RE: Royalties for models
 

"You will have to pay $710 in royalties on your F-100!" Jeeezus...do you REALLY think BV would sign an agreement for that?"
Don't know, do you?

RE: Royalties for models
 

That's right big companies are all money grubbers. The whole democratic system is nothing but a big mess and we should follow Europe's lead and become socialist so that we can all be on the same level. This way the blue collar workers and CEO's can make the same amount of money and everyone is happy ... not.

Totally funded? Try again, you don't think these companies spend their own money on R&D and research? How do they get the contracts unless they've spent their own money to be able to be at the level to acquire a gov't contract. The American public pays for a lot of things the gov't uses, but that does not mean they own it.

RE: Royalties for models
 

Actually.. if I remember correctly, the last privately funded aircraft developed for the military was the F-20, and that nearly bankrupted Northrup before Grumman bought them.

Nobody really knows what LM is asking for as a royalty fee truthfully, except I do remember reading about one company (might have been Top Flight) who cancelled development of a P-38 model because of this very fee, and how they didn't think it could make any money after paying said fee. As for the trademark issues.. the law is the law, and people need to follow the laws regardless of how much or how little actually money might be involved. So while it may suck that Lockheed is pursuing this, it IS within their rights IF they hold the trademarks. And yes.. in my opinion it does suck.

RE: Royalties for models
 

Here is my completely uneducated take on the subject:
I build models of full size airplanes. Until recently it was okay to build a likeness of another companies' products. What has changed is that companies now attach some value to their corporate logos/products and want to sell that name, or want licensing agreements to protect that logo/product. What is silly about all this is that men in suits who push papers around will kill off my desire to build scale models or, cause the
market for scale model products and kits to go away, and that makes me mad. I suspect those who demand licenses know fully well that paying the fee will result in no profits and removal of the model stuff from the marketplace which I believe is the aim.
I used to like building plastic models of airliners but because of this stuff I can't buy custom decals anymore. Another cottage industry killed by the men in suits. I work for an airline and discussed this with our legal staff and there is no turning back.

Someone should tell Goodyear to require Lockheed to buy a license to put their tires on the F16....they may want to review the quality of that product before their good name gets tarnished.
Paul

RE: Royalties for models
 

Paul,
I don't think that they're out to "get" model companies or modelers, the just don't care.
It's all about the money; if some small business can't pay the royalty, too bad. If TF can't/won't pay for the P-38, it doesn't matter to LM that the kit is not going to be produced. Instead of someone in power saying we'll charge a token amount for the license because it would be good advertising/ good will, etc to have our name on a plastic kit, or decals, etc, it's not going to happen because the bean counters and lawyers are running the show. The days when the officers of an aircraft manufacturer or airline had first hand knowledge of aircraft and/or operations are long gone, people like Walter Beech, William Piper, Seversky, Rickenbacker at Eastern
It's just the way it is and it's not going to get any better.
I remember when Southwest had a 737 with a SIMPSONS livery; I can't imagine the paperwork that went into getting that deal and the decal sheet that was available for a short time.
BRG,
Jon

RE: Royalties for models
 

I'm sorry but where did you come up with this little fact. I looked all over Google and couldn't find anywhere that said the companies didn't care about the modelers. Are you telling me that the companies like Boeing, LM etc are lying when they are saying that they are doing this to make sure their IP doesn't become misrepresented??? I would rather trust their story over yours. Somehow they managed to convince 10's of thousands of people to work with them and to have big gov't contracts. Usually when you have something like this, it takes integrity and truth to get you there.

FYI: More and more companies are losing the suits these days. Now execs are becoming more casual and even wearing jeans and polo's to their offices, so what are you going to call these intelligent, college educated, hard working, leaders that once wore a suit to work, after the suit is gone completely? Heck maybe they are dressing down so that the slaves that do the back breaking work for the company can't see the master of the house coming when it comes time for a good whipping.

Damn those guys those pencil pushing suits!! ALL OF THEM!! Those lousy no good brainiacs!!!!

RE: Royalties for models
 

Man, where do you get this stuff? Just huge generalizations about how "greedy suits and bean counters" are running the show, and you NEVER really hear what is really going on. No matter what, nothing is going to change your mind, I guess.

Like you saying Dave Brown hates jets. Something you overheard and misinterpreted some years ago.
I had dinner with Dave Brown recently. Straight from the horse's mouth: DAVE BROWN DOES NOT HATE JETS. He feels he has a responsibility to regulate the risk with them so as not to jeopardize the membership at large. That's it. He's a modeller, he thinks jets are cool, just the same as everybody else. No matter how many times I say this, you will still come back with "DB hates jets and wants to ban them." I give up.

