Union Pacific arrogance

Discussion in 'Getting Started' started by Gary Pfeil, Jul 28, 2003.

  1. Gary Pfeil

    Gary Pfeil Active Member

    I just read a very disturbing commentary in the August issue of Mainline Modeler. I had not heard anything about this previously, I wonder if any of you have. It seems that UP lawyers have identified an easy source of income, they are demanding a royalty of 3% of the wholesale price of any product bearing their, and their predecessor, logos. This includes SP, WP, MKT, RG, T&P, MP and C&NW. Also, UP can cancel the contract at any time, and tooling would become UP property! The article states a few model companies have signed the agreement. Expect prices to go up. At least one company is beginning legal action against it. Apparently the fallen flag logos can be considered abandoned under the law.

    The article states that some modelers who influence shipping decisions are using BNSF or trucks, and letting UP know why. Others are buying UP stock with the intent of attending the next annual meeting and turning it into a PR nightmare. Legal challenges may be able to count on politicians who would have nothing to lose going against UP.

    The article also provides a name and address for the CEO of UP. It may be pointless but why don't we all write him to ask him to abandon this idea? If UP gets away with it you can bet the other roads will do the same.

    Dick Davidson, CEO
    Union Pacific Railroad
    1416 Dodge Street
    Omaha, NE. 68179

    One more thought, it might be nice if we let the hobby mags know we'd like to see all UP related articles replaced with BNSF or other articles until such time the issue is resolved.

    If anybody out there knows more currant news on this, please let me know.
  2. Catt

    Catt Guest

    UP's hotshot lawyers apparently overlooked that part of the copyright laws that says if you don't use it you lose it.

    In other words if you are not currently using the logo and haven't been for I believe its 3 years you have no claim on it.
  3. spitfire

    spitfire Active Member

    Lousy Robber Barons!!!! Oops what am I saying?

    Gary, don't Ford and GM also charge licensing fees to model mfrs who make their cars? I'm not condoning what UP is doing by any means, I'm just curious. And I also wonder how the 3-year rule regarding logos applies to tooling issues? For example, a 1953 vehicle if no longer made is no longer copyright?

    Anyway, yeah, let's do whatever we can to nip this little brainwave in the bud! I'm sick of all this corporate crap, including all the fuss over music on the net. I once saw an ad in a magazine that had a toll-free number you could call to report unlicensed use of Disney characters. The phone number was 1-800-DISNEYCOP. Yeah, let's all spy on our neighbours and report them to the authorities - kinda like in Nazi Germany. Mickey Maus would be pleased.

  4. brakie

    brakie Active Member

    Sorry Gary,Those logos is a trade mark that is copied righted and owned by the UP..It is theirs to do as they wish..

    Ford,Chevy,Nascar,Pesico,Coke Cola and many other brands charge a license fee to use their name or logo...

    Catt! Just as long as there are freight cars still carrying those falling flags road names they are still in use..Have you notice the UP boxcars sub lettered for the SP? The CHHT? C&NW? See what I mean?

    The real question is what railroad will be the next one to step up to the plate and start changing a license fee to use their logo?

    Val,Big Brother has been spying on us for years more so now then ever before..
  5. BillB

    BillB Guest

    Why pick on UP?

    The author of that mag is either uninformed or just trying to stir up trouble (as per Rush L) - and maybe readership? Works for all the radio talk show hosts (and now the cable TV ones) who speak without facts!

    Why not complain about the CURRENT fees on Athearn's Coke, John Deere and AMTRAK (yes, another RR was doing this before UP!) products?

    Or maybe UP should act like McDonalds and just say "No!" to all logo products? Do you REALLY think it would hurt UP's profit line if NO UP model trains or rolling stock were made?

    The fact is, UP legally owns their locos, as much as any other US company. They have a right to see that it is used correctly. They aren't doing this for the profits (a drop in the bucket compaired with their hauls), but they also must pay the salary, benifits, retirement, etc. of the folk they have hired to check the products - and that's ALL products (t-shirts, signs, etc), not just model trains!

    As far as "fallen flags" go, yes they own them, too.

    Who do you think ownes the ROCK ISLAND logo? MAYTAG! And they enforce that right (as some folk in MO found out when they wanted to create a "new" RI railroad in that state! Maytag shut them down very quickly!

    And don't think UP stockholders would respond, either. They would rather protect their investment than save the MRR hobby a buck or two on a model train!

    UP has the LEGAL right to ensure their loco is used correctly, and is under no obligation to pay for it themselves. Other companies are already doing the same thing, it was just a matter of time before UP joined in.

