M.T.H. Responds To DCC Lawsuit Allegations

[amedleman]

In light of the announcement of M.T.H.'s entry into the HO marketplace, some online commentary has been posted that may raise concerns among consumers about M.T.H. technology with specific inferences about the company's patent protection policies. Much of these comments may stem from HO competitor Broadway Limited’s website which contains a statement advising visitors of a feature that was removed from Broadway’s locomotives in response to a lawsuit M.T.H. has filed against the company’s sound manufacturer, QS Industries (QSI).

This statement has been present on Broadway’s website for many months and has allowed consumers to mistakenly assume that M.T.H. is suing DCC manufacturers in the HO community. Their statement has created a sense of animosity amongst some consumers for any company that patents their technology rather than shares it with others. This belief exists despite the fact that QSI’s Quantum System used in Broadway’s products is in fact patented. To the best of our knowledge, QSI sells their technology to HO manufacturers rather than “sharing it” for free.

M.T.H. has remained silent on the statement found on the Broadway website while litigation against Lionel, Korea Brass and Yoo Chan Yang concluded this summer. The following points detail the actual specifics of M.T.H.’s actions regarding our patents and litigation.

1. Yoo Chan Yang is Korea Brass’s U.S. Agent. He resides in Charlottesville, Virginia. His home address is listed as the corporate address of Broadway Limited and is also the same address of Korea Brass’s U.S. Office (Korea Brass manufactures Broadway Limited, Lionel, K-Line and other’s products in South Korea). Yoo Chan Yang, along with Lionel and Korea Brass, were found liable in U.S. District Court for misappropriation of trade secrets stemming from the theft of digital designs of M.T.H. locomotives. The jury awarded M.T.H. $40.8 million dollars. Frankly, we believe that Broadway Limited and QSI may have ulterior motives designed to affect M.T.H.’s reputation in the posting of their website statement pertaining to the removed feature.

2. M.T.H. has not sued any DCC manufacturer for violations against any M.T.H. patents. A suit was filed against QS Industries (QSI) after QSI sued M.T.H. several years ago claiming patent infringement on our O Gauge Proto-Sound 2.0 system. Our suit also claims patent infringement against them for their HO Quantum sound system in our suit. QSI has removed a feature in the Quantum system they sell to Broadway Limited in response to our suit. QSI continues to include the disputed feature, speed control in one-scale miles per hour increments, in the systems they sell to Lionel for use in Lionel’s HO models.

3. M.T.H. is not claiming any patents on the concept of speed control using Back EMF as has been reported recently. Back EMF has been in existence for years and is not applicable to our technology. It was simply referenced as an existing form of speed control in our patents and some folks misread these patents and assumed we are claiming it as our own invention. Our patent claims speed control in one-scale miles per hour increments. We do not claim to have patented speed control as a concept. To this day, after communicating with the NMRA and others, M.T.H. knows of no prior inventions or systems using actual 1 scale mph increments to control the speed of a model train.

4. M.T.H. did send out letters last Spring to DCC manufacturers in the model railroading community who are developing or utilizing technology that could have violated our U.S. Patents. These letters were meant to advise them what the patents cover so that they could avoid violation. Specifically, we informed them of our method of 2-way communications and our form of speed control in one scale mile per hour increments. These are the only issues we have alerted the DCC community about. Notification letters like those sent to the DCC community are standard practice of any U.S. Patent holder. Since the letters have been sent out, M.T.H. developers have met with the NMRA regarding our patents and an agreement was made with the organization that if prior art is found to exist that compromises any of M.T.H.’s patent claims then M.T.H. would take no legal actions on those claims.

5. We have made it known that if any DCC firm has prior art to any of the claims in our patents that we will not waste our or their firm’s resources on unnecessary legal expenses. Not one of the DCC firms has yet to respond to our letters or has inquired about the possibilities of a potential licensing arrangement. Frankly, any DCC firm that has informed consumers that M.T.H. has filed suit against them is not revealing all of the facts and one should at least question their motives if they have indeed told you this was the case. M.T.H. has no interest in replacing or derailing the DCC standards that exist today.