They DO charge a "token amount" to small companies. And a more profitable amount to more profitable companies. LAst I looked, Revell/Monogram, Tamiya, and Hasegawa, were large, profitable companies, set up not for the joy of modelling in someone's basement, but to make MOOOLAH! NONE of them are registered as non-profits. If you want to go make a cottage industry licenesed P-38, ask EMI, you will probably find it's pretty much a token fee.

"I remember when Southwest had a 737 with a SIMPSONS livery; I can't imagine the paperwork that went into getting that deal and the decal sheet that was available for a short time."

I can imagine it exactly. About a thirty page document, mostly boilerplate, with some amendments and changes to reflect the particualar product. The document would clearly state how the Simpsons IP would be used, how it must not conflict with other extant licensees, very specific stuff.

And it would one of perhaps 2500 other similar agreements signed by the owners of the IP rights, relating to the exploitation of the Simpsons charachters, for T-shirts, Butterfinger commercials, bobble-head dolls, McDonalds Happy Meal toys, kitty collars, pens, etc...
All of whom sell based upon the added value of the Simpsons intellectual property. Just like a decal sheet would. Would probably sell at a ten to one ratio over regular livery decals.

RE: Royalties for models
 

How did Dave Brown get into this conversation?
Geeezzz....

RE: Royalties for models
 

Because it's like you think if you keep saying something often enough, you think it is going to be true. This is not a "conversation", it's really simultaneous monologues, isin't it? Not a thing in the world is every going to move you from your preset position from the start, that it's all just corporate greed. Been there, done that, with DB with you.

RE: Royalties for models
 

Wow...We have definitely identified both side of the coin.
Trademarketing Resources Inc. is the exclusive licensing agent for Pratt. They are very much aware of all of our activities and the catagories that we are pursueing for potential licensing. They must approve everything before we do it. Please rest assured that Pratt has no intention of personally trying to enter the hobby industry. (They already provide products of scale for the Military and Space exploration) They could be the only hobby manufacturer for every product and still wouldn't make the money one government or commercial contract brings in for thier primary business. So tons of money is not licensings goal.

The reason large corporation contract with firms, like ours, is because they want to focus on what they do. They also understand the they have a valuable intellectual property that is being under utillized. Proper licensing is a way for Pratt to increase the utillization of their mark, increase protection of their mark, AND allow the fans of their mark to enjoy it while minimizing risk. If "Large Corporation" didn't care about other markets they wouldn't even consider licesing, they would simply forbid anyone from using their marks...period.
Licensing is a middle ground that allows others to take advantage of the incredible equities that have been built up after BILLIONS of dollars and DECADES of time. It doesn't make sense to say that the Corporations don't care if when they do take the time to figure out a way to make the use of their marks legal for others. Sometimes the royalties do make it so the product is not worth making, but this is not the goal of licensing company or the Licensor. What money is made by anybody if the product it never made? So to call a company willing to license one of their most valuable assets (their identity) money grubbing in one breath and say they don't care in next is just silly. For the most part royalties are set up in a way so that the licensee can be successful not put them out of business. In the case of Lockheed and now Pratt....the pressence of tons of infringing product made the thought of passing on royalties to consumer almost impossible, hence many just stopped making the product. But once it is under control the companies that hold licenses control the market for their product...there is no better barrier for competition than the need for a license.

As far as the support that the Licensor provides the Licensee, it is true that it is difficult to spend more money supporting a licensee than what the licensee is bringing in in royalties. But a license should be a longterm relationship, the last thing a licensor wants is for a successful licensee to fail. Therefore, all of the Licensors that I have worked for are more than happy to provide any materials that would help a licensee become more successful. Another reason the Licensors have firms to handle the relationship with licensees.
As far as JoeJet...EasyTiger hit the nail on the head. NO product will carry the P&W name unless it is the best....especially anything having to do with power plants.

I know it will be an up hill climb early, but our goal (my job) is create a complete line of premium aviation hobby products under the P&W name. The hard part is finding manufactuers that understand the concept and have product worthy of P&W.
Also, Thank you to all that have offered their suggestions as to potential licensees and catagories to pursue. The response to this concept as been great. The interest is defnitely there so hopefully some product will soon follow.

