Just read the following article on www.strategypage.com and was wondering if their prediction could be true? Will royalties be the death of this great hobby?? I truely hope not!!!!

The article as it is shown:

THE WAY THINGS REALLY WORK: Why Plastic Aircraft Models are Going Away


January 31, 2005: 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 companys 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).

link to www.strategypage.com

very interesting article, thatnks for the good read

What should be interesting is say Trumpter making models of US WW2 aircraft...they dont have IP laws in China from what I understand.

Hopefully the legeistation that is getting put to congress will make it illegeal to collect royalties on Goverment Purcashed equpiment...since the tax payer already paid for it already.

It might get ugly...just have to look at NASCAR and see what happened with the cottage industry guys there....there isnt any left

I would suspect that there's some validity to their concerns. Boeing was one of the first to demand licensing from model firms. Indeed, the added costs makes it an expensive hobby for those of us who who have been doing it for awhile and makes it near impossible at the entry level. What kid can afford a kit that costs over forty dollars?

Everyone wants to squeeze out another buck these days.

This has been brought up several times on several forums. I think the manufacturers of the "real" aircraft and such are being incredibly short sighted. What better free advertising could they have than bunch of models of their products on the shelves? Growing up building Boeing aircraft like the B17, B29, B52, what kind of plane do you think I'd rather fly in on a trip? Then there is the whole can of worms about royalties already being paid by tax payers. For example a US model company selling a US military aircraft to a US customer the royalty should already have been worked into the tab for the aircraft. What about a US model company selling a US aircraft model to a customer in the UK? They haven't paid the royalty with their taxes, should they have it tacked on then? Finally there is the whole can of worms of China not paying royalties on many items. That might mean the final death knell of the model industry of any country other than China. Finally what about royalties on products no longer owned by anybody? Who owns the royalties on a SPAD, or a King Tiger?

I hope this is all a tempest in a teacup and it will all blow away. If not I guess I have enough kits stashed to last me a good long time.

When I read such things, it makes me sad and angry on the behalf of this great hobby.

Should photographers and painters pay royalties as well? Then comes movie-makers, game-makers? Then the name even cant be mentioned in press or books?

We will probably end up paying royalty for having the name printed on our boarding card?

Rodger,

The catch to that is....making sure you have that one example that you really want in your collection in the stash.

I hear you...more justification for a massive cache of kits. Though I think my wife uses the same rationale for shoes.

Ciao everyone,
Fine Scale Modeler also had an article on the same thing. I am sure that the manufacturers will realize that any commission/royalties they would receive would be minimal compared to the government/commercial contracts they strive to gain. I simply think it's a case of "chicken little."
Ciao for now
Rob

My new view on the royalties issue has changed. I've just received a Tamiya Jeep model, and on the side of the box is an advertisment about how great Chrysler products are (as if anyone would believe that one :-) ), my price for this model was 8.00usd, I don't think thats shows any kind of price increase, so I am thinking that instead of a price increase that we simply have to endure more advertising. In this world of 60% advertising and 40% content I think if your like me It's pretty easy to tune out all that "fluff". So hopefully this is a sign of the future of our great past time, and it will live on forever .
Could this be True?

Viva LaModelling


Bruce

But remember... you all haven't factored in the one element that will screw it up for the manufacturers of all these warcraft vehicles: modelers. There's a huge modeling community out there, not just here but abroad. There is such a thing as copyright, and its ok for modern vehicles, but like any other copyright, especially since it is government issue equipment, I would think there would be a public domain timeframe on it as well. Which would mean only the new/current equipment could not be reproduced, but the older equipment would be available. I don't know, I just see it as a big pain for the manufacturers. Its a two-edged sword, and companies like Tamiya and Dragon aren't going to just sit and take it all quietly, and I don't even know if these two are the biggest manufacturers. The important thing is to write your congressmen/women, officials, anyone and everyone... sign petitions, contact your representatives, bring this up with other modeling communities. The public voice needs to be heard.

The only real problem I see, is if they draw upon the Patriot Act... they might use that to make it harder to get information about military equipment, whatnot, maybe even information on airlines, etc. And that could pose a whole new issue and factor. If these companies really wanted to make it rough on companies who make models, it could get really dirty and nasty.

Deep sigh...

I am a true blue Capitalist, but stupid greed really p*sses me off! The corpulent, er corporate mentality of the BOTTOM LINE at the expense of all else needs tempered with common sense!

Everyone needs to make a profit, be it Boeing or you and me, it is how we get ahead, it is how we all have jobs, but good Lord. Slap ads on the boxes, put a splash on the directions, but I can't imagine that corporations are so frigging shortsighted that they can't see the positive aspects to a bunch of us hobbyists out here in the real world building replicas of Boeing products, of General Dynamics Products, etc. I can understand the manufacturers making a stand regarding accuracy and fidelity of product, but geez!

AND don't even get me started on the abuse of my tax dollars! I 100% support the expenditure of my hard earned wages for the equipment that keeps us free, but I sure do NOT expect to pay a royalty for the right to build a replica of what I already paid for!

