Athearn/UP Lawsuit update!

Model Railroader General Discussion (Model Railroader)
1

Just got this in an e-mail:

FOR IMMEDIATE RELEASE

Champaign, IL ­
Horizon Hobby, Inc. is pleased to announce it has signed a multi-year
licensing agreement with Union Pacific for Athearn Trains. UP has
further withdrawn the complaint it filed against Athearn in U.S. district
court.

Tim Geddes, president of the Athearn division, stated, "Formalizing our
relationship with UP is the first step in what is sure to be a long and
productive relationship. We know that UP road names are critical to
many modelers and are pleased we will be able to continue providing
high-quality.

That’s it for today.

The Folks at Athearn

2

Would be nice to know how much is Horizon/Athearn paying the UP for licensing? How much of a percetage would it affect models bearing the UP logo?

Hopefully if it’s not high, Athearn “might” be willing to absorb the cost.

3

I have mixed feelings about this. I suppose in the long run it is cheaper to sign than to fight. I would have like to have heard what the court would have said about the fallen flags and the fact that UP waited so long to take action.

Oh well, one down, one to go. I don’t expect it to take long for Lionel to cave, given this announcement.

4

yeah, the little old model railroad community has just been given a crash course in 21st century business practice. I believe the “good old days” of railroad and railroad model maker are officially over.

5

FYI: Not only Athearn complied: I found this statement on the Atlas website:

FOR IMMEDIATE RELEASE

THE ATLAS COMPANIES SIGN LICENSING AGREEMENT
WITH UNION PACIFIC

Hillside, NJ—September, 2004—Atlas Model Railroad Company, Inc. and Atlas O, LLC announced today that they have signed a licensing agreement with Union Pacific Corporation, located in Omaha, Nebraska, to license their corporate trademarks for the production of model railroad products.

“This agreement launches a new relationship between the Atlas companies and Union Pacific—a significant step forward that allows for cooperation while preserving company brand identity,” said *** Maddox, CEO. "We are pleased to report that we were able to negotiate a positive agreement with Union Pacific.”

The agreement includes trademarks on the current Union Pacific brand in addition to the historic railroads that comprise the modern Union Pacific.

This agreement will be of significant benefit to both Atlas and Union Pacific helping to preserve the quality and historical accuracy of the marks used on the production of HO, N and O scale model railroad products for consumers who seek museum quality models.
The Atlas companies have also recently signed a licensing agreement with railroad company, CSX, located in Jacksonville, Florida.

Founded in 1949 from the original Atlas Tool Co., Atlas Model Railroad Company, Inc. has its roots in model railroad track and accessory making through invention, innovation and ingenuity. As an extension of a tremendously flourishing HO & N scale product line, Atlas O, LLC. was created in 1997 to provide high quality model railroad O scale products to the 3-rail and 2-rail markets. Today, after more than 50 years, the Atlas companies are leading manufacturers of HO, N and O scale track, locomotives, rolling stock and accessories for the model railroad industry. Atlas’ product line is very extensive and includes solid nickel silve

6

Thanks Lupo. As far as I knew Atlas wasn’t even a named defendant in this case. UP had only chosen to go after the biggest, Athearn and Lionel. Dominoes anyone? And no, I don’t mean pizza.[swg]

7

I assume Athearn UP models will now go up in price like those of other firms. We’re the ones paying for this deal. Well, not me as I don’t have any need for UP equipment.

Bob Boudreau

8

It is good to hear that this has been sorted out. Most if not all the model RR companies have been making offically licenced products of some kind for years. John Deere, Ford, Coke etc. so it should not have been a shock to the companies. Does anyone know if the model makers have to pay GE to reproduce their designs? Anyway, a cloud has been lifted and we can get back to model RRing

9

My God what a HELL of a CHANGE!

10

Get use to it Guys…The CSX already has a licensing agreement that means the other roads will follow suit.The question is who’s next BNSF? NS? KCS? CP? CN? Then no doubt the short lines will join in.[8]

11

That takes care of the UP bashing…hopefully.

12

As far as I know, that already took place. A lot of manufactuers have UP models $5.00 more than the same models with other road names

13

I can hardly wait for the major television networks to announce they’re paying McDonalds and Coca-Cola to show their commercials…

14

I still don’t think that is coming from the manufacturers. I think that is some retailer’s response to all of the comotion. It’s called gouging.[B)][:(][:0][:(!][V]

15

From what I’ve read about Edward H. Harriman, who took UP from the laughing-stock of the railroad world early in the 20th century and turned it into a first class carrier, he’s probably rolling in his grave right now and saying “What the Hell is WRONG with you people in Omaha, lately?” My answer? “Well, Eddie boy–LOTS!”

16

Other than the license fee, the other costs involve keeping track of what UP labeled products the sell and filing a report a couple times a year with the UP to document production. Now for a small company that might be a problem, but for big companies (that are raising prices) that shouldn’t be a big deal. They already know within a couple dozen the number of UP s they will produce and identify each one (that item number in the catalogs). It should take somebody about 15 minutes to generate a report of what they have produced. When your dealer orders a from them they can tell within a matter of minutes whether they have that road name in stock, they can do the same thing for the UP license. Bigger companies also have a CPA audit their books anyway for tax purposes. So producing an audited statement shouldn’t be that hard either.

So if they are charging $5 extra, how much of that is actual license and actual expense and how much is " off pass on". At the 3% license fee that means that the wholesale price (NOT retail) based on a $5 surcharge would be $166. If the item cost $100 wholesale (NOT retail) the license fee would be $3.00. If they are charging you $5 extra then the manufacturer it charging you $2 per run a query on his computer and fill out a form twice a year.

Dave H.

17

If you hate what Union Pacific is doing tell them so here. Not sure if it’s the complant dept but they’ll froward it on if enough people respond.

http://www.uprr.com/info/feedback.shtml

18

I am still waiting to see what happens to Kadee as they refuse to do any roadname that they have to pay for licensing.