Nate

RE: Royalties for models
 

Nate,
Thanks for trying to educate guys like me who have some frustration and mostly emotion to go on.
There seems to be a contradiction that maybe you can clear up for me.
If the goal is to capitalize on a corportate identity then it seems you'd want to encourage the licensing. But if you
want to limit liability or control a brand use by restricting where its used then you want to discourage licensing by putting the bar up high. Are you trying to make money or prevent a jury award because a kid swallowed a toy plane with a Pratt and Whitney sticker on it?
Paul

RE: Royalties for models
 

Hi Nate,
Let’s take the Top Flite P-38/LM as an example. TF has been around a LONG time and has well deserved reputation of producing quality kits. There is no question that if they were to produce a P-38 it would be a quality product and would be a good seller. TF also has a price range that they have to sell the kit for and they are somewhat constrained in their ability to negotiate with LM. LM evidently came up with a number that was too high for TF. You would think that LM, or their reps, would be aware of TF’s reputation and say something to the effect that we want our name out there, TF is a class company, let’s make it happen. Instead, it seemed it was a take it or leave it proposition, and as you mentioned, both sides lost. It seems the fee was more important than granting the license. This is exactly what I meant about money being the driving force behind these decisions. IMHO LM doesn't really care if a model gets produced or not, if you can afford the fee, great; if not, oh well. I’m not sure if this is an isolated case or not. It would be interesting to know the percentage of licenses applied for vs number granted.
Before the attacks begin, the above is what I understand happened from the info that’s available. I did not attend the meetings, see the minutes, talk to anyone on either side, etc.
Anyway, I want to thank you for taking the time to posting on this thread; I found it to be very informative.
BRG,
Jon

RE: Royalties for models
 

I looked into working on a 1/7 scale model of the F-35. I contacted LM and was told to contact their marketing group EMI. EMI wanted me to go through the process of making the molds producing a kit and then send them a finished product. It is at this point they would approve it or not. When I asked EMI for accurate drawings they were not sure how to get them. The intial price quoted for the privilage to produce a F-35 seemed fair. Then things started to change. They needed money to cover the cost of research on LMs part for drawings. The % they wanted per model increased 3 different times. It finaly came to the point I could no longer afford to make a kit of the F-35. Maybe it will be made in China where they don't worry about licenes.

RE: Royalties for models
 

That's what happens when you get a "licensing" company involved. Sure LM doesn't *need* the relatively small amount of money (compared to a $150M Raptor) that would come from this, but the "licensing" company does - otherwise, not being capable of actually producing anything themselves, the ones in charge of such an entity would starve...

You can justify this with talk of "risk" and "reputation" all you want, but if somebody didn't think they could line their pockets at someone else's expense, this wouldn't be happening - period.

Bob

RE: Royalties for models
 

Bob,
That is it exactly!!
There was a time when all some one had to do is get hold of the PR dept and they would bend over backwards to help.

RE: Royalties for models
 

What was the cost?

RE: Royalties for models
 

Marty,
You're so right.
Many years ago I wrote Hawker about the Tempest, one of my favorite airplanes, to get some info on the landing gear and cockpit.
The best I was hoping for a couple of pictures. A month later I get this large package from Hawker of engineering drawings of the l/g assembly, tailwheel and cockpit layout. Someone at Hawker sure went out of their way to get me this information.
Guess those days are gone forever.
BRG,
Jon

RE: Royalties for models
 

Sorry but I don't buy it. I did the exact same thing you are talking about with Scaled Composites for a model version of SpaceShipOne. They did want to see the finished product too, but you didn't have to make molds, you could make a built up version and show them that. Heck you could have made an all foam version and covered in glass too. They just want to make sure the planes shape is represented properly and their logos and other trademarks are in the right place and right shape on the plane. Yes, even the fonts you use for any text on the plane must match. They don't care what goes on the inside, only the outside and shape is trademarked.

I mean what did you expect? How do you expect kit/arf anything, even if you are just thinking about it, without first making a flyable version or model version to get all your R&D information like, flying, costs, measurements etc. That's the way ALL RC manufacturers work when they are prototyping for a production model.

Try again. First person to distribute it in the States or even another first world country will be getting a nicely written letter from LM telling them to pull it from their shelves or the next letter they will receive will be an injunction. They don't have to go to the Chinese if they don't want too, they can just go to the distributors instead! Chinese hardly sell anything direct to consumers.

