Licensing of railroads in "toyland"

The short answer is yes. There have been many potential projects killed in recent years due to licensing issues. These days the railroads are convinced that models sell because their name is on them and therefore are entitled to a cut.

It has not always been this way. Lionel used to be able to get railroads to help cover the cost of tooling back in the 1950's. Most famously both the Santa Fe, New York Central, and General Motors helped offset the cost of the new Lionel F3 models.  Back then Lionel was able to sell the story that the brand recognition that would be generated by Lionel producing a model with their railroad or company on it would offset the cost of what the railroad was paying to Lionel for the privilege. I've seen internal Lionel memos from the late 1940's that Lionel was not only trying to charge companies enough to cover the cost of the tooling but even make a small profit for making the models featuring a company or railroad.

Lionel and the industry as a whole were very different 70 years ago.

Didn't this come up a few years ago with the Union Pacific?  I believe MTH helped work out a win-win deal for the the toy companies and the railroad.

@Bill DeBrooke posted:

Didn't this come up a few years ago with the Union Pacific?  I believe MTH helped work out a win-win deal for the the toy companies and the railroad.

Here's the MTH announcement:

https://mthtrains.com/news/287

And an article in the

Brotherhood Of Locomotive Engineers and Trainmen

Jerry

Whether it would really be trademark infringement to use a railroad's logo on a model (especially a fallen flag's) is highly debatable.

A likelihood of consumer confusion is necessary for trademark infringement. I doubt that people seeing the UP logo on a model train would thing that UP is the source of the model, or is even affiliated with the manufacturer of the model in any way.

I suspect the weakness of the legal case was part of why UP settled.

UP's "brand awareness" claim even over the fallen flag rr's it bought seemed especially weak to me as they wasted no time repainting those fleets to UP armor yellow.

Terry

Those two opinions are very strange.  One does not own their intellectual property(?)  Somehow seems un American.........

...and just the other day on this site someone was wondering if the 'Timken' logo on a truck meant that they made trains.

@Bill DeBrooke posted:

Didn't this come up a few years ago with the Union Pacific?  I believe MTH helped work out a win-win deal for the the toy companies and the railroad.

More like a decade or two ago.

@BwanaBob posted:

I was curious if railroads play hardball with respect to licensing their names for toy manufacture.  If so, was it always this way?  Is this why we don't see sets made of certain flags?  Or is it strictly belief that there is no market for those railroads?

More likely there's little to no market for certain roadnames or some of the lesser know roads previously had poor sales.

Rusty

I wonder what kind of deals get cut for road names by the various manufacturers? Lionel has a pretty good assortment of Strasburg RR items but outside of the mid-atlantic region can there really be a big demand for Strasburg trains or does Strasburg see it as free PR? Given the large number of roads available out there I really doubt everyone negotiates a deal for their name, there must be some blanket thing that allows companys to use the names or possibly a form letter/contract they just use as a formality. Might be an interesting question to ask one of the Lionel or whoever reps at York about how that works, kind of give us an insight to the process.

Jerry

I would imagine that's privileged information when it comes to terms regarding licensing deals - each trademark/brand owner is probably different.

Like Derek said - years ago the the world was much different - it was sort of an an honor for your train, car, truck or whatever to be replicated as a toy. Now, it all about monetizing the brand, or 'value-added' awareness.

That whole trademark fiasco turned me against UP. How petty could they be?

And I love the color scheme too, but no UP for my railroad.

@Professor Chaos posted:

Whether it would really be trademark infringement to use a railroad's logo on a model (especially a fallen flag's) is highly debatable.

A likelihood of consumer confusion is necessary for trademark infringement. I doubt that people seeing the UP logo on a model train would thing that UP is the source of the model, or is even affiliated with the manufacturer of the model in any way.

I suspect the weakness of the legal case was part of why UP settled.

You’re assuming that UP limited its trademark holdings to classes and subclasses related to railroad services. Large companies routinely file their marks in many classes and subclasses (e.g., sportswear, novelty items, etc) for this exact type of thing. I would also find it reasonable for a consumer to assume a railroad could indeed be the source of a model its locomotives in the same way car companies sell models of their products.

