Model production blocked by company lawyers???

I received this today. I'm not sure how to take it, although after the
Sikorski story I guess I'd believe anything. Would be nice to find this is
an over reaction.
"For over half a century, kits have been sold that enable military history
buffs to assemble scale models of military ships, aircraft and vehicles. But
that era is coming to an end, as the manufacturers of the original
equipment, especially aircraft, are demanding high royalties (up to $40 per
kit) from the kit makers. Since most of these kits sell in small quantities
(10-20,000) and are priced at $15-30 (for plastic kits, wooden ones are
about twice as much), tacking on the royalty just prices the kit out of the
market. Popular land vehicles, which would sell a lot of kits, are missing
as well. The new U.S. Army Stryker armored vehicles are not available
because of royalty requirements. Even World War II aircraft kits are being
hit with royalty demands.
These royalty demands grew out of the idea that corporations should maximize
"intellectual property" income. Models of a company's products are
considered the intellectual property of the owner of a vehicle design. Some
intellectual property lawyers have pointed out that many of these demands
are on weak legal ground, but the kit manufacturers are often small
companies that cannot afford years of litigation to settle this contention.
In the past, the model kits were considered free advertising, and good
public relations, by the defense firms. The kit manufacturers comprise a
small industry, and the aircraft manufacturers will probably not even notice
if they put many of the model vendors out of business. Some model companies
will survive by only selling models of older (like World War I), or
otherwise "no royalty" items (Nazi German aircraft) and ships. But the
aircraft were always the bulk of sales, and their loss will cripple many of
the kit makers. Some of the vehicle manufacturers have noted the problem,
and have lowered their demands to a more reasonable level (a few percent of
the wholesale price of the kits)."
So my tax dollars just went to buy a multi billion dollar system and the
company that built it wants to suck another umpteen thousand out of the kids
building models of it. Of course many of us kids who built those kits went
on to become the engineers and scientists that built the next generation of
systems. Maybe this is for the best - the next generation will all become
high priced lawyers and we can buy the hardware and software from some
unheard of company in the third world.
Val Kraut
Reply to
Val Kraut
Loading thread data ...
Yeah, I think theat the Chinese makers will just thumb their noses at them... and we can order them over the Internet... serve the jerks right!!
Reply to
Lance Mertz
Its not the lawyers they are just doing what the company wants ,also the good ole usa has the most restrictive laws concerning copyrights and the longest lasting
3 Feb 2005 22:14:50 -0500, "Val Kraut"
Reply to
There's actually two possibilities here - One, the company understands the facts and has directed the lawyers to go after the hobby companies. Two, the lawyers have been given general directions to protect Intellectual Property and in this case are enlargeing their role - and budget - beyond reason. Given what companies spend on ads to hype the taxpayer about their products I tend to believe the second.
Val Kraut
Reply to
Val Kraut
What is amazing about this is the greed of the corporations. What I do not understand is that military vehicles are property of the US government 'In short they belong to us" VLS released a copy of a D-7 caterpillar bulldozer. I talked to VLS I mentioned my concerns regarding Caterpillar "they protect their property with a vengeance" I was told by VLS that they cannot do anything because they use the military designation. For example you cannot sculpt a figure of Jimmy Stewart, But you can sculpt a figure of Jimmy Stewart in his military uniform because at that time he was owned by the us military and sell it. My opinion is that we as modelers need to get together and petition the corporations and tell them how we feel.
formatting link

