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The End of Semroc?
We received a disturbing packet via courier today. It was from DrinkerBiddle & Reath LLP, representing Hobbico Inc. and Estes-Cox Corporation. It states that it has copyrighted their designs over the years and we are violating copyright and trademark law by replicating any "pictorial, graphic and sculptural elements" of their designs.
They say they own any design pictured in any publication they distributed throughout the years. They single out 17 from their 1974 catalog as an example. I understand how they own the pictures for the Laser-X, Starfire and others, but they also say we have to stop making the Little Joe II, Arcon and Aerobee-350, since they copyrighted them as well. Also in the same catalog were the Saturn 1B and Saturn V as examples of "well-known and popular copies of existing spacecraft." They mention our plans to sell additional models subject to these and other Estes-Cox copyrights. They also state that we use their logos in a manner that implies authorization, affiliation, license and association with them. Evidently, we have not been clear enough over the years that we did not have anything to do with Estes-Cox. The complaint is broad enough to cover any products they have depicted in the photos in their catalogs. This would likely include their nose cone shapes, body tube design, rings, chutes, launch lugs, and most of the other 2200 parts we have online. Since most of our revenue comes from parts sales, that would kill us as a company. If they think they can copyright a Little Joe II, then they certainly can "copyright" a BNC-60L design. From my discussions with an attorney in the past, this complaint is without basis. The intention of the copyright law is not to stifle commerce by allowing a company to copyright a picture of a product and prevent anyone else from reverse-engineering and improving the original product. We have been careful over the years to avoid patent infringement, trademark infringement, and copyright infringement. We do not know how this is going to play out. I do not respond well to bullies. If they do pursue this and drive us into bankruptcy, it has been a fun ride for all of us. It is futile to defend ourselves against a company that Barry Tunic estimated to be two hundred times our size. It is even more so to go against a company that owns it that is thousands of times bigger than us. We cannot afford a lawyer; we cannot even afford a good meal for a lawyer. The amount of money we have taken in over the years is miniscule, believe me! They just want us to go away. We have been content for the last eight years snacking on the “crumbs” they were not interested in keeping. Our mission has been to provide the models, parts, and services that they were not interested in providing. We will not re-kit any of the “infringing” products until this is resolved. We have until August 19, 2010 to “resolve this difference amicably,” so when the existing stock is gone, it will probably be gone. It is hard to go out of business “amicably.” Thanks to all our friends for everything you have done for us!
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Carl McLawhorn NAR#4717 L2 semroc.com |
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It could very well be to resolve it amicably, you opt not to contest and admit their copyrights, but nonetheless agree to operate within limits they "permit".
Since it is clearly true you are tiny and not competitive from a business perspective, their motive is clearly to not forsake any rights they would have so long as they enforce them. You should give them what they legally need, by saying without specifically what you are referring to, that you presume many of the items you sell either violate their property or confuse the consumer you might be. You should come up with a mutually agreeable "disclaimer and admission" that you in no way make claims to such ownership, but that you simply sell parts and kits that resemble the wonderful work they do/did and in the event they release a "similar product" on a mass basis they reserve the right to ask you to withdraw that particular product from market for the period of time Hobbico is actively selling it. One thing you could do is volunteer to pay a license fee, perhaps 5% of net, to Hobbico as an active and ongoing admission of their property rights. It wouldn't be much money, but it would have the legal standing they require. Barry said in his YORF interview he was simply not enforcing against you but declared you in violation and reserved the right to sue. That public claim is another variant from the technique Hobbico used. My advise is to make a license offer along the lines of what I just said. What nobody wants to see is Estes lose their rights and a cheap, crappy Chinese clone come out of Tridents and Interceptors and Goblins and everybody lose out. One thing I know about you and everyone here, we all love Estes and wish Hobbico the very best. Your niche seems to be a cross between "after market" and "tribute". Jerry |
#3
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I sure hope you can resolve this Carl, you and your family are some of the best people in the industry
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Did the chicken really cross the road, or did the road move beneath the chicken? Albert Einstein You Can't break the laws of physics but they can break you. Christine McKinley Dale Greene Mentor, Penn Manor Rocket Club VISIT SPAAR 2010 Calder Cup The Old West 2009 Calder Cup " Speaking the Truth in times of universal deceit is a revolutionary act. " George Orwell |
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Do different parts types and construction techniques provide enough separation between prior designs and your work? FSI and others are not covered by the Hobbico claim. You could, if capital permits so the SLS route with a fair number of the designs and probably be far enough off for protection. If necessary, the royalty route may be the way to go with a nominal payment per kit that you could pass on to the buying public.
Estes/Hobbico would be destroying the recent goodwill that they have created over new engine releases and old kits if they tried to put you out of business. Malcolm Smith NAR & TRA L2 |
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In addition to the license agreement they may also be wiling to offer you a wholesale purchase agreement that puts you in a favorable position for niche retail sales of in-production Estes product over the internet.
Jerry |
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I'm at a loss of words. Where is GH?
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Don NAR 53455 "Carpe Diem" |
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Carl, I was really hoping you would have been contracted by Estes to produce balsa parts, I guess that is not going to happen. You have done so much over the years for this hobby that I cannot thank you enough. I hope you get through this and Hobbico comes to there senses. Good luck, our prayers are with you.
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This is a most unpleasant turn of events.
I hereby declare a moratorium on the purchase of Hobbico and Estes products (rockets, motors, planes, tools, etc.) on my part until this particular issue is favorably resolved. Who's with me?
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Kit (aka Cranky Kong) I'm just a roadie for the banned... |
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I AM!
I just returned from NARAM 52 yesterday. Carl, Sheryl, and Bruce are the friendliest people that I've ever met. Why Hobbico would do this; knowing that model rocketry is a niche market is beyond me. Looks like an order is going to be underway tonight! Bob
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illegitimi non carborundum NAR# 54643 L-1 SAM# 043 AMA# 157091 VRCS# 154 A&P# 42x xx xxxx. Last edited by Blushingmule : 08-12-2010 at 10:33 AM. |
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Quote:
Count me in. |
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