6. M.T.H. posted its patents online for all to review and encourages any reader of this post to do so as well. They can be found at www.protosound2.com. A review of the patents’ language will enlighten those who feel our claims are baseless and indicate the level of prior art we provided to the U.S. Patent Office to substantiate the claims in the first place. Beyond that, M.T.H. encourages each DCC firm (or any individual for that matter) to bring forth evidence now that our claims are in fact invalid. In patent cases, invalidating a U.S. Patent can occur when prior art has been documented to exist. Prior art is deemed to be published works on the technology in question. These can be in the form of published articles or operator’s manuals that specifically describe how the technology works. Conversations between individuals, online or at train shows are not considered prior art. Should prior art be found to exist then our patents will be modified or amended. If, as we believe, no prior art is shown to exist then our patents are as unique as we claim.

7. M.T.H. has now invested over $4 million dollars in the development of our Proto-Sound 2.0, Proto-Sound 3.0 for HO and DCS Digital Command Systems. We developed these products because we felt that the current technology standards at the time (Lionel’s Railsounds and TMCC command control in the O Gauge AC marketplace and DCC in the HO DC marketplace) did not provide operators with the most realistic and prototypical operating features they deserved and were no longer innovative enough to attract new hobbyists into model railroading. U.S. Patent protection helps ensure that others will not compromise our investment in this technology without our permission. If our efforts are as unique as we believe, they should be protected under patent law. If the concepts lack uniqueness, then reduced or no protection should be afforded. From a business standpoint, we must treat our patents as insurance against our investment, something manufacturing and technology firms (including model train companies) have done for years and years. If not, there is no financial incentive to develop these features. A quick look around the entire model-railroading marketplace should be clear evidence to any and all that companies are developing new technology for their trains. Many are also patenting their efforts because they also recognize that failing to do so will reduce the value of their technology investment.

8. M.T.H. would encourage consumers to stop and consider that there may be a better way to operate and enjoy model trains than what exists today. Such was the goal when our technology was developed. Yet M.T.H. realizes that many model railroading hobbyists may not even be aware of just what types of developments we have created that are worthy of the U.S. Patents we have received. As a result, they become satisfied with the status quo. Our experience has been that once a consumer understands just how innovative and exciting this new technology is, then its importance as a tool to expand the hobby becomes much clearer. A complimentary promotional DVD on M.T.H. technology can be obtained by contacting M.T.H. via email at [e-mail].

[Anonymous]

Oh Pu-leeeezze!!!!
MTH can peddle its story all it wants, but I don't believe a word of it.[:(!]
Had this explaination been posted a year ago, it might be believable. Obviously they are out of touch with the thought processes of the educated hobbiest, and they think we will just swallow anything served up to us. [:p] Oh, and that choice of the inital offering of the Pennsy K-4. Had the decision been mine, I certainly would not have produced an engine with a limited regional following and that was already on the market from several manufacturers. Yeah, you did your homework huh?
I guess the part that sticks in my craw the most is why. Why did MTH not get with the NMRA to start with? Why did they not be a good neighbor in the DCC community and develop thier own DCC system, rather than developing another control system? You can't convince me that whatever advantages they have cannot and will not be incorporated into DCC at some point. (Now, there may be some intense litigation involved)
When are some of these corporate type going to realize that they simply cannot wi***hier own way on the hobby?

So, to MTH I say, If you can't play nice, then get out of the sandbox . Oh thats right, you've already stunk it up already, so on second thought, just get out. We were all quite happy til you showed up.[:D]

[AntonioFP45]

QUOTE: Originally posted by kbfcsme

Oh Pu-leeeezze!!!!
MTH can peddle its story all it wants, but I don't believe a word of it.[:(!]
Had this explaination been posted a year ago, it might be believable. Obviously they are out of touch with the thought processes of the educated hobbiest, and they think we will just swallow anything served up to us. [:p]

I guess the part that sticks in my craw the most is why. Why did MTH not get with the NMRA to start with? Why did they not be a good neighbor in the DCC community and develop thier own DCC system, rather than developing another control system?

