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To: pabianice

By John Noack
IPMS/USA 1st Vice President

Dear IPMS members
(and guests to the website):

There has been a lot of traffic lately regarding the licensing issue and how it has affected model manufacturers' costs to bring a new kit to the buying public. If you're not familiar with the issue, companies that produce the actual aircraft, auto, armor and other "1/1" vehicles are starting to ramp up their demand for royalties from those who create replicas, images, or otherwise recreate the original product in scale. Perhaps the most aggressive of these have been the auto manufacturers; model and decal companies now face legal action if they don't request (and pay for) a license to create and sell, for example, a Ford Mustang model. Model railroad companies have faced this situation for years, and regularly pay royalties and/or licensing fees to the railroads and rail equipment manufacturers.

A recent trend that is disturbing to those of us who build military models is the attempt by aerospace OEM's such as Lockheed Martin and Boeing to require licensing fees for products developed under government contract. It's difficult (for me at least) to understand why an F-16, developed at taxpayer cost, should be subject to a licensing fee by its' manufacturer. In effect, we've already paid once for the development of this airplane. It's certainly fair to protect the name of a private or publicly traded company (Sikorsky, Boeing, et al) but to attempt to charge a licensing fee to label a model kit "USAF F-16" or "USMC V-22" would appear to be an unfair business practice.

IPMS/USA is joining with the modeling industry to raise our legal representatives' awareness of this situation. We're asking for your help. By clicking on this link and typing in your ZIP code you can get the contact information for your United States Congressman. We'd like to encourage you to write stating your objection to this practice.

Tom Cleaver, a regular contributor to a number of websites, has summarized this situation much better than I can in a post on Modeling Madness. With his permission, I am copying his editorial here:

ByTom Cleaver

For the past several years, the scale model hobby has been under an assault that is powerful enough to lead to its complete destruction, though many participants are not aware of the problem.

I first became personally aware of this when I was hired to do a project for Revell-Monogram back in 1999. This involved getting some information on airplanes, so I decided to go to the source - the aircraft manufacturers - and ask for their material. When I called Northrop-Grumman, I was referred to the Legal Department, where a not-so-friendly attorney launched into a long and not-so-friendly discussion of how it was that the hobby industry was stealing the intellectual property of the companies by making unlicensed models of their trademarked products. After a few minutes of this, I decided to bail out of the conversation by claiming ignorance and the fact that I was in no position to influence the policies of Revell-Monogram. The next call was to Boeing, where I was quickly referred to the "licensing administrator," whose conversation was limited to informing me that the licensing fee for obtaining the information was one and a half percent of anticipated profits from the line of models the project involved. I used the same parachute I had used at Northrop-Grumman.

My next call was to the executive at Revell-Monogram who had hired me, to ask just what in hell was going on. I learned that since at least the mid-1990s, companies like Boeing and Northrop-Grumman have been attempting to impose licensing fees on model companies, for the privilege of making "representations" of their "trademarked intellectual property," i.e., the airplanes they produced.

Since I make my living by the sale of my intellectual property and have a general understanding of this issue, and most of you have never considered the question of copyright and trademark law, let me explain this situation, and what it means to you and your hobby.

Basically, since the outset of the hobby 50 years ago, the makers of model kits were free to design and construct replicas at will, providing playthings, toys, educational products and model kits to the public. The manufacturers of the original items - where they paid attention to the model industry at all - considered these items to be free advertising. Perhaps the fact that many of their employees (at least it was true in aerospace) also built models and were participants in the hobby meant that there were people in decision-making positions who had a personal stake in the continued existence of the hobby.

About 15 years ago, the corporate legal departments realized that all those car models represented a possible revenue stream, and that none of the makers of car kits was big enough to take on General Motors, Ford, or any of the others in a long-term legal battle over trademark infringement. In fact, the companies had a case, since their designs were their original products, and were identifiable and known to the public as Fords, Chevys, Caddies, etc. Thus, the auto companies decided to demand licensing and royalty payments from those making replicas of their cars and within a few years most makers of car replicas were licensed and paying those royalties.

This was followed by the train hobby, with various railroads demanding licensing for use of their logos and names on the cars, and in the area of race cars where even decal makers were required to obtain licenses to produce decals with company logos as seen on the cars.

In the case of the car model hobby, the production runs of mainstream kits are still sufficiently large that the licensing is affordable to the manufacturer. However, for the resin kit cottage industry, it was the kiss of death - nobody who was going to make 100 kits if the mold held out that long was in a position to meet the demands. Thus, you haven't seen too many resin car models produced in the past ten years.

And just in case you were wondering, you have paid these licensing fees, since the cost was passed on by the manufacturer, and you haven't built too many cars lately that are subjects the mainstream wouldn't produce.

