Fallen flag
Encyclopedia
A fallen flag is a North American railroader and railfan
term referring to railroad company no longer in existence due to bankruptcy
or merger.
merger, which produced the Burlington Northern and Santa Fe Railway). At one time there were over 140 Class I railroad
s operating in the U.S. (at the time a railroad was given Class I status if it earned at least $1 million in revenue annually).
As an indication of the level of consolidation that has taken place, only four Class I railroad
s (then, railroads with over a million dollars in income per year) from before the Great Depression
still exist under their original names, these being the:
However, as railroads merge or buy each other, duplicate and less profitable rights of way often are sold to new short line railroad companies. Yet, even these short lines themselves merge and buy each other, creating even more fallen flags. For example, many of the former Milwaukee Road branch lines in southern Wisconsin
were sold to a railroad called the Wisconsin and Calumet Railroad
(WICT). The WICT is now itself a fallen flag, its rights of way now operated by the Wisconsin and Southern.
s of the old name in order to collect royalties
from model railroad manufacturers. However, this violates trademark law
, which requires that marks actually be used by the owner in order to remain protected and not fall into the public domain
.
In order to prove that the historic trademarks are still enforceable, some railroads have begun painting pieces of rolling stock in the liveries of their constituent railroads. Whether this is sufficient to prove that the marks have not been abandoned has yet to be decided in court.
Two railroads, specifically Union Pacific and CSX Transportation
, have filed suits in U.S. court to prevent the use of their trademarks or their historic trademarks by model manufacturers without first obtaining a license to reproduce the marks. The licensing agreements that the railroads offer include conditions that many model manufacturers feel are excessive in scope or monetary value. Some model manufacturers have signed licensing agreements while others have refused on principle or simply closed their business. Model manufacturers argue that the historic trademarks have been out of use so long that they are abandoned and therefore available to use freely. Courts have yet to decide on these issues.
Railfan
A railfan or rail buff , railway enthusiast or railway buff , or trainspotter , is a person interested in a recreational capacity in rail transport...
term referring to railroad company no longer in existence due to bankruptcy
Bankruptcy
Bankruptcy is a legal status of an insolvent person or an organisation, that is, one that cannot repay the debts owed to creditors. In most jurisdictions bankruptcy is imposed by a court order, often initiated by the debtor....
or merger.
Background
The U.S. railroad industry has been consolidating since the 1950s, and almost every year sees the list of operating roads shrink. Most railroad companies that once existed have either closed, been assimilated by a larger company, or participated in a "merger of equals" in which neither company's name survived unaltered (an example of the latter being the Burlington Northern / Santa FeAtchison, Topeka and Santa Fe Railway
The Atchison, Topeka and Santa Fe Railway , often abbreviated as Santa Fe, was one of the larger railroads in the United States. The company was first chartered in February 1859...
merger, which produced the Burlington Northern and Santa Fe Railway). At one time there were over 140 Class I railroad
Class I railroad
A Class I railroad in the United States and Mexico, or a Class I rail carrier in Canada, is a large freight railroad company, as classified based on operating revenue.Smaller railroads are classified as Class II and Class III...
s operating in the U.S. (at the time a railroad was given Class I status if it earned at least $1 million in revenue annually).
As an indication of the level of consolidation that has taken place, only four Class I railroad
Class I railroad
A Class I railroad in the United States and Mexico, or a Class I rail carrier in Canada, is a large freight railroad company, as classified based on operating revenue.Smaller railroads are classified as Class II and Class III...
s (then, railroads with over a million dollars in income per year) from before the Great Depression
Great Depression
The Great Depression was a severe worldwide economic depression in the decade preceding World War II. The timing of the Great Depression varied across nations, but in most countries it started in about 1929 and lasted until the late 1930s or early 1940s...
still exist under their original names, these being the:
- Union Pacific RailroadUnion Pacific RailroadThe Union Pacific Railroad , headquartered in Omaha, Nebraska, is the largest railroad network in the United States. James R. Young is president, CEO and Chairman....
- Kansas City Southern RailwayKansas City Southern RailwayThe Kansas City Southern Railway , owned by Kansas City Southern Industries, is the smallest and second-oldest Class I railroad company still in operation. KCS was founded in 1887 and is currently operating in a region consisting of ten central U.S. states...
- Canadian National RailwayCanadian National RailwayThe Canadian National Railway Company is a Canadian Class I railway headquartered in Montreal, Quebec. CN's slogan is "North America's Railroad"....
- Canadian Pacific RailwayCanadian Pacific RailwayThe Canadian Pacific Railway , formerly also known as CP Rail between 1968 and 1996, is a historic Canadian Class I railway founded in 1881 and now operated by Canadian Pacific Railway Limited, which began operations as legal owner in a corporate restructuring in 2001...
However, as railroads merge or buy each other, duplicate and less profitable rights of way often are sold to new short line railroad companies. Yet, even these short lines themselves merge and buy each other, creating even more fallen flags. For example, many of the former Milwaukee Road branch lines in southern Wisconsin
Wisconsin
Wisconsin is a U.S. state located in the north-central United States and is part of the Midwest. It is bordered by Minnesota to the west, Iowa to the southwest, Illinois to the south, Lake Michigan to the east, Michigan to the northeast, and Lake Superior to the north. Wisconsin's capital is...
were sold to a railroad called the Wisconsin and Calumet Railroad
Wisconsin and Calumet Railroad
The Wisconsin and Calumet Railroad was a Class III shortline railroad that operated in the southern portion of Wisconsin and northern portion of Illinois from 1985 until 1997.-History:...
(WICT). The WICT is now itself a fallen flag, its rights of way now operated by the Wisconsin and Southern.
Historic trademarks
In the case of a merged or purchased railway, the new owner sometimes attempts to enforce the trademarkTrademark
A trademark, trade mark, or trade-mark is a distinctive sign or indicator used by an individual, business organization, or other legal entity to identify that the products or services to consumers with which the trademark appears originate from a unique source, and to distinguish its products or...
s of the old name in order to collect royalties
Royalties
Royalties are usage-based payments made by one party to another for the right to ongoing use of an asset, sometimes an intellectual property...
from model railroad manufacturers. However, this violates trademark law
Law
Law is a system of rules and guidelines which are enforced through social institutions to govern behavior, wherever possible. It shapes politics, economics and society in numerous ways and serves as a social mediator of relations between people. Contract law regulates everything from buying a bus...
, which requires that marks actually be used by the owner in order to remain protected and not fall into the public domain
Public domain
Works are in the public domain if the intellectual property rights have expired, if the intellectual property rights are forfeited, or if they are not covered by intellectual property rights at all...
.
In order to prove that the historic trademarks are still enforceable, some railroads have begun painting pieces of rolling stock in the liveries of their constituent railroads. Whether this is sufficient to prove that the marks have not been abandoned has yet to be decided in court.
Two railroads, specifically Union Pacific and CSX Transportation
CSX Transportation
CSX Transportation operates a Class I railroad in the United States known as the CSX Railroad. It is the main subsidiary of the CSX Corporation. The company is headquartered in Jacksonville, Florida, and owns approximately 21,000 route miles...
, have filed suits in U.S. court to prevent the use of their trademarks or their historic trademarks by model manufacturers without first obtaining a license to reproduce the marks. The licensing agreements that the railroads offer include conditions that many model manufacturers feel are excessive in scope or monetary value. Some model manufacturers have signed licensing agreements while others have refused on principle or simply closed their business. Model manufacturers argue that the historic trademarks have been out of use so long that they are abandoned and therefore available to use freely. Courts have yet to decide on these issues.