So, to MTH I say, If you can't play nice, then get out of the sandbox . Oh thats right, you've already stunk it up already, so on second thought, just get out. We were all quite happy til you showed up.[:D]

Originally I was not going to respond but Kbfscme put it so well! MTH has left bad tastes in many mouths. I actually do hope that things improve in the long run.

Perhaps I'm wrong, but one "sure way" IMHO that MTH can almost instantly regain respect, and an instant share of the HO Market? DROP THE LAWSUIT!

High Ambers and (hopefully) Peace out!

[Anonymous]

Gobbldee-gook, Gobbledee-Gook, Gobbledee-gook! This smells and sounds like Corp-think! MTH you can't entice me and if you thought the above would do so, your out of touch with my reality!!

In Corp-think, what the above is, is called "ENGAGING" the public.

[Anonymous]

Hey Andy, that is supposed to make me buy your product??? Nice try. I kinda figured you'd be lurking around here when your little annoucement was made...

By the way, I had a couple Genesis F units shipped to me, and unfortunately they came in an MTH box...I took great pleasure in burning it!

[butleryard]

SELFISHNESS!!!!!!!!!!!

Mike Wolf says " Whats mine is mine....Whats yours is mine also"

Can't we all just get along? We were fine for years and now some money hungry corporation (Mike Wolf) wants it all!

Get lost!!!!

[AntonioFP45]

Hey guys!

Just a friendly suggestion that you can still get your point across and "stay cool"! It took me years to learn that when we get nasty, we often are not taken seriously!

(I learned this in the "Advanced Class" in the School of Hard knocks!)

10-4!

[3railguy]

Andy, it's not the so much the patent infringement lawsuits that anger modelers so much, it's MTH's refusal to liscence technology to other manufacturers. It's a compatibiliy issue. Modelers want their trains from different manufacturers to run well together. Modelers do not want a confusing maze of wires and interface boxes just to run different brands.In order for that to happen, manufacturers must play well together if they want a clean reputation. MTH doesn't seem interested in playing well with others. That is what is harming your reputation and will continue to harm your reputation until you share the technology - legally. In the O gauge world, Lionel TMCC has become an industry standard amongst O gauge manufacturers because Lionel liscences it. This was MTH's choice for refusing to liscence DCS.

As far as the $40,000,000 lawsuit with Lionel is concerned which will likely be reduced. Let me tell you this. You've heard it before I know. MTH was built exploiting Lionel by reproducing just about every prewar and postwar item in the Lionel catalog. Many are Postwar designs that Wellspring brought back. Wellspring and Kughn paid big bucks for these designs.The law says reverse engineering is legal but like pornography which is legal, it isn't ethical. That is where your reputation has been tarnished. If Lionel were to reverse engineer DCS so their engines work with your TIU, I can assure you, you would have your lawyers all over Lionel like termites.

I see some defensive advertising in your post. it doesn't work. Just play well with others, liscence your technology, and MTH will do fine.

[Big_Boy_4005]

Mr. Edleman,

I find your company's sense of ethics and fairplay severely lacking. I don't care if MTH spent 400 million dollars to develop Protosound and DCS. The method by which you aquired the patents is what I find most disturbing. It may have been legal, but it wasn't nice.

My understanding is that MTH took intellectual property that was previously developed and deliberately left unpatented, so that it could be shared. They then incorporated it into a new system and then patented it all, thus securing the rights.

I will never use any trains that include any MTH electronics on my layout, and my layout is 3 rail O, your main area of business. I don't care if your system is superior. Ever hear of BetaMax? That system was superior too, but was forced out of existance by market pressure.

I stand firmly behind my friends and fellow hobbyists who model in HO scale. I feel as many of them do, that this venture into HO is more of a ploy to justify the patent rights, than it is to sell trains.

To show that I am not simply railing against MTH, I would like to congratulate your company on it's victory over Lionel. But please don't try to paint a picture of guilt by association. My understanding of the Lionel case was that the misuse came in mechanical design. In the case of the electronics in question, there are indications that they pre date your patent, but no one can prove that.