    So lighten up - the fee is small compaired with the price increases we have seen already in this hobby!
  6. Gary Pfeil

    Gary Pfeil Active Member

    Hey guys, please don't misunderstand me, I wasn't saying that UP doesn't have the right to charge royalties to use their trademark, or even questioning that they ought to have that right. 10-15 years ago you couldn't buy a model UPS truck because they wouldn't let their logo be used. They've been available for awhile now, I suppose someone finally agreed to pay the fee. No, I don't question their right to do so, but was relaying my dismay that they've chosen to do so, I was not aware of Amtrak having done so already but believe that no other roads had ever done so, presumably preferring the good will and whatever value having their names displayed publicly gave them. It's possible they just never thought of it! The thought behind their right to exclusive use of their logos is to protect its integrity and prevent use of it which may be detrimental to the company. I left that article at work so don't have it handy to refer to. I admit it is my sole source of data, right or wrong. I have no legal knowledge but to add to Catt's remarks and brakie's response, the atricle does state that UP has applied to the government to reinstate their rights to the fallen flag logos. They did so 6 months ago. They were quite aware they needed to do so to charge the royalty fees! They have no intention of using these in their operations. The article mentioned they went out of their way to quickly eliminate all those logos and let people know they were now dealing with UP. This I suppose is the basis of the legal challenge mentioned. I believe it was CSX which was mentioned as haviing stated they felt it was not necassary to charge fees in order to protect theit trademark. And Wisconsin Central does require potential mfgs to get their authorization and states there is a charge but, according to the article, doesn't pursue getting the payments. At any rate, all I was trying to say was I'm in favor of anything that will dissuade UP from pursuing the idea. I'm under no illusion that we have any power to do so, but public image is still important to corporations, and anything that we can do to take advantage of that will be to our benefit.

  7. shaygetz

    shaygetz Active Member

    CSX tried this some years back. From the PR fallout, they eventually said they were only looking to protect how their logo is used and so now official corporate approval must come first before it can be used on models. Most other companies have followed suit. Nascar has said payup and UPS refuses to allow their's to be used at all (hence the lack of HO Nascar and all the decal kits with "United Shipping Service" and "Allied Parcel Service" made together and in a type remarkably similar to UPS's print). Yes, a logo's use should be protected and even a small licensing fee is not unreasonable. However, if it effects the price of an item markedly then they can, quite frankly, pack sand. I've enjoyed this hobby for 30+ years on a budget that would starve a flea. Corporations seeking to profit off of me will only drive me deeper into those wonderful flea market and yard sale boxlots of stuff already bearing their precious logo and for pennies, even mils, on the dollar. It's likely that I'll be too busy kitbashing and having my usual grand ol' time to hear the crash when it comes.
  8. BillB

    BillB Guest

    The claim that UP will make a "profit" on this fee has yet to be proved - no one knows what it costs UP to have a logo approval section. Our facts are missing to make a judgement here! As I said before, they will have to HIRE and PAY people to inspect and approve those logo items! However, given their profits from hauling, I doubt that any potential profit from their 3% fee on MRR models would greatly affect their "bottom line".

    BTW I don't consider $3 on a $100 loco "markedly" increasing the price. Just adding a decoder to a loco adds $30, or 10X as much! And recent new models (especially by P2K) have gone up much more than $3 lately WITHOUT any fee being involved!

    From comments on other forums I've seen, the price per item may actually be much smaller. But again, I don't have the actual facts of this, so don't know if that is true.

    "Don't go off half-cocked" - refers to a muzzleloading flint lock, where the rifle will not fire when the lock is in the half cocked position. Or having a discussion in the absence of facts......

    Anyhoo ... just think of it as supporting one of your favorite roads!

    OR that if UP has approved it, the markings on your model MUST be correct (a fee for a "quality check" of the model)!
  9. 60103

    60103 Pooh Bah

    I commented on this in the Kalmbach forums last week.
    About 1950, Lionel managed to convince NYC, ATSF and GM to pay half each for the costs of producing their new F3. I think they also managed to get Sunoco to pay for having their name on all the tank cars.
    Athearn's new Bombardier commuter cars were held up for about 2 years while BBD approved them.
    I would really object if the models had to have (c) or (TM) on them that wasn't on the prototype. I think that was in Chessie's proposal.
  10. pcentral

    pcentral Member

    All of this is old news to me. I heard about this a few years back, only it wasn't just the UP. BNSF was also planning to add the license fees. As was stated at the time, they are trying to protect their image and logos. Think of it this way, if you owned a business would you like someone making a product with your logo on it without your approval? What if the product is faulty, cheaply made or even against your moral beliefs. It has your logo on it but you have no say on how or what is produced.
    I have been into Lionel trains all my life and these fees are a normal part of it. O gauge trains regularly are sold under the brand names of Coca Cola, McDonalds, Cambells Soup, Hersheys, John Deere, Disney, Warner Bros. and the list goes on......
    I think this is a normal part of life and while you may not like it, it is something big companies have to do to protect their image.

Share This Page