LIONEL, QSI, NMRA's DCC and the MTH issues, what are the realities?

[Anonymous]

I went to the CTT forum to see if the actual issues between MTH vs Lionel could be ascertained. It's apparent (per folks at the CTT forum) Lionel stole engineering drawings/information of some sort, of MTH's products. Why Lionel would do this is beyond me, having been in the industry as long as Lionel has, why would they need anyones help bringing a product to market! Therefore I am skeptical.

Then, who can explain the issues between DCC and MTH and QSI and MTH? If you post something here, please attempt to be certain of the correctness of your information. We all need to see these issues with as much light as possible.

Any other real information you have on MTH would be greatly appreciated!

I would like to know if MTH deserves the ill will they are receiving!

[ben10ben]

I posted this in another thread regarding the Lionel-MTH Lawsuit

"Deschane,
To answer your question, here's my best understanding of the case:
1. MTH commisioned Samhonga in Korea to design several of there engines
2. The same person who was commisioned by MTH to design the pieces for Samhonga production was then commisioned by Lionel(at a different factory) to design several simmilar pieces. The production designs were copied from the MTH models to make these.

The allegations, thus, are that Lionel indirectly(with knowledge of what they were doing) stole tooling plans(not engine plans) that allowed them to construct their models more quickly than the MTH versions. I believe that the whole suit revolves more around trade secrets and intellectual property than it does physical theft.

You are correct that it would probably be near impossible to steal MTH tooling. The classic Lionel F-3 shell tooling, for example, is roughly the size of a washing machine. That doesn't even include additional tooling for the frame, trucks, motor, etc."

http://www.trains.com/community/forum/topic.asp?page=2&TOPIC_ID=24613

[cspmo]

Article in classic toy trains.

http://www.trains.com/Content/Dynamic/Articles/000/000/005/517vkoih.asp

[Anonymous]

Ben10ben, Thanks for the clarification. The article in Classic Toy Trains really describes this case well.

(This note was edited due to new input which came in at the time I was writing this note to Ben10ben).

However, my questions were about DCC, QSI and MTH. Does anybody know about this?

[Anonymous]

The reality is, Lionel owes MTH $40.7 million as awarded by the jury in Michigan. Korea Brass stole MTH locomotive blueprints and gave them to Lionel. Lionel then produced engines from those blueprints. End of story! As for the QSI lawsuit, that one is trivial and Mike will prevail in that one.

[JerryZeman]

QUOTE: Originally posted by deschane


However, my questions were about DCC, QSI and MTH. Does anybody know about this?

Mark;

The best place to get a feel for these issues would be to wade through the 16 pages of posts on the subject, which all started from a post by Andy Edleman of MTH Electric Trains:

http://trains.com/community/forum/topic.asp?TOPIC_ID=21838

regards,
Jerry Zeman

[AntonioFP45]

QUOTE: Originally posted by Bennie Zimmer

The reality is, Lionel owes MTH $40.7 million as awarded by the jury in Michigan. Korea Brass stole MTH locomotive blueprints and gave them to Lionel. Lionel then produced engines from those blueprints. End of story! As for the QSI lawsuit, that one is trivial and Mike will prevail in that one.

Hello Bennie, Welcome to the Forum.......................

Please forgive me but.....I couldn't help noticing that on the CTT Forum there is a gentleman called: H. Zimmer........ are you related?[;)][;)]

Anyway, it's very nice of you to visit MR! [:D][8D][;)] If you don't mind, could you please give us details supporting your claim that "MIke will preveail in that one".

Upon last check, the odds are no longer in Mike's favor. Have you read any new information or updates? Hopefully, it will be resolved soon and all of the trolling and conjecture will cease and we can enjoy our trains!

Thanks!

[Anonymous]

QUOTE: Originally posted by Bennie Zimmer

The reality is, Lionel owes MTH $40.7 million as awarded by the jury in Michigan. Korea Brass stole MTH locomotive blueprints and gave them to Lionel. Lionel then produced engines from those blueprints. End of story! As for the QSI lawsuit, that one is trivial and Mike will prevail in that one.

I'm not going to be quite so diplomatic as AntonioFP45 was. This statement does MTH and its' position more harm than good with the model/toy railroading public. I have attempted to let the truth about MTH come to the forefront by asking for unbiased information or opinions. The above quote is not unbiased and comes off as someone with an axe to grind over these issues and is written with a condesending and superior attitude!

Furthermore, it answers questions which have been answered already! Mr. Zimmer, if you want to do some good, give supporting real information on MTH's case against QSI! Otherwise, what you say is only so much HOT AIR and meaningless!