The bottom line is that there are a lot of people in this hobby that don't believe your side of the story. Your problem is that they are your potential customers, and the customer is ALWAYS right.

[3railguy]

Big Boy, Question. Who pays the damage fee in these lawsuits?

WE DO!!!!

[Anonymous]

John Long, I concur with your response. I cannot afford 2 different control systems. I started with Lionel command control and have since that purchase bought 2 nice MTH locos with proto 2 that I have to use in conventional. Your point about MTH being the COPIER is right on. Look at the exact duplicates of Lionel standard gauge! Did Lionel get any money from MTH?

[Big_Boy_4005]

QUOTE: Originally posted by 3railguy

Big Boy, Question. Who pays the damage fee in these lawsuits?

WE DO!!!!

Sorry John, I don't. I don't buy those products. As a consumer I tell them where to stick it. Why are we even talking about who pays? [%-)] I didn't mention any of that in my post.

If you meant my congratulations on their victory with Lionel, that had nothing to do with the award. That was about the fact that they were found to be in the right, and the convinced the jury that the plans were stolen. The dollar value of the judgement is meaningless like you said.

I don't like anyone sueing anybody in the hobby, and I have first hand experience, two seperate cases.

[3railguy]

Big Boy, I was talking lawsuits in general and consumers in general. We as in a model railroad community. I'm mainly a 3 railer but into HO too. MTH is in the buisiness of litigating everything under the sun and they need to be reminded that they are litigating modelers as well. You put it well. The customer is always right despite what the law says.

[Anonymous]

This is some of the stup[dest positions I have heard. MTH has developed this system on their own and has patented it. Your intention to kill MTH is obvious and I ask what your ulterior motive is. Are you connected with other mfgr's? I know that Mr. Wolf coppied the early Lionel models because Lionel didn't patent , nor, keep any dies to make the again. Mr. Jerry Williams copied most of Lionel's pre-war trains because of the great demand. Most people are quite thankful for what he did.

The Korean Brass stole from MTH , dies, blueprints and lists of items to be produced. I believe that MTH complete production system and schedule had to be revamped. In the process they lost alot of sales for the very item they had developed and had to lay-off a lot of personel. It is pretty bad when your compeditor markets an engine built with a die you made

QSI was a one man operation when MTH contracted with him to make a sound system for their engines. MTH had ti put up with slow production and QSI could not meetthe demand. QSI assured Mike that their sound system could not be made compatible with TMCC MTH licensed Proto sound and paid to have QSI provide the sounds. Three months later QSI was marketing TMCC compatible sound on their own. MTH wanted better sound and QSI would not provide the service. MTH decided to build the DCS system.

The system is better than anything else on the market and it is compatible with most systems. DCC is a free system and a good one, but, the DCS system is better. Just try it!

I am getting old and have played with all the scalles for over 58 years and damit I want trains to operate like Trains.

[simon1966]

Folks, don't get all hot and bothered about this. If you feel angered by MTH, just don't buy their products or DCS system. It may well be that DCS is a better solution than DCC, but this does not mean that it will ever gain much traction in HO scale. An obvious analogy is right in front of your eyes now.......Some would say that the Apple operating system is better than Windows, but which dominates the desk tops of the world? The huge advantage of DCC is the fact that it is an open standard that any manufacturer can work with. As far as I am concerned, every layout I have seen has taken huge compromises in scale distance. My layout has 100ft of main line. This equals about 1.6 scale miles. I don't care if I am running at a precise scale speed as i have had to compromise so much on distance compression!

[JerryZeman]

Being first and foremost a HO modeler, with a significant investment in North Coast Engineering DCC, I was very upset when MTH sent out their letter to DCC manufacturers. It certainly sent the DCC working group into a tizzy. Hopefully this letter will clarify the positions of all parties concerned, and those with DCC can get on with improvement of the DCC standards to the benefit of all DCC users.

There is obviously a lot of bad blood between MTH, QSI, and Broadway Limited. I don't which of these manufacturers is the "injured party" that spawned all the animosity, and the truth probably lies somewhere in the middle of the positions between MTH and the other operations. As far as I'm concerned, all three can spend away and litigate themselves to death; it won't impact my enjoyment in my HO world, or, for that matter, my O three rail interests.

