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.