Iowa Pacific’s claim is part of its response to a Jan. 11 lawsuit filed by Rail Events Inc. in Colorado District court in Durango.
Rail Events alleges that Iowa Pacific failed to pay more than $3 million in royalties from Polar Express tickets and branded merchandise.
In its response with the court filed on Feb. 24, Iowa Pacific attorneys deny Rail Events’ allegations. And, as part of Iowa Pacific’s defense, attorneys claim a list of what legally are known as affirmative defense, including that Rail Events “failed to mitigate, minimize, or avoid any damages it allegedly sustained,” and that there was a “mutual mistake” in regards to the meaning of the contract between the two companies.
Iowa Pacific’s response further claims that Rail Events “…charged certain passenger railroads conducting Polar Express events smaller royalty amounts than it charged Iowa Pacific” and “…authorized competing events in a concentrated geographic area. Rail Events’ authorization to conduct Polar Express events in a saturated market detrimentally affected Iowa Pacific’s ability to maximize its ticket sales.”
Court documents do not show what Rail Events charges other railroad operators that license the Polar Express name and brand.
A “master agreement” submitted as an exhibit with Rail Event’s lawsuit shows that up until Dec. 31, 2016, Rail Events would not “authorize another tourist railroad to conduct Polar Express events within the exclusive territories of the [Iowa Pacific] hosts” located in the United States. However, Rail Events reserved the right to revoke exclusivity if Iowa Pacific’s subsidiary railroads did not provide customers a quality experience and work to resolve any complaints.
In their filing, attorneys for Iowa Pacific do not specify which railroads and geographic territories they think included unfair competition. According to a Trains News Wire analysis of news releases and Iowa Pacific’s website, Iowa Pacific operated Polar Express trains in California, Oklahoma, Massachusetts, Mississippi, Texas, and the United Kingdom in 2016.
Seems like a pattern emerging here. Is Ed Ellis just too busy to read contracts?
If you didn’t read the terms of the licensing agreement, specifically the geographic clauses, well … caveat emptor. Seems with IP, it’s always “unfair” when the other party follows the contract. The court will figure it out – they always do.
Would appear to me that they got themselves caught over extended when business slowed and a couple deals soured..
IP is different than most operations, they are a for profit company, not a non-profit heritage line. In my opinion it seems justified,Ma for profit pays more than a non-profit.
Bradley, FYI, According to their Facebook page the Texas State Railroad ran as advertised on Saturday March 4th.
I do wonder about the seeming downward spiral myself. Seems like all of a sudden everything we read about IP is bad, pulling out of the passenger operation in the mid-west, the Polar Express issues, the issues with the Texas State Railroad. Could be unfortunate coincidences, but on the other hand, is it a case of “where there’s smoke there’s fire”?
And the Iowa Pacific downward spiral continues.
Polar Express trains ran in Kingston, NY only two hours drive away from Saratoga Springs, NY as one example.