OK...I'll put the soap box away!

Jim

I guess the "no royalty" on the Nazi war machinery also might explain why there is so much of it available as models.
I gather then from the post that either traditionally western model companies will either be forced to relocate their base of operations to countries with more relaxed IP (like China) or just fade away into oblivion due to the rising licencing costs...

Well I can see that I haven't done my research either, I didn't know that this subject has been put up before. Sorry for the redundancy!

I for one would like to contest the whole idea. I mean if I would scratchbuild something, do I need to make sure I pay a royalty somehow to someone??? How much of the "thing" can I build without needed to pay the royalty?? I'm sure I could say I am making a "what-if" build and am not making just this particular "thing". On the other hand I'm sure things could get very nasty if it came to that. It would be a big shame of course!!!

Shhhhhhhhh Don't give them any ideas for Pete's sake!

I think if it were based on an actual production model or a copyrighted conceptual model, then I believe the answer would be yes.

I am sorry but I disagree here. Copyright and tradmarks etc, are only protections if you plan to sell or distrubute in anyway a product you have made that is protected . If you make it for your own personal use - you are not infringing on the rights of the trademark etc.

As to the death of the hobby - I beleive Mark Twain said it correctly - " The report of my death is an exageration" The hobby is alive and well, and I am sure will surrvive tthis as it has other bumps in the road.

Hmm, not to sure about that. I remember in the late Eighties that Harley-Davidson (trademark) went loopy over things like 'apehanger' handlebars, the nickname 'Hog', and even words like Chopper.. They were trying to copyright the word 'apehanger' for pity sake... (apehangers are those ridiculesly high handlebars on motorcycles. The name has been generic for them for decades. But once 'hardcore' biking became 'fashionable' in the late eighties, Harley deceided to jump on the corporate bandwagon and try to copy right the whole 'lifestyle' and make a profit out of it, sueing everybody who would not pay them for the privilage of using termonoligy and bike parts without paying them. In England they have a good phrase to deal with this, but I can't repeat it on this family site..)
They were actualy trying (and succeding) to close M/C shops which had ben trading for decades under names like 'Hog Heaven' or something similair if they would not pay Harley-Davidson a fat cheque. Not sure how that ended as I've not been involved in bikes that much for a while, but it goes to show that large corporations think they can get away with anything.
Don't be surprised if somebody from Boing or something knocks on your door one morning......

I still don't think that this will end the hobby, maybe just a adjust what will be available
Cheers
Henk

We are talking apples and oranges. I was referring to the person who scratchbuilt a widget for their own use ONLY. This is not an infringment of any trademark etc.

Read this and get fired up fellas............


THE SKY HAS FALLEN, FOLKS!



By: Tom Cleaver



News flash: the new Tamiya 1/32 F-16, which is being marketed as the “Lockheed-Martin F-16 Fighting Falcon,” is the product of a licensing agreement between Tamiya and Lockheed-Martin, as stated on the first page of the kit instructions.

Folks, there’s no need for me to run around yelling “The Sky Is Falling! The Sky Is Falling!”

It’s fallen.

This agreement by the World’s Largest Maker of Plastic Model Kits is the precedent the aircraft manufacturers have been waiting for. Up to now, all the kit manufacturers were united in refusing to deal with the airplane companies on this issue. Whether they might have prevailed in court if pressed was always a question no one could know, but now we do know. With this precedent, any aircraft manufacturer operating under U.S. Copyright Law will only need to serve papers on any kit manufacturer commanding them to cease and desist or appear in a U.S. Federal Court - and they win.

This really does signal the end of the limited-run kit industry and the aftermarket industry, not to mention the small eastern European companies - at least as regards the production of models of airplanes originally designed and built in the United States.

It’s not because of the cost of the licensing fees. That they could deal with.

It’s the insurance.

In the weeks since I first published my editorial here on this topic, I have been Receiving An Education on the subject from a number of knowledgeable sources. The most knowledgeable of them all is a guy whose name you would recognize were I to publish it here, a guy who has had an impeccable reputation for his beautiful limited run kits for a long time. Since he has requested I not use his name (since he doesn’t want to draw attention to himself by the corporate legal departments), you’re going to have to trust my journalist’s judgment that he is indeed a model industry “Deep Throat.”

As he explained it to me, when a company like Lockheed-Martin comes calling and offers a licensing agreement, the licensee also agrees to obtain Product Liability Insurance. Not for the licensee, for the licensor!! This is in order to protect the huge deep-pockets corporation and hold them harmless when Little Johnny decides to find out if the pieces in Mr. Licensee’s kit are edible or not and gets a scare when Mommy and Daddy have to take him to the Emergency Room to have his stomach pumped.

As “Deep Throat” explained it to me, the licensing fee is no problem - it adds cost, but not a prohibitive sum. But product liability insurance is nearly unobtainable nowadays, and it’s definitely unobtainable at a price a small company can afford without pricing themselves out of business trying to cover the additional cost.