Keep in mind, a model, by definition, is intended to be a literal knockoff of the prototype - albeit smaller. So, the whole point is to closely mimic the famous brand (in this case UP) thereby running it squarely afoul of anti-dilution laws.

I think UP found a business solution to a suit that would cost more than it was worth, but I doubt they feared losing a case that involved a third party’s literal knock off of their brand. Under trademark law, a mark owner has an obligation to police its marks, so they had to confront the unauthorized use of their mark.

@RoyBoy posted:

That whole trademark fiasco turned me against UP. How petty could they be?

And I love the color scheme, too but no UP for my railroad.

They had a legal obligation to police their marks under trademark law or risk having them rendered unenforceable against other infringers. They weren’t being petty, they were protecting their valuable assets. I’d bet the licensing fee to the model makers is fairly modest.

@Bill DeBrooke posted:

Those two opinions are very strange.  One does not own their intellectual property.  Somehow seems un American........

Intellectual property rights exist, as Thomas Jefferson wrote, not because anyone has a natural right to the exclusive use of ideas or words, but because we believe society as a whole is better off when creators are granted certain exclusive rights in their creations.  (Today we'd call Jefferson a "radical left wing socialist").

In the case of trademarks, limited exclusive rights are granted in a symbol to ensure that consumers get what they expect when they see products or services associated with that symbol. When you buy a can of soda with the "Coca-Cola" symbol on it, then Coca-Cola's exclusive right to use that symbol ensures that you're getting what you expect from Coca Cola, and provides an incentive for Coca Cola to maintain consistent standards of quality.

There is a clear public interest in prohibiting a competing railroad from offering transportation services using a symbol like "Union Pacific" without permission.  I think prohibiting the use of a symbol on a model train, particularly a symbol associated with a road that has not existed for decades, is much harder to justify.

In any case, I'm sure Rusty is right that it's all about market demand for particular roads, not licensing restrictions.

@Bill DeBrooke posted:

One does not own their intellectual property.  Somehow seems un American.........

One absolutely can own their intellectual property through several bodies of law - patent, trademarks, trade dress, copyrights, etc.

The foundations of patent law and copyright law (and by extension, trademark law) are expressly provided for in the Constitution - it’s anything but unAmerican!  It’s been there since Day One!

@Rusty Traque posted:

More like a decade or two ago.

More likely there's little to no market for certain roadnames or some of the lesser know roads previously had poor sales.

Rusty

At my age, a decade or two is a few.

@Rider Sandman posted:

One absolutely can own their intellectual property through several bodies of law - patent, trademarks, trade dress, copyrights, etc.

The foundations of patent law and copyright law (and by extension, trademark law) are expressly provided for in the Constitution - it’s anything but unAmerican!  It’s been there since Day One!

Perhaps I should have put a question mark after my statement.  I implied that one obviously owns their property, intellectual or otherwise.

Hmmmm..   this leaves me wondering about Flyer and the Marx #21 ATSF models....did they kick in to the railroads.....(l doubt it).  Sounds like model rolling stock should all be delivered unlettered, with decals available. Which brings to mind. ..railroads going after decal makers?

...

Yes, they do, as others have pointed out. However its a complete and total boondoggle.  

If I paint a picture of a locomotive or boxcar - or I take a photo - and sell 50 million copies, the railroad is entitled to nothing.

These are models, and therefore works of art.  The manufacturers should band together and tell the railroads to go pound sand.

Considering how little exposure our hobby gets I think many americans believe "Lionel Lines" is a fallen flag.

@Professor Chaos posted:

Intellectual property rights exist, as Thomas Jefferson wrote, not because anyone has a natural right to the exclusive use of ideas or words, but because we believe society as a whole is better off when creators are granted certain exclusive rights in their creations.  (Today we'd call Jefferson a "radical left wing socialist").

In the case of trademarks, limited exclusive rights are granted in a symbol to ensure that consumers get what they expect when they see products or services associated with that symbol. When you buy a can of soda with the "Coca-Cola" symbol on it, then Coca-Cola's exclusive right to use that symbol ensures that you're getting what you expect from Coca Cola, and provides an incentive for Coca Cola to maintain consistent standards of quality.

