[}:)][;)][;)] If I was the judge in the trademark lawsuit, I would say…yes you are entitled to your royalities…only after you start painting a small percentage of your locomotives in your railroads hertiage paint schemes…use it or lose it.
Trademarks are lost only if they aren’t protected. Use it or lose it does not apply in a matter like this and such a decision would surely be overturned on appeal as a violation of the 5th Amendment.
While I must admit that I don’t particularly agree with charging model railroad manufacturers substantial royalties for use of a various railroad trademarks – I suspect that the amounts involved could be smaller – I do appreciate the motivation: as csshegewisch notes, trademarks have to be protected, and if they aren’t defended (that is, if there is no requirement for a license to use), they can – and sometimes do – become public domain. Since there may be significant value in a trademark, this is not good. Therefore, a company will defend it’s trademarks.
I have friends at one of the HO train makers & they stopped painting the UPRR scheme because of what they had to pay the UPRR for the rights to do so.