If you want to kit/arf this product, I suggest you seek legal professional assistance. It's not as difficult as you think it is, nor costly, but it does cost. You have to invest hundreds and usually thousands of dollars to kit/arf any model airplane, whether you design it or have borrow someone else's design. This is why you sell it for profit and make your money back and then some.

It seems that you and many others in this thread and AMA forums are making LM/Boeing look like the bad guys because they go about their business professionally and thoroughly. I can assure you that they have nothing against "the little guy", they just have their procedure and it does not matter if you are Joe's Hobby Garage or Mattel Toys, you get equal treatment. Welcome to the toy industry!

RE: Royalties for models
 

Listen, you weren't involved in the deal, so don't tell the guy what EMI did, or didn't want. The bottom line is every cent of the development of the F-35 has already been paid for so LM should look at the development of a model of it as free advertizing to the public who has now to foot the bill to buy the thing and leave it at that. If Boeing wants to keep a close reign on the likeness of the Dreamliner, that's a different thing, but I already paid for the development of the C-17, so if I want to by my kid a model of it, I shouldn't have to pay Boeing AGAIN for the privaledge of doing so. On the other hand, if you talk to the European supporters of Airbus, they'll tell you that, in their opinion, we paid for the development of the Dreamliner TOO when we bought the C-17, so maybe I should be entitled to a likeness of that as well.

And who in their right mind would go through all the cost and time to develop a kit of an airplane only to be told by some marketing weenie that they want $1000 a copy (probably 80% or so of which goes into their pockets, not back to LM) before they can sell it. Any good business person would want to know the deal up-front!

What you call doing business "professionally and thoroughly" most here seem to think is yet another sad example of corporate greed. In my opinion, there is no way that any US individual or company like Top-Flite/Great Planes, should have to pay a company like LM, EMI, or anybody else, dime one to make a model of a fighter aircraft designed and produced in this country - we've already paid for it many times over, and that's it.

Bob

RE: Royalties for models
 

There's no contradiction, in most cases licensing allows both, the ability to extend a brands usefulness and reduce liability by knowing what is on the market and being able to review and approve the products and their packaging. I know it sounds strange to say the more products with the brand or mark on it can reduce liability, but their are certian criteria that licensees have to have in order to become a licensee, for example insurance. P&W liability is reduced because they know the licensees have insurance and they have a contract that explains the relationship between P&W and Licensee. So it's better, liability wise, to allow use under a license vs. ignoring the use even if there is little money to be made.

Nate

RE: Royalties for models
 

And you don't think that taxpayers paid for the development of the Dreamliner? Many or most of the technology advancements in aviation for both gov't and private industries were partially paid for by the development of gov't contracts. Do you think every penny for the X-35 went to the X-35 and only the X-35?? The money and technology is distributed throughout the entire corporation to not only build better fighter planes but also better commercial planes. So what would be the difference of a JSF or a Dreamliner if you were looking for a license which was partially funded by the gov't. The point is that the gov't does not own any trademarks for these planes and you just don't get what you THINK is yours. If I thought it was mine, I wouldn't want a license to build it, I'd want a set of key so I could fly one.

And I will certainly find out if EMI requires the production model or a production likeness model for their evaluation.

$1000 a copy where did you come up with this number????? Corporate greed, give me a break. How about amateurs who think making a buck is easy to do.

Well you know what they say about opinions.

Here is a list of successful companies that think much different then you do as far as LM being this "greed machine". Officially licensed users of LM name brand. All of which that took the time to follow LM procedure to reap the benefits of selling their products with LM name brand. You get nothing in life for nothing.

http://www.lockheedmartin.com/wms/fi...i=16351&sc=400

RE: Royalties for models
 

The whole "the planes belong to the people" argument. Wish it would hold water in the real world, but it does not.
Evidently, there was an agreement made, a very clear one, between the United States Government and Lockheed that assigned the rights specifically to the company, not the Government, or we would not be HAVING this conversation.
Don't like it? Tell the government that you want these rights retained by the government, next time we ask someone to develop a plane for us.

Your saying "that's it" and fervently beleiving that you are in the right(many people share your opinion) does not make it any more right. The law says otherwise, Lockheed and the US Government say otherwise.


"And who in their right mind would go through all the cost and time to develop a kit of an airplane"


Well, let's see...Tamiya, Hasegawa, Cox/Estes, Monogram/Revell...the list goes on and on....