The existence of DCC standards in my opinion has been a boom to promoting the use of command control in two-rail applications. While there are competing systems that use different bus architecture, there is true compatibility in the ability to operate any DCC decoder-equipped decoder on any system (some lower end and older systems have limitations to only 99 addresses). MTH cannot effect what is already out there and deployed, and evidently, as stated in Andy's letter, does not prohibit development of BEFM decoders in DCC. That is good news.

What has me concerned, however, is the obvious desire of MTH to constrain the future development of DCC standards, and the desire to promote the advantages of DCS over any current DCC system. I can understand MTH's desire to protect their investment in DCS, but why in the world is it necessary to play "big bully" and threaten DCC manufacturers from developing two way communication with decoders and scale MPH control? I'm sorry, but both of these features would be a natural evolution of the DCC standards, and MTH's attempts to constrain development in this area is a clear attempt to enhance the competitive position of MTH vs. all current DCC manufacturers. In my vision of a perfect world, the control circuitry that MTH uses to achieve these features should be patentable, not the simple concept. I suspect that if a DCC manufacturer was brave enough to want to risk litigation from MTH, they could develop these features in DCC, and "engineer around" specific MTH circuit designs to accompli***hat end. But, given the small size of the DCC manufacturing community, this probably won't happen, as none of these manufacturers is going to "bet the farm" on a chance of incurring the wrath of MTH's fine legal staff. Calling on the DCC community to show "prior art" in controlling train speed in scale MPH is in my humble opinion asinine. I haven't read the MTH patent, but given the language the Mr. Edelman uses, I'd be curious if the DCC user's couldn't have their systems control in KPH (kilometers per hour). Heck, I'd gladly do the math, and would love to see every DCC manufacturer place the disclaimer on their product literature that says "We cannot provide, you, our valued customer, the ability to perform speed control in MPH due to the existence of MTH patents".

If MTH wants to impress me, the consumer, then they should get actively involved with the DCC working group and embrace the development of standards that can work for all DCC manufacturers.

I would give serious consideration to selling my current DCC control system for some sort of MTH DCC-compatible control that contains the features of DCS. I like the way DCS controls DCC locomotives. The ability to "notch up and down" diesel engine sounds and change steam engine cut-off sounds is awesome. The speed control in scale MPH is way cool. But I won't even give DCS a passing consideration if it can't control my current stock of DCC equipped locomotives as good or better as I am today. I've lived with the compatibility issues in three rail O, and it sucks. And I have no intention of propagating that state of affairs into my HO world.

So, in summary, my comments to Mr. Edelman are as follows. If you want to play nice in the sandbox with the current DCC working committee, and work for the overall betterment of the hobby, then come on by with an improved DCC control system that incorporates the features of DCS. I'll gladly open up my wallet. If, however, you want to continue to constrain development of DCC just to enhance your competitive position in the HO marketplace, then my wallet slams shut to all of your offerings in HO and O.

regards,
Jerry Zeman

[Anonymous]

UPnut,
Thanks, but no thanks, I'll stay with my DCC system. MTH has a bad reputation (in my opinion) for how they conduct their business! I want no part of this and would be embarrsed to own anything MTH!
If they were to drop the law suits and simply conduct business in a gentlemanly fashion, I might reconsider. From what I understand of their track record, this appears unlikely.

[AntonioFP45]

BigBoy4005, JerryZeman

Both of you have given great examples of CLEAR, WELL THOUGHT OUT THINKING!IMHO, your positions reflect the opinions of many model railroad customers around the globe regarding this situation.

Now, if only MTH's management would carefully read your replies and do some thinking also.

[cmrproducts]

The only reason MTH did so well when it first began to build O gauge trains was that it supplied items that Lionel was not making. In fact Lionel was not making many new items only doing reissues. And anyone can check this by referring to the old Classic Toy Train magazines (and Yes I have them all). It was at a time that the 3 railers were hungry for anything new. So MTH did very well.

