Lionel statement to dealers 6/22

[Anonymous]

From now on, I'll get my O gauge information from CTT. People are much more rational here than at OGR.

M. DONALDSON

[nblum]

I posted this on the OGRR Forum, but for those who don't follow that forum, and in the hopes of getting some legally cogent comments:

The judge currently has before him motions from defendants Lionel and Korea Brass/Mr. Yang. Lionel's motion of June 10th was, primarily, to dismiss the case or direct a verdict for the defendants, on grounds outlined in their brief. Korea Brass and Mr. Yang made similar motions on June 17th, in particular on the grounds that the court lacks jurisdiction to enforce Michigan state law on a Korean company such as Korea Brass. They also argued that the designs and drawings in question were "readily ascertainable from public information," that the "plaintiff failed to institute adequate security measures.." and thus the materials "do not constitute trade secrets." They further argued that "plaintiff failed to present evidence that defendants..knew or had reason to know that designs and drawings were taken or used.." and that "plaintiff failed to provide evidence that "MTH 2000 Production Schedule" was an an MTH production schedule having any value.."
Perhaps the legal eagles can comment on whether there are what the likely chain of events will be from here.

[Kooljock1]

M.DONALDSON,

You're slipping...your caps-lock key actually got turned off on your last post! Looks good. You should do that more often....

And while this is a very nominally censored forum, we still try to avoid bomb-throwing. Welcome.

Jon [8D]

[Anonymous]

A directed verdict is automatically made by the defense to give the judge an opportunity to review the jury not-with-standing their verdict. As the jury is the tryer of fact, in most cases it is unlikely that the judge will over-rule the jury verdict UNLESS he feels that they have based their verdict on no real facts but emotion. In complex litigation such as this, it can happen that the judge will overrule the jury. It is less rare in IP or complex cases, but still rare.

SURVEY SAYS: actual surveys of jury verdicts compared to how the bench would rule are very close, except in complex litigation. But don't count on that swaying a judge.

JURISDICTION: Well KS does have a point here, unless the judge is convinced that they made use and had some contacts with the forum state and/or Michigan has a long-arm statute. IF a defendant takes advantage of the forum to make money, let's say, then you are subject to jurisdiction of that state because you had some contact with its residents ; EXAMPLE: insurance companies may have their office and are operating in one state, but are subject to all states that they have their salesman call to sell insurance to the residents of.

Assuming that KB's contract with LIONEL doesn't have a jurisdiction clause, then KB may be just indirectly having contacts in Michigan thru Lionel and therefore have no actual contacts with the residents of the forum state; Michigan. However, then Michigan's long-arm statute would kick in. The long-arm statutes common in most states creates super-jurisdiction over ANY contacts with its residents not just significant contacts. (I'm not up on Michigan Law so I don't know if Michigan has a long-arm.)

TRADE SECRETS require adaqute protection of information to be considered trade secrets. Supposedly only three people in Atlanta know the Coke recipe that if varied slightly changes the taste. Ok so what did MTH do to protect the designs. This should have been presented in court. But remember FRAUD is harder to catch than Thievery. You can lock up a design and put it in a vault, but you can’t prevent someone from taking it beforehand or by slipping it into his underwear or shoes to foil a search or emailing it in an innocent email to a competitor. The depositions of KB’s employees indicated that they just made copies on their computers and carried the CDs out the door. Doesn’t seem like much security was in place or that MTH took steps to lock up the designs.

TRADE SECRETS or in the public domain?? Well here MTH has no problem. Even though anyone could have obtained an old engine blueprint or pictures and/or read the measurements and then scaled them down and then decided which pieces would be brass, plastic or steel and what size screws to use, weld or rivet and which parts to press-fit and which to cast and the size to make them so that they shrunk after cooling to fit, and the colors to use and you see the point. It takes a lot of work to design miniature complex parts even when you have complete blueprints of the original. That is what MTH owns and the final parts design and production was clearly not in the public domain.

TAKEN or did Lionel look the other way. I have answered this on other threads. Lionel knows production schedules. It must in order to effectively plan the marketing and to put the item in the catalogue or a flyer. So when instead of 8 months of R&D, KB comes up with a design in 2 weeks, ( I'm just making these times up) LIONEL has to be suspicious of the originality of the work. It has an obligation to ASK. It didn’t ask, so Lionel’s guilt is just presumed.

In so far as the effect on MTH’s production schedules, well here again MTH provided forensic accounting witnesses to show what was lost. That may have been taken by the jury in many ways because accounting is complicated, so the judge may have a lot of elbow room here to reduce the amount.


Alan

[garyseven]

AlanHN ponders:
"(I'm not up on Michigan Law so I don't know if Michigan has a long-arm."

Michigan has a "laundry-list" type of long-arm statute.

[Anonymous]

QUOTE: Originally posted by garyseven

AlanHN ponders:
"(I'm not up on Michigan Law so I don't know if Michigan has a long-arm."

Michigan has a "laundry-list" type of long-arm statute.

A laundry list & a long arm? Must make reaching for the bleach easier...[:D][:D][:D]

Tony

[garyseven]

Tony
That was great! LOL I think they get 'em free in every box of detergent.

[3railguy]

I am pretty convinced now that Lionel was framed by the Korean maffia. The discs and blueprints were planted in Lionel's offices by the night janitor. According to RM, the MTH schedule was not authentic.

[Anonymous]

I was struck that MTH in their statement claimed lost profits of $12.0 million and lost future profits of $13.8 million -- considering the small runs on these locos, MTH must be making 500 or 1000% profit and gouging the collecting public. Maybe they should reduce the prices on their Asian made products 50 to 75% or move manufacturing to the US!! At their admitted profits, they could manufacture here in the US and still make money!