" only to be told by some marketing weenie that they want $1000 a copy"

Where on earth do people get these figures? Out of thin air. The ONLY person who EVER mentioned 10% retail is F106, and he has NO IDEA OF WHAT HE IS TALKING ABOUT. I talked to EMI and got some real figures, it's NOTHING like what people have been crying about. Nothing. That certain balsa company that licenesed the Lightning paid a FEW HUNDRED DOLLARS. And then they wanted full engineering drawings, photos, all sorts of junk. They had to be KIDDING! The plastic model companies pay(typically) 6% of wholesale. That $15 plastic model sells at "keystone", 50% markup at the hobby retailer, and was already marked up 40% by the wholesale distributor, so it pays 6% of $4 or so. Twenty-four cents. Price of oil goes up, it certainly effects the price of plastic MUCH more.
Why on earth would anybody sign a deal for $1000 per kit? Who benefits from that? NOBODY would agree to those terms. So even EMI does not make anything. Why would they ask for such an absurd number? Where do you hear of any such incidents actually happening?

" (probably 80% or so of which goes into their pockets, not back to LM) before they can sell it."

All true. L-M probably makes diddy from this kind of thing. Licensing firms do well!

"Any good business person would want to know the deal up-front! "

Well, yes. Two-way street. Were I L-M, I would positively want to see a prototype before my name goes on it. If you can't show them some sort of prototype, maybe you are not in a financial position to be a responsible, quality licensee of the kind LM wants to represent their name. This is pretty standard stuff. BMW wants to see the t-shirt or die-cast car you make BEFORE they grant the license.

Would you rather the rights be retained by the govenment, so that the taxpayer has to administer this?

RE: Royalties for models
 

This could be completely true I don't remember the situation. I doubt it was as bad as "take it or leave it". I don't know the numbers so for all I know TF wanted it for free and EMI want them to pay. So it's hard to say what the real story is, but it is business and sometimes deals are not done. Sometimes Licensors hold a lot of power....you want a Corvette license?... it's going to cost you a lot...very little in the way of negotiating. The level of compromise is going to change with every situation. Compaines like LM and Pratt do enjoy the products they see their marks on, but they are not going to let people use them for free. Another thing that may of happened in the TF case is that EMI already got someone under license, now they have a little more take it or leave it power. If TF doesn't want to agree to the deal then fine...that is one less competitor (P38 kits) for the licensee to have to compete against. It can be a very difficult balancing act and another reason why firms take care of it. It is also the reason I've been speading so much time in the forums and websites. I need to better understand the aviation hobby market in order to do my job for P&W.

As far as the number of licenses applied for vs. granted it changes based on the product, the manufacturer, property, and sometimes current events. As licensing agents we have a responsibility to our licensees not to over license and create too much competition. I'm not saying that this is never done....there are plenty of bad licensing agents out there or just mistakes that are made. If a single licensee can cover the market for a product(s) then seldom is their a need for another. This is very rarely the case...Usually you need multiple licensees to cover markets geographically, multiple price points, and just product selection in general. So there is no number for applied vs. granted. In reality it is much more proactive, people like me are calling manufacturers to discus these concepts...we are not sitting around the phone waiting for them to call us wanted a license. It is nice when it happens though! Therefore if it gets to the application stage then they mostl likely get a license.

Nate

RE: Royalties for models
 

The problem is that the toy/model industry is a business, a big business. Not just any kind of business either, but a luxury business. Too many people in the RC business and the people around it think of it as a charity business, but it's not. It's no different then any other business and with any other business takes procedeure to develop and bring to market a product. You just don't wake up one day and say "I think I'll copy a JSF and have it produced in China real cheap". You have to create a plan, a business plan with a strategy that keeps you profitable. It takes lots of time, lots of money and mostly lots of long hours with sleepless nites.

Also the most important piece of staying successful in the RC industry, remove some of the personal feelings, not all of them but some of them. I'm sorry rhklenke, but your entire rant is based off of personal emotional side of your brain, not the professional side.

RE: Royalties for models
 

What he said!

I have no idea what transpired between TF and LM over a P-38 kit. Remember this: Top Flite is part of Great Planes. A very large and profitable company. Not a bunch of hobbyists working out of there garage, not by a long shot, but a FOR-PROFIT business. And they wanted to make a PROFIT using someone else's image. A generic twin would not sell NEARLY as well as a Lockheed P-38. Doubt if the license fees were that heinous at all.
My GUESS is that TF is just moving away from kits, because they don't sell very well anymore.
I notice they had no problem making a "Profile-38" and dodging around any copyright issues altogether.
My guess is that they just decided that there is much better money in ARFs, that the kits don't do nearly as well as they used to. But only TF knows.