behavior should be rewarded.

Chuck

[davekelly]

This and related threads have become very interesting to say the least!

Ironmine
I think you're right that General Dynamics makes the M1 Abrams, but I want to think I read or saw somewhere that Chrysler did the initial work on it - they were working hard to win the contract because Chrysler at the time was in dire straits.

Good point about lawyers waking up every morning thinking about how to sue someone. Of course there would be no suits without clients. There are times I envy my breatherin in the personal injury field for some of their huge wins. Please remember, however, that these wins are handed out by juries (you know the thing that many brag about getting out of). There seems to be proposed legislation out in nearly all the states trying to cap the amount of awards given - but very few have passed. This is kind of confusing. You'd think the major entities in this country would be spending scads of money on this to limit their liability.

Fazby (that's a cool handle- how many folks can recognized that one?!?)

Yes, you'll probably be unpopular with that statement, but it is true. Companies work hard to promote their name and their products. It would be unfair for me to make up a cola and call it Coke, thus selling my product because people think its "the real thing" (oh god I'm sorry about that - but it was too good to pass up). There is also a protection of the public issue. I can't make a vehicle in my garage and market it as a Ford Explorer. Folks could conceivably think my vehicle is the same as the one made by that Michigan company and purchase it (if you ever see some of my kitbashing results you'd know what a mistake that would be!). Where there is the possibility of public confusion the line is clear (thus in West Virginia a guy calling his lingerie shop Vickie's Secret, or Victoria's Got a Secret was found to be infringing on a trademark). But if there isn't there may not be a violation (Thus there is Federated Department Stores, Federated Investments, Federated Insurance and Federated the auto part company). I think it would be a clear violation if Atlas were to make a model of a UP Diesel and package it so it looks like UP manufactured the thing. But what if it is clear all over the package that this is made by Atlas, sold by Atlas etc?

The question is really where do you draw the line? If I take a photograph and it the is considered art and fetches big bucks (yeah right) do I owe Chevy a royalty because there's a Corvette in the background? What if the Corvette was the picture? Yes, it would be a violation if I started a railroad here in West Texas, painted the engines that (to this PRR fan) godawful yellow and named it "Union Pacific." Arguably I would derive revenue based on the real UP's work and perhaps ruin UP's reputation when my trains lose freight and get into hundreds of accidents. But is there damage to UP if I take a photo that has a UP train in it and I sell that photo? Is there damage or harm if I make a model? Is a model the same as art? (well, Pelle's models might be, but not mine) How about the name that hasn't been used in years? (Pennsylvania Railroad). Should that be protected if it isn't used anymore in the way originally intended? How about if a product is no longer made (is the design of the F-117 protected? How about a B-17? How about the Mayflower?).

This is a merky area. I don't think that any model company has ever taken a suit all the way through a court. The costs would be prohibitive - and the risk of huge damages too great for what are for the most part tiny entities battling againt multi-billion dollar corporations. If you read the article linked at the beginning of this thread it says that there are attorneys that think the licensing fee may not be defensable. However, who's gonna fight it and risk getting sued by the big boys?

Yeah, fazby, I'm sure there are some accountants involved in this thing. But bottom line is that a CEO is the one making the decisions for a corporation. The lawyers can say "we would be legally right" the accountants can say "we'll increase revenues" but the guy running the company makes the decision of whether or not to lean on the little guy.

Big Boy,

What has changed? I think the attitude of people has changed. The article which is linked on the beginning of this post describes it best. For years the corporations didn't mind little companies making models of their stuff - even taking an "increased good will" approach to it. I think what has changed that the business model is dominated by short range thinking (a buck today is better than 10 bucks 5 years from now because if the stock holders don't get a big dividend I'm out of job), bottom line now, hard nosed, crush everything that I can mentality.

While I believe that corporations have a right to protect their intellectual property (ie: Chevy putting an Explorer tag on a car) I think that when it comes to models they need to think a little beyond the simple answer (we're legally right, we'll raise money).

Sorry if I bored anyone. Actually, I should say, sorry I bored everyone.

[vsmith]

Dave unfortunately I dont. Like you said, the big companies and the short sighted execs at the top are basing their decisions on short-term profit oriented quick-gain fundamentals. The prevailing attitude seems to be "we're to big to care what the public thinks" at least until one of thier aircraft falls out of the sky...then they care, Oh boy do they care...

[Big_Boy_4005]

Pete, I think it's the principle of the matter. For all of these years there was no problem and no fee. Now everyone suddenly feels the need to get their fingers into the pie. What changed???? Intellectual property laws?

[Anonymous]

Please forgive my ignorance. At the same time, please enlighten me. What is the magnitude of the licensing fee discussed?

If it is a few cents per item, this is hardly a reason to be in an uproar. If it is a dollar an engine, it won't be noticed considering current prices. Even at a dollar per box car, it will not end the hobby.