There is a clear public interest in prohibiting a competing railroad from offering transportation services using a symbol like "Union Pacific" without permission.  I think prohibiting the use of a symbol on a model train, particularly a symbol associated with a road that has not existed for decades, is much harder to justify.

In any case, I'm sure Rusty is right that it's all about market demand for particular roads, not licensing restrictions.

Wow, never thought I’d hear a discussion about natural rights on this forum. As a former poli sci major and Econ minor, these discussions are up my alley. From a utilitarian view, the copyright/trademark is likely necessary for incentive for producers of intellectual or non physical property. From a more natural law purist perspective (I think there is a professor Kinsella that writes from this point of view), the government should not exert its will to “create” property rights that are impossible to enforce without the might and force of the government. To my understanding, the argument is that IP is both immoral and can slow down creation of new ideas inventions ideas etc. I think this is what Jefferson meant when he said that they should be protected (through govt force for a limited time). for the good of the public. I actually have no super strong opinion on the morality or utility of IP law as I don’t think I’ve devoted enough time to provide more than a little background.

Come to think of it, a similar situation arose with regards to "honoring" people on a US postage stamp.  It used to be an honor - period.  Now IP owners of passed-on actors/actresses demand a cut if their artist is to be "honored".  Even the Olympics exacts a cut if you want to "honor" them on stamps.   Some years the honorarium must be lower than others because we still do see a US Olympic Stamp occasionally. 

@rplst8 posted:

Yes, they do, as others have pointed out. However its a complete and total boondoggle.  

If I paint a picture of a locomotive or boxcar - or I take a photo - and sell 50 million copies, the railroad is entitled to nothing.

These are models, and therefore works of art.  The manufacturers should band together and tell the railroads to go pound sand.

It’s true that fair use provisions of the law would allow for you to paint or photograph an image of a trademarked product in certain circumstances - e.g., a real life scene or even parody. But, if you’re using the logo just to add value, it would not be fair use (think of a set of tracks leading off into the sunrise and you put UP or ATSF’s logo on it to make it sell to fans). Also, even if you painted a scene under fair use, it wouldn’t give you the right to sell a million copies in all formats (e.g., shirts and hats). It’s admittedly a fine line, but, as a general rule, if you are profiting from someone else’s brand without their permission, you should pause and think it through. The law generally favors those who spent millions (or billions) in building the brand as opposed to those who didn’t, but are trying to profit from it.

As to whether or not a mass produced, functional toy is a “work of art” is not germane to whether its manufacture would infringe the rights of others.  Manufactures make model locomotives using the railroad’s trademarks, trade dress, and in some cases copyrights, for the sole purpose of selling the models to fans of those railroads. As noted above, it’s very unlikely that would qualify under fair use in any way.  

@rplst8 posted:

Yes, they do, as others have pointed out. However its a complete and total boondoggle.  

If I paint a picture of a locomotive or boxcar - or I take a photo - and sell 50 million copies, the railroad is entitled to nothing.

These are models, and therefore works of art.  The manufacturers should band together and tell the railroads to go pound sand.

Try and sell 50 million copies of something labeled "Lionel Lines" without a license and see how far that gets you...

Rusty

@BwanaBob posted:

Is this why we don't see sets made of certain flags?  Or is it strictly belief that there is no market for those railroads?

Back to the original question, just curious, which railroads/fallen flags are you referring to Bob?

After thinking about what has "not" been at least offered in the past 20 years or so, I can't think of one railroad. Yes, there are some really obscure lines "Chicago, Danville and Vincennes Railroad" as an example, but I think that would fall into the low or no demand part of your question.

Charlie

It's things like no LIRR offered by Menards when it's (to me) clearly a popular roadname.  So I presume LIRR is playing hardball with Menards.  Conversely, I like the short line New York & Atlantic, of which there is not a lot offered, so I presume it's not due to licensing but that it is just not that popular.  I really wasn't too interested/concerned about a lack of fallen flags, though I would have thought the descendant/buyer of those lines wouldn't care too much but I'm clearly wrong about that.

@Rusty Traque posted:

Try and sell 50 million copies of something labeled "Lionel Lines" without a license and see how far that gets you...

Rusty

That's a totally different situation and not at all what I proposed.

