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http://www.modelrailroadnews.com/pages/edJan09.html This must have been done by a new hire.
Excerpt from BNSF letter to manufacturers:

“BNSF requires entities that use our intellectual property to be licensed with us.”

That “intellectual property” is actually not only BNSF but also Santa Fe, Burlington Northern, Frisco, Northern Pacific, Great Northern, CB&Q, SP&S, and others. They state: “Our standard royalty for use of our logos and associated images is five percent of the total sales of items bearing the logos and related images of BNSF and its predecessors, with a $1,000 advance royalty payment due upon issuance of the licensing agreement.”




Don' they ever learn?
 

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Didn't you know? Pumpkin and green will be the next fad, ALL the kids will be wearing it.Better get in on the ground floor while it ONLY costs ya a grand....
 

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Greetings George,

This announcement was posted on the Aristo-Craft Forum a couple of days ago. I know quite a few have written to BNSF about this matter drawing attention to their concerns. Some have written as shareholders, some to other departments and I wrote to the Licensing guru.


From a modelers point of view, especially with hard times at present, an increase in costs is to be deplored.


I hope that they do re-think this and make note that UP had a change of heart back-a-long.
 

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Posted By George Schreyer on 02/05/2009 11:56 AM
hmm.. link is gone already.....

maybe somebody at BNSF pulled the plug
George

The link is to the Model Railroad News magazine web site, to the Jan. 09 editorial page and the only one available now is the Feb. 09 page.
 

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Another good reason to Freelance your line, or model something so obscure theres no questions of licensing rights.
 

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Since it is now gone, it's a good thing I copied it...

Excerpt from an editorial by John Sipple....
".............It has been sent around to a large number of model rolling stock manufacturers, and it’s from BNSF. Just when we were starting to smile after the Union Pacific debacle, here we go again.

BNSF wants money, so now they’re going to try to milk our tiny industry. They end up the letter by saying, “BNSF requires entities that use our intellectual property to be licensed with us.”

That “intellectual property” is actually not only BNSF but also Santa Fe, Burlington Northern, Frisco, Northern Pacific, Great Northern, CB&Q, SP&S, and others. They state: “Our standard royalty for use of our logos and associated images is five percent of the total sales of items bearing the logos and related images of BNSF and its predecessors, with a $1,000 advance royalty payment due upon issuance of the licensing agreement.”

Later in the letter, it says, “Our goal is to participate in the value derived from the use of our logos, paint schemes, and associated images but not to keep anything bearing those logos, paint schemes, and associated images from being made or sold.”

Got the picture? There are a lot of angles on this, but let’s approach this from the angle of reality. We have a very small industry. Even the “big players” in model railroading are really not very large companies. Many companies are little more than Mom & Pop operations while others are huge with thirty employees or so. I know several companies that really just meet the needs of their employees, pay modest salaries for the management, and have little to show beyond a lease agreement and various kinds of equipment.

A thousand bucks up front? I don’t think so. Five percent of the total sales? There goes the profit margin. For many companies, they will just stop putting BNSF brands on their products, the letter’s assertion notwithstanding. We live in a very unstable economy, and the others who go along with BNSF may find themselves out of business.

What BNSF is doing is not illegal, but it does have the joyful property of the biggest kid in school shaking down the kindergartners for their milk money. It is a prime example of corporate arrogance, where one division or department in a company sets a course of action that seems perfectly reasonable to them, even if they have no idea what impact they are having at the other end.

Of course, we’ve been here before. In 2002, Union Pacific went on the warpath with the whole business of trademarks and other intellectual property, that last being an oxymoron if ever there was one. By 2005, it had become clear that UP had dug themselves into a hole where their licensing program was costing far more than it was taking in or was ever likely to take in. Not to take anything away from Mike Wolf’s masterful victory over them on the legal stage, but they already had some serious doubts and legal reversals fueling the desire to settle. Don’t be surprised if BNSF doesn’t find itself down that same road.

What did UP learn that BNSF hasn’t so far? Union Pacific was trying to get its brand up in the pantheon of big-time trademarks such as “GAP” and “Tommy Hilfiger.” I don’t know many kids were burning to spend $125 for a T-shirt with the “Union Pacific” brand just to make their friends jealous, but some folks at UP seemed to think this was plausible. However, the Intellectual Property people told them they’d have to plug the leaks, which is how they described the railroad hobbies. Where they are now makes a lot more sense. They only have to control their trademarks; they don’t have to be paid, which is good because they weren’t going to get much, anyway.

And that brings us back to BNSF. Guess what? BNSF is lining up to be a corporate sponsor of the Super Bowl in 2011. Along with high-power advertising, they get a bunch of tickets to scalp, and a skybox in the stadium. What’s the catch? I’m guessing the Intellectual Property people have told BNSF they need to plug their leaks. Their net profit will be a ton of bad press and very little cash inflow. They could save themselves a lot of grief if they’d just give out free licenses in return for an application that proves they have control of their brands. BNSF needs to realize there simply isn’t enough pie for them to get any unless they expand the pie first."
 