Hard as it may be to swallow, the licensed name/logo/whatever does belong to someone. They have a right to charge for the usage. If there hasn't been a charge until now, well the free ride is over. (Just made myself real popular here...) If you had the valuable name, would you give it away for free? (Yeah, sure you would. Easy to say when you do not have the name.)

PERHAPS, (counsellor, you can comment on this) a name is being protected. If the name is allowed free use, anyone can use it. Some companies have fought hard to keep theirs unique. As a result, we do not have Minolta xerox machines, Scottie kleenexes and Pepsi cokes.

As for accountants being involved, could be. And that accountant is earning his pay. We (that's right, I am one of these Continual Pains in the Asterisk) are supposed to help control costs and, teamed with marketing, improve revenue.

You wouldn't complain about a tax saving idea would you? That comes out of everyone's pockets because you pay less to the government.

Geez, this is becoming way too philosphical. Trains are supposed to be fun!

Well, this is my second post - seems appropriate to toss in my two cents worth.

Pete

[Big_Boy_4005]

It sounds like Washington has declared war on hobbyists.

[:(][V][:(!]

The war should really be on LOBBYISTS!!![^]

[Anonymous]

I think General Dynamics designed and builds the M1 tank series. I think Chrysler did the previous main battle tank, the M60 series.

There are an awful lot of people in this country with a law degree that wake up each morning thinking of how they can file a new law suit. I just don't think that is a good thing. It feeds the mentality of some that "someone has to pay for my mistake." Liability insurance issues takes away from our freedoms.

And the class action suit situation!?

Jim

[davekelly]

Vssmith,

Yes, I know it is a joke, but unfortunately alot of these type jokes are really based on misperception or lack of the facts.

Yup, corporations have staffs of lawyers onboard who's job it is to protect the company and advise those decision makers. If an attorney says "you know, we can sue those folks for using our designs" the marketing guy can always say "you know, that would really make us look dumb" and the CEO can say "nope - ain't gonna do it." I know lots of folks can blame the lawyers for this, but I don't know very many lawyers over the years who decide on their own to sue someone without their clients directives - in fact that is a way for an attorney to lose his or her license. Do you think that accountants perhaps had something to do with it (after all I think all major corporations have accountants on staff who's job is to determine how to save costs or raise revenues) or the operations people or perhaps the directors or stockholders (most major corporations have stockholders how seem to demand that the bottom line get better so that they can receive dividends or sell their holdings at a higher price)? Yes, its the lawyers job to do the research, but it is the exectutives that make the decision on what to do. I don't think that the researchers who developed various pesticides should be responsible for the holocast instead of the villians that decided to use such agents on human beings, do you? I have never counseled a business client without stating that they should not only look at the legal points of an issue, but also look at the business and non business side also. I believe it is malpractice not to. Bottom line an attorneys job is to counsel the client on the pros and cons of any action. If the client says not to sue or not to write a letter, the suit or letter does not happen.

I agree with you 100 percent that the licensing of models will have a negative affect on our hobby and many others. In today's corporate world, decisions seem to based on the short term - what can be done to increase the bottom line today and the heck about tomorrow (ie: Enron?) in order to make the annual report at the stockholders meeting look good. Given the revenues that these companies have it would seem that the licensing fees would be miniscule (sp?) in comparison. Do you think my idea above would help avoid some of the bad things that might happen as described in your post?

Dave (attorney working for a solution - not adding to the problem).

[vsmith]

QUOTE: Originally posted by davekelly

Hmmmmm. I don't know how it is in the rest of the country, but here in Lubbock, Texas, the client decides whether or not to sue folks, not the lawyer.

Vssmith,

I love lawyer jokes as much as the next person, but there is one thing to keep in mind. You ever watch those shows on TV where a person was wrongly convicted of a crime? I'm pretty sure in most of those cases it is lawyers working hard to ensure justice is served.

As Fogghorn Legghorn says.."Its a Joke son..."

Funny, I always thought that large corporations had lawyers on staff or on contract whos job is to look out for their clients or in this case to look for potential additional sources of income based on the unlicensed use of thier "intellectual property" It their job to do the research that allows stuff like this to occur, hence Yes, I can blame the lawyers...

These license fees are going to have a bad effect across the board on the plastic models industry. Kit manufacturers will either have to fork over their tribute to the alter of corparate greed or they will have to raise prices or go out of business. But raising prices means less people can afford the kits + loss of smaller manufacturers = less kits produced and sold = less product for hobby shops to sell and less profits = less hobby shops eventually. Its not the fact that manufacturers have the right to claim thier logos, or products should be protected, but it dam well becomes an issue when they want the preverbial arm and a leg for the "license" to use their product. they are intentioanally using the fact that as the designer and manufacturer of the F-1234, which happens to be a very popular fighter plane then we're gonna make you pay through both ends for the "right" to produce a plastic model of it. Now that formerly $20 model is now going to be $40 and little Johnny is going to have to move lawn for another few months if he wants even a mediocore version of the F-1234.