@Rider Sandman posted:

It’s true that fair use provisions of the law would allow for you to paint or photograph an image of a trademarked product in certain circumstances - e.g., a real life scene or even parody. But, if you’re using the logo just to add value, it would not be fair use (think of a set of tracks leading off into the sunrise and you put UP or ATSF’s logo on it to make it sell to fans). Also, even if you painted a scene under fair use, it wouldn’t give you the right to sell a million copies in all formats (e.g., shirts and hats). It’s admittedly a fine line, but, as a general rule, if you are profiting from someone else’s brand without their permission, you should pause and think it through. The law generally favors those who spent millions (or billions) in building the brand as opposed to those who didn’t, but are trying to profit from it.

The law has moved some since the MTH and UP settlement.  In one case, a court found that First Amendment rights in creative works trump trademark protection claims.  Not only that, but they said that 1A rights totally outweigh any "confusion" claims WRT to a creative work that contains a trademark seemingly being "endorsed" by the trademark owner.

https://www.techdirt.com/artic...irst-amendment.shtml

As to whether or not a mass produced, functional toy is a “work of art” is not germane to whether its manufacture would infringe the rights of others.  Manufactures make model locomotives using the railroad’s trademarks, trade dress, and in some cases copyrights, for the sole purpose of selling the models to fans of those railroads. As noted above, it’s very unlikely that would qualify under fair use in any way.  

In the example above the reproduction and merchandising of the artwork is still undecided as the defendant chose to waive his 1A rights for that part of their argument, and that still will need to be tested in court.  That said, who's to say that I buy models of the UP because I'm a fan of the UP, and not a fan of the work the modeler working for Lionel, Atlas, or MTH did.  Even if it were the case I was buying them as a fan of the UP, the work of scaling down of the locomotive or car, changes to allow compatibility to run on tighter curves, and yes, even the resizing of a logo to 1:48 proportions are transformative in my view.  You cannot (as the court found in the case above) make an accurate artistic interpretation without the trademark.

While it's understood that this view may not be the current state of the law and that the model companies might not be willing to pay the lawyers to test this, UP's (and others who go after legitimate artistical works) efforts are really a waste of the court's time and an example of the overreach of big business into people's civil rights.

There exists a principle called the Reasonable Man Standard, and in this case with model trains not even an child let alone a reasonable man could conflate the transportation services that a railroad supplies with the models that MTH, Atlas et. al. create and sell.

Finally, a caveat - none of this applies to Lionel's merchandising efforts of Thomas the Tank Engine, Harry Potter, Disney, etc.  Those are clearly a case where there exists no real item to be a "prototype" for a scale reproduction or model.  They have sought out those companies in a effort to rally interest around the creative works they made and share in the profits by offering something that appeals to a new market - toy train collectors.

P.S. - to the OP @BwanaBob, great topic!

RPL, the case you cited makes my point: an artistic expression of real life can be fair use, but merchandising it remains problematic if it meaningfully relies on the intellectual property of others. I’ve practiced IP law for over 25 years and I can assure you the movement in the law is definitely in the favor of the brand owner not the appropriator.

At the end of the day, whether one is making models or t-shirts or whatever, if you leverage someone else’s intellectual property for your own monetary gain, it’s problematic with limited exceptions.

The whole point of the anti-dilution statues is to prevent this very type of whittling away of a brand holders rights irrespective of whether there is likelihood of confusion or not. It makes no difference if you think the product was sourced from the mark holder under these statutes  

One final point, you argue that a functional toy is a work of art.  Works of art cover its aesthetic appearance, not its function. So, under your line of reasoning, wouldn’t the aesthetic appearance of the 1:1 prototype also be a work of art?  I think we could both agree that one cannot take another’s work of art (photo, painting, sculpture, etc) and copy it without recourse, right?  You can’t take a Warhol and sell copies of it even if you shrunk it down from its original size, right?

At the end of the day, there are precious few ways to leverage someone else’s property without their permission and it’s only made more difficult the more recognizable and powerful the brand in question is.

All well and good legalwise, but the great irony is that all those brand items do provide a form of FREE advertising of their products.

@Tinplate Art posted:

All well and good legalwise, but the great irony is that all those brand items do provide a form of FREE advertising of their products.

