Murphy's Law: We Want It All


October 29, 2007: In the U.S., Congress is being called on to prevent defense corporations from shutting down production of model kits, films or games that use images of military equipment. Over the last decade, the weapons manufacturers have increasingly demanded payments to allow such depictions.

For over half a century, model 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 targeted as well. The new U.S. Army Stryker armored vehicles were not available for several years because of royalty demands, and this created bad publicity for the vehicle manufacturer. Even World War II aircraft kits are being hit with royalty lawsuits. Some deals have been made, but the royalty demands are seen as greedy and unreasonable by everyone by the lawyers.

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. Foreign aircraft, from manufacturers that have not got the same kind of legal advice, would also remain available. But American 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).

The lawyers also went after film and game producers, but were rebuffed because many of these operations are part of large corporations, who were willing to fight back. The rapacious royalty seeking attorneys backed off there, and kept after the smaller model kit firms. All this is actually in sharp contrast to past practice. For decades after World War II, the defense companies had their public relations departments work closely with the model kit manufacturers, and there was never any thought of demanding royalties. But then came the idea of "maximizing intellectual property" (without considering the side effects) and the lawyers displaced the public relations specialists.

The U.S. House of Representatives is still considering a new law, which would prohibit defense contractors from requiring licenses or fees for use of military likenesses and designations. The Department of Defense opposes this law, as do most defense industry lobbyists. So far, the lobbyists have been winning.




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