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This is why I NEVER wear any clothing that advertises anything, anybody or any entity. Companies PAY big bucks to advertise, (What was it... $300,000.00 per second during the Insipid-Bowel)... Why should I have to pay any company to give them FREE advertising. (I have been tempted to chisle off the brand name from my car, but it is rusting too quickly as it is, I don't need to add more places for the water to enter!!!!)


There are brands (not necessarily toy trains) that I am loyal to and will brag about to anybody that is willing to listen, but if the company wants ME to advertise for them, they have to pay my advertising fee... NOT the other way round!
 

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The catch to this is the 5% fee. To be able to prove to themselves that they are getting their due, they will make you sign something allowing them access to your books. Nobody in their right minds are going to permit that.
 

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Right Now, I am creating the Buy No Dollars Forever association. The Logo will be BN$F. Maybe I can get all the model train companies to advertise my association for free.
 

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Oh Boy!

Anyone in the large scale business -- wholesale - retail - manufacturing -- wish to offer their response to the question: Anyone in the industry contact BSNF and ask what amount of profit do they want that outweighs the disgust of the model railroading hobbiests, retailers, wholesalers, and manufactuers?

Do they associate the use of their logo with non-railroad uses, e.g. sweat shirts, soiled packpacks, Rap guitarists, Hells' Angels, USC dropouts, Yoga-based attorney trainers, former tax payers now government officials, and crazed snake collectors turned N gaugers in herbariums.

Are they not charging us to advertise their blasted trains? Huh? Yes, the logos are on models of THEIR trains. Gee, what a concept!

Two other questions:
1 - What is the income do they think they will accrue in terms of units sold in HO, S, G, and N after the charge for advertising them is in place?
2 - Is that amount based on the pre-punitive royalty policy?
3 - Is that amount based upon the Santa Fe royalty profit history -- gasp! Is that at 5% plus a $1000 fee??

Maybe a stimulus offer is needed for BNSF if they are so desperate to charge people who advertise their trains.
 

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The toy manufacturers are going about this the wrong way.... it is all backwards!!!!


Anybody here know how much it costs to put up a billboard along the highway? What is the assumed readership of a single billboard? i.e. what is the amount of exposure per advertising dollar?

I think the RRs need to be PAYING the toy manufacturers for the advertising that the toys generate. Maybe the price per item the logo is printed on should be varied based on the quality of the item and the assummed exposure each item might generate.

Let's see... break the quality of the toys into 5 categories and apply some numerical value to them

A No quality railcar with the CMBY logo would not be allowed at all.

Low quality has a value of 1
Medium quality has a value of 3
High quality has a value of 5
Exceptional quality has a value of 7


Then also break it down into the various scales to determine the number of modelers that do that scale and what kind of exposure it might generate.

HO is probably the biggest exposure, followed by O and then maybe N and Z. "Garden" scales (I refuse to apply a letter here and expose the fact tht it stands for "GOOFY!) may be a greater exposure value because of the national status of some of the "Tours" that many clubs give. Lets rank them on a scale of 1 to 10 (I am sure some Madison Avenue type could do a study as to prioritizing these numbers more accurately... and create all kinds of controversy as to the accuracy of it!)

HO = 6
O = 5
N = 4
Z = 3
Garden = 7


May have to split that into a number of units sold AND a separate "exposure" number (i.e.: how many people take a Z scale train to a venue vs how many take a garden train to some place to show it off?)

Now multiply the "Quality" rating by the "Exposure" rating and then multiply that by a scaling number to provide the price the RR must pay for their logo to appear on EACH toy that is sold.



This is beginning to sound like a way to reduce the cost of our hobby!!!!!
 

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Don't forget that G-Scale tends to be used in outside displays with a lot of non-train fan visitors, i.e., Several botanical gardens, the Living Desert in Palm Springs and the FairPlex display in Pomona, CA.

However, what counts is not just the number of eyeballs, but how much revenue those eyeballs bring. TV has a pretty well known response vs eyeball curve, as does spam. How many visitors to a G-Scale display will say, hmm, look at that little BNSF train, I think I will send stuff by BNSF from now on.

On the other hand, how many folks will say, I only want to run BNSF, MFG A paid the fee and has it, I will buy from them, MFG B does not have it, I will go someplace else.
 

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The BNSF Corporate Headquarters are here in Ft Worth. Each year they have a huge Company Family Day Picnic. They ask our club to set up a display. We typically have 4-8 loops running (about 1,600 sq ft). When we go there, we try to run as much BNSF rolling stock as we can. Maybe next time we should not run any BNSF at all and roll all the UP we can find. Then we put up a big sign that says "We are unable to run model BNSF equipment due to licensing and royalty requirements of the BNSF logo."

Of course it might be the last time we get to set up a display there.
 

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No no no... don't insult them that way... be sure to run nothing but BNSF engines and rolling stock, just make sure all of it is hand painted stuff and be sure the people that do the hand painting are not professionals.
\
 

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B.N.S.F. = "But Not So Free"
-or -

"Better Now Send Funds"
- or -


"Best New Slush Fund"
-or -

"Broke Now Solicit Fees"
-or-


"But Not So Fast"
-or -


"Bank Now Should Fill"
-or -


"But Now So Frugal"
- or if they DO get negative publicity
(as UP did) from the same stunt) -


"Better Not Stiff Fans!"



Tom
 
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