This is another stupid move by companies who seam less and less concerned by what the "public" thinks of them .

Anyway that just my 2 cents worth...

[davekelly]

Perhaps there is a solution that would cost the model manufacturer a few cents while at the same time giving the manufacturer of the real thing advertising and good will. For an example - let's take a B-17 model. Instead of a licensing fee, how 'bout the model manufacturer agrees to print and include in the box a "propaganda sheet" submitted by Boeing. This sheet could describe the massive effort of Boeing during WWII to ensure the U.S. and its allies received the equipment needed for the war effort. The sheet could also describe the various technological breakthroughs made by Boeing, give the name of the designers, give credit to subcontractors and, more importantly for Boeing, describe Boeing's continued successes in the area of airplane design and manufacture. The same could be done for Chrysler with regards to the M1A1 tank , EMD with regards to a SD90 model ("EMD set the pace for diesel-electric engines in the 50's and today continues this tradition with blah blah blah - EMD has shown its concern for safety, not only of railroad personnel but the public at large by using the following innovative safety features blah blah blah.") and CSX with anything lettered for it "CSX traces its lineage back to . . . today CSX is the ___ largest rail system in the country, moving ___ tons of freight every year. CSX is committed to safety as shown by its instituting blah blah blah.")

Does anyone think this would work?

[davekelly]

Wayne,

That is good to know. This retailer might have determined that your product is a good one - not likely to induce the public into thinking bad things about the retailer and realizes that the goodwill (and free advertising) might be worth more than any licensing fee. I think it was a good move to contact them - get the communication going so there was no surprises or illwill either way. Who knows - perhaps down the road you may receive free assistance from them. In a way you did receive a license from them - one with out a fee. I beleive that several years ago Chessie did the same with their logo. All they wanted was for model manufacturers to send them a sample of what was being produced. If it was of good quality Chessie would give license for free. I may be remembering it wrong, but that's how I remember reading it in MRR.

Good luck in your venture!!

Bill,

I think it depends on what vehicle is being talked about. Many vehicles (the Jeep and M1 tank comes to mind and I believe a large number of aircraft also) were actually developed by the manufacturers using their own money in an attempt to win a contract.

[Anonymous]

OK< basic idea here. Wern't those military vechicals developed and paid for by the US military? And by extension by us, the tax payer? SO the striker is being treated as intelcual propery, but since You and I paid for it to be developed and build shouldn't it be OUR property? Lawyers.
Bill

[Anonymous]

A new business of mine involves scale models of the product of a major retailer. An inquiry I made regarding use of their company name in connection with my product returned a gracious letter from the Senior Counsel of their intellectual property management department offering no objection to my intended use of their name and wishing me the best of luck with my project.

I submit this to offer a different slant in this unfortunately ill-titled thread.

Wayne

[steveblackledge]

Gold Digging Vultures,
Myles Standish is turning in his grave

[Favrefan04]

Now I have seen it all. Being a military person, I shouldn't be surprised, but I am. I guess greed can rear it's ugly head anywhere.

[davekelly]

rrippergrr,

An interesting point you bring up about the amount of licencing not being very much and what process was used to come to the decision re: licensing. I've seen companies believing a $1000 fee for something or the other as ridiculous and spend $10,000 to fight it. I've seen companies upset by an inventory that showed $2,000 in unaccounted for materials (approximately 1 percent of total material) spend $1000 in overtime to have their folks reinventory only to have the same result and then throw away twice as much on unneeded software.

I guess it comes down to the human element.

[MidlandPacific]

QUOTE: Greed is such a shame in corporate America. I remember when 10% profit for a year was considered acceptable. Now I see multiple earning forcast of 40%-50% operating profit in a lot of corporations. (I guess it's all in the name of increasing stock value for the fat cats up top that own a ton of stock.

)

If you know of any corporation that made 40% last year, could you let me know? I'd love to put some money into it. Greed, economic growth, and cheap imports have improved the quality of model railroading products out of all recognition in my lifetime - so I'm going to hang onto the baby for right now. I'm planning on growth in my 401K to allow me to retire once the Boomers have used up all the Social Security money!

Has anything other than greed ever driven the industry? The Octopus was written about the SP, after all.......

Does anyone have an insider's understanding of how UP made this decision? I'd be surprised if the licensing revenues added up to the revenue of a single carload of freight. There must have been another reason.

best regards,

[Anonymous]

I am glad I built the models a long time ago. They cannot increase the prices on those.

They can stick the ... ahh never mind.