Starting since at least 1996, major aircraft makers have begun to jump on this bandwagon, and here is where the problem gets personal for those of us who frequent sites like Modeling Madness and build airplane models.

Companies like Boeing, Lockheed-Martin, Sikorsky and others are demanding licensing and royalty payments for military aircraft replicas. Not only that, but several Air Forces are now asking for licensing payments to make decals of their insignias!

The model kit industry argues in response that military equipment, including ships, tanks, aircraft and the like have all been paid for by public funds, i.e. the taxes we pay the U.S. Government. Given that these aircraft makers would certainly not be making these subjects without a government contract and a guarantee of a sale for every piece they make, they are not "proprietary," particularly since an aviation historian can cite instances where a company designed something in response to a government request for proposals, and then lost the production contract to another company without recompense or where more than one company built the product at government direction without any payments being made to the original company. While the companies who built "Flying Fortresses," "Liberators," "Mustangs," "Hellcats," etc., may well have had significant input into the choice of name, the name was in the end designated by the government entity purchasing the aircraft, so the names cannot be privately trademarked.

Sounds reasonable to me, but then I'm not some 20-something drone in the back of the law library of the legal department at Boeing, with a student loan debt of $100,000 and a desperate need to gain favorable notice from the employer by economically justifying my existence.

The big model companies are fighting this and holding off the manufacturers by not answering the letters and phone calls, because even they don't have the resources to make the kind of fight all the way up to the Supreme Court that it would take to legally establish this bit of common sense.

It doesn't take an MBA to know what the result would be if Jules Bringuer were to pick up his phone some morning and hear a posh Brit accent say, "Mr. Bringuer, this is British Aerospace (owner of the "trademarks" for Hawker, Supermarine, Avro, deHavilland, Gloster, Sopwith, Blackburn, Westland, etc., etc.) and I am very sorry to tell you this, but you owe us $200,000 for all the kits you've illegally produced of our trademarked products." Bye-bye Classic Airframes, MPM, Eduard, Roden and every other company in Eastern Europe.

So, what to do? Mike Bass, who heads up Stevens International, the North American importer of Trumpeter kits (among others), has this past year taken up this cause with a letter-writing campaign to members of Congress. Mike has recently informed me that he has received a call from his representative, Congressman Robert Andrews, who has stated that he will take up this issue in the new Congress that takes office on January 20, 2005, and will undertake an investigation, and if necessary will offer legislation ending the licensing of these public-domain subjects.

Folks, this isn't a left/right, liberal/conservative, Republican/Democrat issue. It's our ox that's being gored by these Corporate Bulls!

You can play an active role in stopping this in its tracks. Of the thousands of daily visitors to Modeling Madness, a majority of them seem to be from the United States. That's a lot of American modelers whose enjoyment of this hobby is at risk if this attempt by the aircraft manufacturers is successful.

What can you do? You can write Mike's Congressman at this address: Congressman Robert Andrews 2439 Rayburn House Office Building Washington, D.C. 20515 Trust me, if he gets thousands of letters from modelers in the United States asking him to take action, Action Will Be Taken.

And you can also write your congress-critter and tell them about this problem - let them know your concern for the future of this hobby and the continued good fortune of all those independent entrepreneurs running hobby shops and mail order companies and decal-makers and aftermarket companies and their employees who would be put out of their jobs, and all the points made above in the argument against licensing.

If you don't know which critter is yours, go to Type in your Zip+4, and you will get your Congressman's name and office address and office telephone number. If you've got an unlimited domestic long distance phone deal, call the Congressman's office and talk to one of the staff - they pay attention to people who call. Send the Congressman or woman a letter. Trust me on this, when a Congressman gets thousands of letters in support of a particular issue, they sit up and take notice. When those are thousands of different letters, i.e., not "ditto" letters from some special interest campaign, they take even more notice.

Be sure to cc Congressman Andrews, so he and his staff will know who else in the House knows. Be sure to call or write your Senators, too.

This one isn't hard: you're asking them to defend small business, individual entrepreneurship, and the right of the people of the United States to have the full enjoyment of the property rights they have bought and paid for.

And yes, do tell all your modeling friends who don't come to Modeling Madness and who aren't on the internet about this. The more the merrier and the greater the likelihood of success.

Or do you not want new kits, decals, and aftermarket products at prices you can afford for the continuing enjoyment of the hobby that keeps you sane?

As I said, Tom gets straight to the heart of the matter here. Again, I encourage you to let your voice be heard. Please write or call your elected officials' office and help protect the future of this hobby.

John Noack
IPMS/USA 1st Vice President

January 2005

11 posted on 01/31/2005 7:51:56 AM PST by headstamp
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To: headstamp

Ping for later read.

35 posted on 01/31/2005 8:23:21 AM PST by blau993 (Labs for love; .357 for Security.)
[ Post Reply | Private Reply | To 11 | View Replies ]

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