Then MTH brought out exact copies of all of the old American Flyer operating accessories. The price was good and again they sold very well.

Now MTH thinks well we just can't loose, might as well go for the HO market too!

Well the HO scale market is not the same as 3 rail market. We have more than 4 or 5 manufacturers of engines and cars in the HO market. This also goes for DCC.

In the O scale market there are only 2 real manufacturers of 3 rail DCC but in HO we have 8 or so. So the modelers in HO are not going to stand in line for any new manufacturers system that has come out with something supposedly revolutionary. Like they did in the 3 rail market.

HO modelers want the convenience of buying any manufacturers decoders and that they will be able to use them with any DCC system, not just one specific manufacturers. This is expected now!

Now one way to have an advantage is to cause the other DCC manufacturers to be careful on how they do business because of a possible patent infringement. It might work in the 3 rail groups but in the HO groups that is a sure fire way to cause ill will and many will never buy one.

It also would not hurt that you really need to come out with engines that no one else has done or that have been out of production for a long time!

It will be interesting to see how the MTH HO entry goes with the HO modelers!

BOB H Clarion, PA

[amedleman]

Thank you all for your comments. We certainly appreciate the additional feedback and look forward to your continued discussion about our entry into the HO marketplace. We truly hope you will each take the time to consider the points presented in our initial posting. We are confident that in time you will find our HO products to be a positive for the market and not a negative. We know that you will be impressed by how well our engines operate and how varied and realistic the features of Proto-Sound 3.0 and DCS are. In the meantime, I've provided some additional comments for some of the statements made in retort to our post.

kbfcsme:

M.T.H. developed the DCS system for AC O Gauge operation in 1999/2000. After long study, we determined that DCC simply didn't have the horsepower to perform well in the AC hi-amperage world of O Gauge model railroading. This is why DCC has never caught on in that market and why all O Gauge manufacturers have either developed their own system or used Lionel's TMCC system.

AntonioFP45:

In regard to your plea for M.T.H. to drop our lawsuit, I hope that you are also asking QSI to do the same thing. Remember, they started the litigation by suing M.T.H. first.

3railguy:

Please reread my post. I realize it's long but in section 5 I point out that not one of the DCC firms responded to our offer to enter into a licensing arrangement. While we haven't made such overtures in the O Gauge marketplace, we certainly have in the HO marketplace.

As for M.T.H. getting our start by reproducing past Lionel items, we're guilty as charged. However, the overwhelming majority of M.T.H. items produced since 1992 are not copies. In fact, we have released over 8,000 items during this period. Prior to 1992, our manufacturing did primarily consist of tinplate reproductions of Lionel pre-war trains. In fact, our success in that category prompted Lionel to enter into a subcontracting relationship with M.T.H. so that we could create their Lionel Classics Line of the late 1980s and early 1990s. Aside from those pieces, less than 400 of the 8,000 items we have produced since then are re-engineered Lionel items. More importantly, when we offered these pieces we always built a better product that sold for less money than the original. Clearly the marketplace benefitted from the value of these reproductions and clearly we learned much in the manufacturing and marketing of the product. Other O Gauge firms, including Williams and K-Line also followed a similar practice. We won't deny our history of manufacturing, but copies have been a very small part of our growth over the years.



Big_Boy_4005:

We are not trying to upset customers by pointing out the facts. Your understanding of the Lionel case is incorrect. This is not your fault as you were not in the courtroom and weren't privy to the evidence presented at trial. Your understanding of the patents is also incorrect. Please re-read my post. You will see that of the patents we received, we only alerted the DCC community about speed control in one scale mile per hour increments. We are not claiming a patent on the concept of speed control! As for two-way communication, we have patented our method of two-way communication. This does not mean that a DCC firm cannot invent their own method of two-way communication. We simply asked them to not copy our patented method without a licensing arrangement.

I appreciate your concern about guilt by association. The fact however is that Mr. Yang and Korea Brass operate out of the same residential home as Broadway Limited in Charlottsville, Virigina. This makes them associated in some manner and both Yang and Korea Brass were found liable in our suit. You are certainly entitled to believe that no association exists but if it looks like a duck, walks like a duck, then it may very well be a duck.