[Big_Boy_4005]

Way to go Mark and Antonio. [tup][tup]

I'm going to sit back and enjoy this.[swg]

[Anonymous]

AS far as MTH vs. QSI, from what i have read (so take it with a grain of salt) is that it has the ability to be even farther reaching than the Lionel suit. Mth originally contracted with QSI to do the sound in the Proto 1 series. When MTH decided to go to Proto 2, the idea is that they stole many propitary ideas from the QSI chips installed in the Proto 1 locos.
If this is true, and we have to wait for another trial to resolve it, it is outright theft, pure and simple.
However, i really don't know if after all, the Lionel suit will be helpfull for MTH. All the bad press Mike WOlf at MTH has gotten over this cannot be worth the 40 million he got for it. THe fact that ANDY felt the need to respond is proof enough that there is a real concern that they won the battle but lost the war. We in the train comunity have very LOOOOONNNNGGG memories[:D], i for one will never buy any MTH stuff again. Seing how in three rail i spend on average of 5-10 thousand a year, that means more will go to Atlas, K-line, Lionel, Weaver, and thirdrail.
There was a great post that got deleated by i believe Walt on the CTT board. He had some real information on the suit. Perhaps if you ask, he will email you in private, it was very provotavie reading. Since the moderatios here rarly pull threads, his was yanked very quickly that i had to believe that pressure was brought from somewhere else.
Bill

[AntonioFP45]

QUOTE: Originally posted by crossracer1001

However, i really don't know if after all, the Lionel suit will be helpfull for MTH. All the bad press Mike WOlf at MTH has gotten over this cannot be worth the 40 million he got for it. THe fact that ANDY felt the need to respond is proof enough that there is a real concern that they won the battle but lost the war.

We in the train comunity have very LOOOOONNNNGGG memories[:D], i for one will never buy any MTH stuff again. Seing how in three rail i spend on average of 5-10 thousand a year, that means more will go to Atlas, K-line, Lionel, Weaver, and thirdrail.

Hello Crossracer,

You seem to have a realistic grasp of the situation overall!

One reason I've pointed out that it would be good if MTH did lose the QSI suit is because after a while, HO modelers in general "may be somewhat forgiving", which would be good for MTH. BUT, if Mike Wolf does win this QSI lawsuit, then it's very likely that the percentage of the HO market that he gets eventually would be incredibly small. By now MTH management realizes that DCC already has: a strong foothold in the HO & N markets, loyal customer support, is growing more user friendly, and the Big Plus: The manufacturers are cooperating with the NMRA.

All one has to do is to randomly visit LHS's that are patronized heavily by HO and N modelers and ask about the MTH HO products that are coming. The fast, snappy negative answers by many already convey the message "Not Interested". I may be wrong, but IMHO, MTH's going head-to-head with BLI by introducing a K4 does not appear to be a wise business move. Seems like a streamlined NYC J3a Hudson or a Milwaukee Road "Hiawatha" Hudson, would have been much wiser!

While it may not be MTH's intent, it almost seems like they're "attempting to kick sand" in BLI's face. Of course, it's their right as a business competitor, but this is the perception that quite a number of modelers (me too) are coming away with. This in turn already adds to the resentment stemming from the QSI lawsuit! So Crossracer's view of winning the battle but losing the war seems to have merit.

As for the products themselves, since many HO modelers are detail concious, the MTH HO Pennsy K4 is already at a disadvantage in comparison to the BLI K4.

Again, I don't want to encourage flaming but these are just opinions and based on the other MTH related threads many of you share similar sentiments.

Peace out!

[Anonymous]

Since I got on this forum a couple years ago, these MTH issues have been bantered about almost ad-nauseum! People have generally bad-mouthed MTH all this time (myself included)! I decided I wanted to get to the bottom of the MTH thing, if I could and attempt to be fair to all involved. I started wondering if any of the bad press about MTH was true. I wondered if things had been miss read, miss construed and miss interpreted. Since existing art can not be patented by someone else, I wondered if the information about MTH claiming prior art for some DCC technology was really happening, or was this a fabrication.

Truthfully, if I was not on this forum, my first exposure to MTH would have been their announcement of their K-4 just recently, as I don't pay attention to high rail and classic toy trains! I'm an ***. I'm not stupid and I don't believe many of us here are. I have to believe MTH has suffered some of this bad press, because they created ill will somewhere along the line.

[PennsyHoosier]

What might have seemed like a good strategic move several years ago has today unraveled into a PR nightmare for MTH. The unending lawsuits have come to define this company--not what they've done (MUCH!) for O guage; not what they MIGHT do for HO. Rather, this company has defined itself in terms of an antagonistic litigiousness. And that really is a shame. Oh what might have been...