Val Kraut wrote:
Reply to
I think you're right. The numbers don't scale out. An Airfix 1/72 P-38 model goes for less than eight bucks; a reasonable royalty on same has to be under fifty cents or the kit won't move to entry-level modelers as well as it does now. Yet we hear numbers on the order of $40 per kit--even the Trumpeter behemoths won't carry that kind of price tag.
So why the outrageous royalty demands (even $4.00 a kit is too much for anything with an MSRP under $100)? It's how the legal department has to justify its speciific activities within the corporation. The standard, at least in private practice in California, is to charge clients three times actual attorney salary, according to the notion of 1/3 for the attorney's compensation (presume an associate, who doesn't have a profit interest in the firm), 1/3 for overhead, and 1/3 for firm profit (from which the partners draw, over and above their salary, if any). The corporate setting would be a little different, but that's the kind of formula being employed. Spread the predicted hours of the attorneys' work on the IP over the number of models being sold with IP content, and divide it out; you'll certainly get an outlandish figure for royalties, even if you scale to MSRP. What it comes down to is that these IP rights are probably not worth enforcing, but the initial steps will be taken anyway because the attorneys are being paid anyway and don't get overtime, so it's just one more item in the hopper.
Mark Schynert
Reply to
Mark Schynert
"Mark Schynert" wrote
Hasn't cost accounting reached California yet? "Rule-of-thumbing" it like that sounds like a prescription for 1/3 of the firms to make money, 1/3 to break even, and 1/3 to go out of business . . .
You'd think that someone with their head out of their ass would calculate actual costs and reasonable investment returns and market themselves on a value basis . . . Lemme guess - lawyers are prohibited from advertising their fees in CA?
Reply to
Kurt Laughlin
And "Val Kraut" opened up and revealed to the world news:DVBMd.772$ snipped-for-privacy@fe10.lga:
Val & Everyone else,
I was talking with my father about this, and he'd asked isn't/shouldn't royalties be covered under the licensing agreement?
Reply to
And "Val Kraut" opened up and revealed to the world news:7fxNd.1834$ snipped-for-privacy@fe10.lga:
Ok, sorry, what my father was thinking and asking about is shouldn't the topic of royalties be covered in the licensing agreement between say Monogram/Revell and say Lockheed Martin. Although I have to say that after looking at the entire box lid (the bottom didn't have any printing on it) and the destruction sheet. I was unable to find anything that said something like: made under license. . .
His example is/was say the XYZ model company makes a kit of driver Geoff Gordon's car. The XYZ model company would have to make licensing agreements with EVERY advertiser on Mr. Gordon's car in order to include them on the model. And for any that for whatever reason that the XYZ model company was unable to come to licensing agreements with they wouldn't be able to use said logos.
Reply to
"Val Kraut" wrote
No, not really. In reality the ownership of Government-funded designs is part of the contract, and I'd suppose that in most cases the company retains the rights with the Government being allowed to use it freely. This has probably been in (aircraft) contracts since the 1920's or 30's. If the minds developing the design were Government (employee) minds, then we'd own it.
Security has nothing to do with ownership.
Reply to
Kurt Laughlin
Your predicted rate of firm failure out here is almost right on, at least among the high flyers, although it usually takes the form of partnership mergers and splits. No, no prohibition on adverts on fees, though it's more like disclosures over cocktails than Yellow Pages ads, and believe me, the CEOs or CFOs or those reporting to them started getting real prickly about that right when the Internet bubble burst. Private practice is cutthroat, but the rest of the system soaks up the attorneys who fail at that--they either go into solo practice, where the fee dynamics are a lot different, or they latch onto government positions, or they go corporate with a client that liked them, or maybe they just walk away entirely. there porbabbly is a lot more value marketing now, but once a firm gets involved in complex drafting, seetting policy, and attending to litigation for a corporate client, there is a real disincentive for the client to quit, because the client will now have to duplicate expenses to get a new firm up to speed.
Mark Schynert
Reply to
Mark Schynert
What I am unclear about is are the companies seeking licenses for copyright or trademark. The later has far more limits than copyright. Copyright gives a LOT of protection to owner, compared to trademark.
Reply to
Don Stauffer in Minneapolis
I don't know how this works with copyrights or trademarks, but at least I do know something about patents on military contracting. Company CAN file a patent. But government gets rights automatically. The company can ask government for rights back if government does not want to exercise rights. But that is not automatic- government must consent/agree to this. I suspect if one could find an interested news person, a real stink could be made over government doing this for model licensing, if copyrights and trademarks are handled same way.
Reply to
Don Stauffer in Minneapolis
What someone should do is contact a DOD or govt. lawyer to see what the governments' stance on intellectual property is. If the govt claims the rights to a design because it is the property of the U.S. Government then may be the model companies can band together and get a class action lawsuit going to get these corporations to back down due to govt pressure.
Reply to
Scott A. Bregi AKA The Model Hobbit
That was for the most part true in the past but now is no longer true. Because defense items like airplanes cost so much and need such a huge capital investment to get going, the aerospace firms now negotiate contracts with DOD that guarantee them certain rights - they want every last penny of their investments to make a profit. The government often gets nothing but the actual hardware - the company may retain the design rights, the copyright for the maintenance documentation, and it may even trademark the item's "official" name. The above is especially true if the item a company has sold to DOD has a cross-over potential in the civilian market. Some companies won't do high-dollar government contracting unless they retain all rights.
Probably for security considerations, not trademark or copyright issues.
Legally it may if that right was retained in the contract that the manufacturer had with the government. Just because it's painted olive-drab and was designed and manufactured at government behest doesn't mean that the manufacturer doesn't have legal rights to the item.
They could care less. Their job isn't to protect the modeling "industry". It's to get hardware for DOD.
John Hairell (
Reply to
John Hairell
On Saturday, I did just that. You can go to the 'contact' page of the DoD website and pose questions. I basically asked what you requested and gave a small example of what we're talking about. We'll see if anyone responds...
Frank Kranick
Reply to
Francis X. Kranick, Jr.
Sometime in the 90's the contractors caught onto the idea of making money off "toys and replicas" and the Government started allowing the original designer or it's later incarnations in the form corporate buyouts to retain the rights to the design for the purposes of making toys and/or replicas. Add in the stupidity of McDonald's "coffee crotch" lawsuits and possible product liabilities and the lawyers went apeshit. However designs that predate those arrangements are still public domain, case in point the P-38, Lockheed can enforce copyright/trademark on the company name but not P-38 or the airframe...problematic whether they can enforce same for the "Lockheed" that appears on the military dataplate for decals purposes. The designers of the Stryker AFV did in fact have a contract clause spelling out in detail ownership of the design for "toys and replicas" and you probably won't see one of those anytime soon in kit form.
Reply to
Drawings for aircraft at NARA show no such ownership markings through at least the end of WWII and are considered PD.
Reply to
Models aren't the Government's highest priority just right now ant I suspect any such letter would not be answered any time soon. Further, I remember the old saying "Don't ask the question if you can't stand the answer. :-)
Reply to
Bill Woodier
Just how widespread is the problem??
Is Ford, Toyota, General Dynamics, GM who ever builds the Hummer etc. are they all crying foul?? Or just a few??
Do you think the problem may go away by itself??
just wondering
Reply to

PolyTech Forum website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.