[Anonymous]

MTH makes the best trains in O gauge and they'll do the same in HO. DCS is by far the best system in O gauge. You HO guys will forget about Athearn Genesis once MTH puts their fine models on the market. Mike Wolf doesn't get enough credit for his revival of O gauge and he'll do the same for HO.

[AntonioFP45]

BillConner,

You may be correct, but if you re-read most of the posts, this is not at all about "Who's going to have the best system". Customer feedback will help determine this. Indeed MTH could have been "the hero" today had it joined in with NMRA and the rest of the Command Control groups in advancing this technology. [;)]

As for your inference about Mr. Wolfe's revival of O scale and "he'll do the same for HO?" please check last year's government consumer spending statistics for model railroading in the HO scale category. (Anyone remember the website?) The HO Market is the strongest out of all the scales between Z and G.

What kind of revival is Mr. Wolfe going to bring to HO? [?]

In spite of the Mr. Amedlman's responses the bottom line still is that the industry has been affected by the litigation. To top it off, even if DCS is slightly higher in quality; Digitrax, Soundtraxx, Lenz, TCS, NCE, and MRC are

[1] established with reputations of dependability
[2]have strong customer bases,
[4] have very good public relations.

They compete with each other, yet, the common platform technology is shared. Some componets are even interchangeable. Case in point: Digitrax and Soundtraxx have joined forces to develop SurroundTraxx. Though expensive, it looks like it's going to be a real winner! As is, quite a bit of DCS looks to be "stand alone". I may be wrong but the anology looks something like Studebaker competing against Toyota, Honda, Ford and GM even though the "Bakes" were for a while the better car.

The Point is that it's very doubtful that MTH is going to "Sweep" the HO market.. The company's products will be among the many that's already in a competitive arena. For now MTH's bad reputation is also out on the market and is a handicap. MTH's trains will sell and make a profit, but imagine HOW MUCH MORE they could be potentially selling were it not for this situation! Many modelers will not spend their hard earned $50 and $100 bills on MTH products, especially since HO modelers already have good, high quality options to choose from. [8D][;)]

I still firmly believe that the best thing that could happen is for MTH to lose in the litigation and join in with the NMRA and the command control groups. Since in the long run most consumers let bad memories fade when they see good products the sooner this case comes to a close the better. The "potential" monies lost from the litigation could be recouped in sales. Would be great for MTH to then move forward and offer modelers good products.

Mr. Wolfe:

If MTH wins: We lose and you lose out!
If MTH loses: We win and you win big in the long run!

[Anonymous]

Hmmmm Interesting. While MTH might have brought up some interesting and valid points in its rather long post, I do have a problem with it. Why so long? This should have posted immediately after the flap happened. Seems to me that they spent a long time trying to figure out how exactly to word their response. This will hurt them, at least in my eyes. I don't know how many of you remember the Tylenol scare. The company didn't hem and haw and point fingers. They acted in the best interests of their customers and recalled everything immediately - and then sorted it out. Result? Tylenol is still doing great business. MTH might be legally correct, but as a customer oriented business that wants to better the hobby while making a profit? Not in my eyes. Yes, they did do a bunch of copying of old Lionel things. Legal? Probably. But did they at least take the opportunity to inform Lionel of what they were doing? MTH says that it sent letters to the other DCC folks to let them know what they had patented, not as a threat, but rather to help them not infringe on patents. Did they send such a letter to Lionel saying "hey we're gonna remake some of your old stuff - if you think this infringes on your patents/trademarks etc. please let us know and we'll talk licencing." I haven't heard of any such letter.

MTH never addresses any attempts to work with the NMRA on DCC issues for the betterment of the hobby. Instead MTH met with NMRA and agreed that if prioruse is proved they won't sue. Big deal. I doubt anyone here would say I was being a great guy if I agreed that I would not drive off in your car because you own it.