[railman]

I would agree- modeling something that isn't stepping on production by another popular manufacturer could have been a good "olive branch" for the company, but it is not to be.

[rrinker]

I have to add, after finding the information on the QSI/MTH lawsuit, that the ironies are just incredible.

Way back when, MTH was a big, if not the biggest, Lionel distributer. Then they decided to release theior own products,a nd Lionel gets understandably upset and wants to revoke the distributorship. MTH sues and actually wins this.

Fast forward a bit, QSI is making all the sound boards for the MTH ProSounds I locos. QSI decides they want to sell the sound board aftermarket so people can add the same sound to other locos. MTH objects and stops dealing with QSI.

Seems to me that MTH wants to have their cake and eat it too.

--Randy

[Anonymous]

rrinker said: "I have to add, after finding the information on the QSI/MTH lawsuit, that the ironies are just incredible".

Randy, where did you come on this information?

Mark

[METRO]

If I may be allowed to conjecture a bit here as a humble HO&N Scale modeler:

This business with MTH & Lionel reminds me very much of the frictions that Microsoft and Apple had in the late 80s - early 90s, what with all of the lawsuits, backstabbing and such.

Anyways, what I am wondering is if MTH is getting a bit hungry to become more than a niche player in the industry. It is begining to sound like MTH saw the positive reaction to BLI (really it was an awsome reaction) and wanted in on the HO scale market.

There is a business model called "Hostile Invasion" for entering a new market that MTH seems to be following. The model includes suing anyone who poses a threat to you, in this case Lionel who is also getting back into the HO market, although their performance in doing so is questionable; Conducting boarderline questionable business practices in order to overcome technology and productivity gaps, which is the case with the QSI suit; and finally confronting the industry paragon with a parallel product that is better or cheaper, the competition with BLI.

This works great in things like software (Microsoft's entry into the internet market comes to mind) where brand loyalty is not very strong and there is a steady increase in base growth, however I doubt it will work here in the Model Railroad industry. I've seen some of the most fanatical brand loyalty in this hobby, and it's not like are numbers are doubling every year.

In the end I think this has been a series of bad moves for MTH. I think they'll get squeezed out of the HO market by bigger players like BLI, Atlas and Life Like (probably with a large net loss) and will be looked at with scorn by CTT modelers for a long long time to come.

In the end, I think HO modelers look for product quality, economy and a company with a nice-guy image when buying. I am having my doubts that MTH can deliver.

~METRO

[rrinker]

QUOTE: Originally posted by deschane

rrinker said: "I have to add, after finding the information on the QSI/MTH lawsuit, that the ironies are just incredible".

Randy, where did you come on this information?

Mark

A link someone posted on the QSI Yahoo group. I think it was just a link to a Yahoo search on the term "MTH Lawsuit" and it was the second item in the list. I think you'll find it on the QSI web site as well - remember it's QSI suing MTH, not the other way around, sort of a pre-emptive action after MTH sent out their notices.
And I might add that there has been a topic of discussion in the QSI Yahoo group over the appearance of Back-EMF for loco speed control. Someone pointed out an article fromt he late 60's/early 70's that was a construction project for a speedometer that used Back-EMF to display the scale speed of the train..sound familiar?

--Randy

[Anonymous]

Metro

Very interesting analysis. Of course I've never seen evidence of brand loyalty on this forum. Read the "Which is the best DCC" topics. Nope, no brand loyalty there! lol

Actually brand loyalty is an interesting topic. What causes brand loyalty? Not only good product or good price - but service and a "customer comes first" mentality. I dare say that anyone that talked bad about Tony's Train Exchange would get flamed by several hundred folks here!!! Tony should become a business school case study on how to do business!!

[AntonioFP45]

QUOTE: Originally posted by dkelly

Metro

Very interesting analysis. Of course I've never seen evidence of brand loyalty on this forum. Read the "Which is the best DCC" topics. Nope, no brand loyalty there! lol

Actually brand loyalty is an interesting topic. What causes brand loyalty? Not only good product or good price - but service and a "customer comes first" mentality. I dare say that anyone that talked bad about Tony's Train Exchange would get flamed by several hundred folks here!!! Tony should become a business school case study on how to do business!!

Very good! Not a case of brand loyalty so much as "Customer Loyalty". In turn the owner of a good business, such as Tony's, may tell customer's his personal preference. So a customer, especially newbies, may stick with a specific brand based on the business owner's comments.