I'd like to see one person say, "I bought a model train with XYZ railroad on it and because of that train I decided to use railroad XYZ to ship my product."  I highly doubt that's going to happen. Yes PR is important but no way making model trains has increased business to that railroad.

Nothing here is going to change whatever agreements there are for licensing between railroads and model train companies.   If a train company wants to produce something for XY&Z RR and a fee is required, they will pay the fee.  Or in some cases, it may just simply be a written permission.

Either way, the model train company is under no obligation to disclose the terms of the license with its customers.

Rusty

My statement above was a generic one meant to include ALL brand name merchandise, NOT just model trains. Most of those T Shirts and mugs are in effect a form of subconscious advertising, for which the consumer has paid the price.

@Notch 6 posted:

I'd like to see one person say, "I bought a model train with XYZ railroad on it and because of that train I decided to use railroad XYZ to ship my product."  I highly doubt that's going to happen. Yes PR is important but no way making model trains has increased business to that railroad.

It can be argued that "free advertising" benefited the railroads to a certain degree up until the late 1950s when passenger service was still king and railroads still captured America's imagination.  Nowadays, any benefit of free advertising would apply to Amtrak at most as they are for all intents and purposes the last man standing when providing nationwide rail travel, and any perceived advertising benefits gained from model trains for them is a bit stretch, IMO.

I think it's delusional/wishful thinking to imply that any appreciable share of people playing or modelling trains will as a consequence have any motivation to, or otherwise are in any position of performing, any direct business with the railroads they model.  The very essence of advertising is to draw people to use your goods and services.  In this case, model train manufacturers are using the prototype roads' logos, names, etc. to draw customers to their own goods, most certainly not the railroads themselves by contemporary standards.

Hardly anyone born after the baby boomer era sees America's railroads with the same level of interest or imagination as that generation and before.  More likely they simply see it as just another part of the metro and rural background (or perhaps "background noise" in some cases).  But definitely not something standing at the forefront.  Whatever more direct exposure to trains the post-baby boomer generations get apart from commuter trains (thought of as just another transportation utility along the same lines as taking a bus or cab) would also be at grade crossings, and even then they most likely regard grade crossings with indifference at best, an annoyance/inconvenience at worst, rather than a cool experience in watching trains rolling by the gates.

@Rusty Traque posted:

Nothing here is going to change whatever agreements there are for licensing between railroads and model train companies.   If a train company wants to produce something for XY&Z RR and a fee is required, they will pay the fee.  Or in some cases, it may just simply be a written permission.

100% agree. The licenses may very well be royalty-free.  But, importantly, they still include quality control provisions of how the brand can be used (or importantly not used) in the model. To tie a couple recent forum subjects together, UP’s license may not allow a model of its locomotive with “Trump 2024” or “Biden 2020” on it. The license may prohibit vulgar graffiti, etc. In other words, even if there is no money changing hands, the mark holder is controlling the licensee’s use of its property.  

@Rider Sandman posted:

RPL, the case you cited makes my point: an artistic expression of real life can be fair use, but merchandising it remains problematic if it meaningfully relies on the intellectual property of others. I’ve practiced IP law for over 25 years and I can assure you the movement in the law is definitely in the favor of the brand owner not the appropriator.

I think the case I cited makes the point that the merchandising argument still need to be litigated when using copyright of the artwork itself as a defense.  The court basically said a summary judgement is not enough here.

There still exists a 1A argument too, say - I make a work of art that depicts BP in a bad way for the Horizon oil rig disaster.  Then I put that painting (that I made) onto t-shirts and sell it.  There is an argument to be made that BP doesn't get to decide how their trademark is used there because the art makes a 1A statement about say, BPs negligence in the matter, and that by merchandising it, I'm "speaking" to the people about the atrocities committed.

At the end of the day, whether one is making models or t-shirts or whatever, if you leverage someone else’s intellectual property for your own monetary gain, it’s problematic with limited exceptions.

The whole point of the anti-dilution statues is to prevent this very type of whittling away of a brand holders rights irrespective of whether there is likelihood of confusion or not. It makes no difference if you think the product was sourced from the mark holder under these statutes  

One final point, you argue that a functional toy is a work of art.  Works of art cover its aesthetic appearance, not its function. So, under your line of reasoning, wouldn’t the aesthetic appearance of the 1:1 prototype also be a work of art?  I think we could both agree that one cannot take another’s work of art (photo, painting, sculpture, etc) and copy it without recourse, right?