For the World’s Biggest Plastic Kit Manufacturer, the liability insurance is No Big Deal. For MPM, for Roden, for all the others, it’s going to be another matter entirely.

This is not just a problem for those of us who build little plastic model airplanes. It has killed the limited-run car model business. It has put a stop to the guy who likes playing the “Pacific Fighters” Flight Sim game and wants to write his own program for an airplane. In fact, “Pacific Fighters” has stopped publishing any upgrades that include Northrop, Grumman, Boeing, North American, Curtiss, Chance-Vought, Lockheed or Martin aircraft - which makes it pretty hard to play “Pacific Fighters” indeed.

I guess I’m lucky that I like British airplanes, since British Aerospace isn’t covered (yet!) by the Digital Millennium Copyright Act. But as far as American airplanes are concerned...

Personally, I’ve just bought my last Tamiya kit. And no, that’s not an invitation or a suggestion that any of you might want to come to a similar conclusion, since that would mean I was Advocating A Conspiracy In Restraint Of Trade under the Digital Millennium Copyright Act.

Disclaimer: the commentary in this and other articles is that of the author and does not necessarily reflect the opinions of the management. Please direct comments to the author or the Forum.

Previous editorial:

EDITORIAL: TIME TO STEP UP AND DEFEND THE CONTINUED EXISTENCE OF YOUR HOBBY



By: Tom 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 could be. Bye-bye 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 http://www.house.gov/ 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?

Ladies and Gentlemen,

I think ALL of you have valid inputs on this question, however the issue is the future builder of models; kids and what they think on this subject. DO the kids even know models exist. OK for you over 35 crowd, lets think back...back before pong! What did we do? We played outside with other kids and then when we got tired or it rained, we tried to move into the house and do something...modeling for me. I started at age 10 with little or no adult guidance other than someone getting the kit for me and off to the races I went. The world could end as long as I got to finish the monogram, MPC, or airfix kit I was working on. My daughter is 14, and she builds kits. She does so for a few reasons. One is I do, and I have a lot of 'fun' kits to play with. But I think #2 is that we do not and will not have an X-box, PS2, etc in the house. My daughter does go around to the other guys in the neighborhood and checks out whether they want to come out and play soccer/baseball ect. And never is she taken up on the outside gaming. They all sit there and play mindless games! Mind you we too have a small assortment of computer games, but game time is very limited. I feel that doing a model is more than just putting it together...it's following directions, focusing on what you are doing (or bleed for it!), using very small parts in a very small space, and using your imagination to see what you are creating and where it is going. The outcome is not always what you expect. On the games the kids play, if played enough, you will know where to shoot, jump, or duck to get through. Good or bad, it's what I see. And I have seen it in Europe as well as the US, so it’s a bad thing all around. I will not start into the health problems with video games because I do not want to fence with the 'Bad" problems of model building. The question is: Who do we(Modelers) compete with the electronic toys to get kids into models? The cost is not helping. I am sure there are many reasons for the cost, and I am sure greed is one of them. Greed will make it very difficult for the average 12-14 year old to get the new FW-200 (kids also like BIG, just look at the b-17/24/29 that are still popular), because it has an 80.00 price on it. So who is the market. Older adults who MAY want to build this kid, or kids who will build it just because it its the biggest, badest plane in the store? The market is and has changed from the kids to the older crowd. Good, bad or otherwise. We could all go on and on about this with no great answers in sight, but I feel that we as modelers need to get everyone we can interested in what ever may interest them for building purposes. Every kid we miss now is one we have lost for the future. Some day the model companies will see this and start to produce those ‘cheap’ kits again. I HOPE! If we do not and they do not…this could be a short ending to a long time of building. And that ladies and gentlemen would truly be the crime!

For what it is worth…

Tracy

Hmm, I see a common thread in this saga. Correct me if I'm wrong, but are all the companies involved in this 'squeezing of the last drop' American? The reason I ask is that it seems that this started with car manufacturers like ford, GM etc, but I have not heard anything about Ferrari, BMW, Mercedes or indeed the Asian or Japanese brands. Likewise with trucks. I presume that we will see the like of Peterbuildt jump on the bandwagon, but I don't think Scania or Volvo or again Mercedes will. Same seems to apply to Aeroplane manufacturers, all American ones are into it, but not the likes of BeA or Lynx or Westland. (Bear with me if I don't get the exact brand names right, I'm no expert).
Maybe we should just not buy those models??

Henk

John,

Point taken and I must admit I am not totally up to speed on all of the details about copyright laws. But what I guess I was trying to say was will this subject be pushed so far as to somehow bring about some type of controlling agency to make sure the appropriate fees are paid?? Other than the jurisdiction of the courts that is.

I must also admit I think I understand why some vehicles and/or aircraft might not be readily available. The manufacturers might have tried but were unwilling to pay out for what royalties and what not costs.

Another question I have is, doesn't the copyright on copyrighted material have an expiration date? I've written a few childrens books and in the course of getting them published I have run into several works that have been copyrighted which the copyright has expired so that it is available for public use. I believe it is 75 years or something. Wouldn't the same rules apply here?