This presumes that the function of the model is A) what I'm buying - or what was intended by the artist and that B) it serves the same function as the original.  While the former is debatable, I don't think anyone can say with a straight face that the purpose of a railroad locomotive is the same purpose of a model of that locomotive.

You can’t take a Warhol and sell copies of it even if you shrunk it down from its original size, right?

I'd argue that in that case you aren't transforming the art in any way meaningful - the function is the same - it's another piece of art.  This falls clearly under copyright and not trademark any case.  I don't think artists typically trademark their paintings.  Interesting you mention Warhol as he made art out of the Campbell's soup logo and they loved him for it. 

At the end of the day, there are precious few ways to leverage someone else’s property without their permission and it’s only made more difficult the more recognizable and powerful the brand in question is.

While that may be the case currently, I think the state of things is a corruption of the original intent of trademark protection.  Granting the ownership rights under the law has an OBVIOUS benefit in that I can't make counterfeit goods slap someone's logo on it and sell as the original item.  However, that should be the limit of the protection WRT modeling and art.  None of the model railroad companies are using the trademark to fool people or dilute the brands.  Their not even making them look bad!  All of this model railroading is in the interests of the railroads.

Now an interesting case does exist (IMHO) with the Wheeling and Lake Erie.  UP (I think) is the ultimate owner of the IP for the DRGW, of which the WLE is using the speed lettering style and color scheme.  I know the former owner/manager/CEO whatever moved there, but did he have any personal ownership of those styles?

RPL, I think we are talking in circles. As it relates to a work of art, its function is, by definition, irrelevant. All that matters is its aesthetic appearance. Copyrights - which cover works of art -  protect the expression of an idea, not the idea itself.

During the Atlas beer reefer boom, and this would apply to any product in similar circumstances, an HO modeler had made a quantity of reefers with a large city's "long defunct" brewery beer brand/logo on it. He got raided by the Feds because a megabrewery had bought and owned all the rights to that brewery and brand.  Atlas has never offered, l don't think, that owned beer logoed reefer, probably due to this problem.  Reefers with the megabrewery  logo have been done.  This means legal research probably goes into the cost of an Atlas reefer.              A smalltown brewery, with once wide sales, but now defunct, which never owned logoed reefers, in that same state, had imaginary G scale reefers produced by someone who claimed to own the rights.  An attempt begun to make HO reefers with that logo, by someone else, unaware, as in the first instance, that the rights were owned, was curtailed.                      I consider these actions heavy-handed, and since sitting in a marketing class where a prof described a common situation involving a "pop, soda, soft drink", l have avoided that pop brand for decades.  So there is a good will trade-off

@BwanaBob posted:

It's things like no LIRR offered by Menards when it's (to me) clearly a popular roadname.  So I presume LIRR is playing hardball with Menards.  Conversely, I like the short line New York & Atlantic, of which there is not a lot offered, so I presume it's not due to licensing but that it is just not that popular.  I really wasn't too interested/concerned about a lack of fallen flags, though I would have thought the descendant/buyer of those lines wouldn't care too much but I'm clearly wrong about that.

The explanation is less sinister.  Look at a map of Menards locations.  Find Long Island on a map.  Mix in a little midwestern disdain for things New York.

@colorado hirailer posted:

During the Atlas beer reefer boom, and this would apply to any product in similar circumstances, an HO modeler had made a quantity of reefers with a large city's "long defunct" brewery beer brand/logo on it. He got raided by the Feds because a megabrewery had bought and owned all the rights to that brewery and brand.

That is totally nuts!  Was he selling the models he made on the open market?

A smalltown brewery, with once wide sales, but now defunct, which never owned logoed reefers, in that same state, had imaginary G scale reefers produced by someone who claimed to own the rights.  An attempt begun to make HO reefers with that logo, by someone else, unaware, as in the first instance, that the rights were owned, was curtailed.

The issue here is a tad stickier since a prototype never existed, but wow - what an overreach.