MTH gripes that no one has responded to its offer of a license and attempts to say that shows how shifty the others are. Perhaps no one thinks that MTH's patents are valid. Perhaps no one likes to be threatened. If MTH's patents are determined to be invalid, then wouldn't it make MTH's offer appear to be blackmail? Would MTH agree to reimburse any licensing fees plus interest to those that got licenses if the patents are later determined to be invalid?

MTH and its attorneys are forgetting some important business/legal issues. You may be 100% legally correct in what you want to do, but it's not right and your customers/future customers will know it. What comes around goes around and no one is going to cut MTH any slack should it someday accidently use someone else's patent/trademark.

Everyone is entitled to make a profit and I will support MTH's right to do that. They just won't make any from me no matter how good their product is. Talk is cheap.

[dharmon]

QUOTE: Originally posted by Bill Conner

MTH makes the best trains in O gauge and they'll do the same in HO. DCS is by far the best system in O gauge. You HO guys will forget about Athearn Genesis once MTH puts their fine models on the market. Mike Wolf doesn't get enough credit for his revival of O gauge and he'll do the same for HO.

Well..first they have to make something I want, then they have to make something I can afford. Right now they aren't doing either. Maybe in the future.....but Amedleman and MTH need to come to grips with the fact that right, wrong or indifferent.....this litigation stigma is going to take some time to get over....O scale may have needed revival, but let's be real, O scale is primarily a collecters gauge.....HO scale needs quality AFFORDABLY PRICED items, not another limited runs woo freaking hoo bells and whistles gadgetry.......If Mike Wolf is going to revive HO scale $400 a pop......it's going to revive it into right into the grave with the old rich guys that the hobby dies with.

[Paul3]

A few responses follow, but first:

Dear "amedleman",
It would be nice if you signed your posts with your occupation, if nothing else. That keeps folks like me from having to go into your profile here to find out if you are speaking for MTH or only yourself. Besides, you know how things get repeated on the 'net (for example, this has already shown up on Atlas). More people might believe in your message if you put "V.P. Marketing - M.T.H." after such a post. Thanks.

amedleman wrote:

QUOTE: 4. M.T.H. did send out letters last Spring to DCC manufacturers in the model railroading community who are developing or utilizing technology that could have violated our U.S. Patents...Specifically, we informed them of our method of 2-way communications and our form of speed control in one scale mile per hour increments. These are the only issues we have alerted the DCC community about.

Well, that should all be well and good since, AFAIK, the NMRA Bi-D format would use BEMF to determine scale MPH of the loco and display it on the throttle. Your MTH DCS apparently sets the speed in scale MPH on the throttle and makes the loco match it. Sounds like two totally different systems to me... Are they?

QUOTE: 8. M.T.H. would encourage consumers to stop and consider that there may be a better way to operate and enjoy model trains than what exists today...A complimentary promotional DVD on M.T.H. technology can be obtained by contacting M.T.H. via email...

Why don't you tell us what makes DCS better than DCC? I have heard many claims but few specifics. So far, I have to say I'm against changing due to the large commitment I've made to Digitrax (Zephyr, 3 DT400R's, UR91, a couple dozen engine decoders), not to mention the even larger commitment my RR club has made (Chief, dozens of throttles, hundreds of decoders, oodles of accesories). Please tell us what is it about DCS that would make a person or an organization that has already spent hundreds or thousands of dollars on DCC change to DCS?

kbfcsme wrote:

QUOTE: Oh, and that choice of the inital offering of the Pennsy K-4. Had the decision been mine, I certainly would not have produced an engine with a limited regional following and that was already on the market from several manufacturers.

I have to agree, here. LL started Proto 2000 with a BL-2, and BLI with the NYC Hudson. Both sold pretty well because they hadn't been done to this quality before. So far, I don't see much that seperates the K-4 from the pack (other than the high price). I, too, would have done something that hasn't been done. It could have been worse, however: they could have released another F-unit. [:)]

amedleman wrote:

QUOTE: M.T.H. developed the DCS system for AC O Gauge operation in 1999/2000. After long study, we determined that DCC simply didn't have the horsepower to perform well in the AC hi-amperage world of O Gauge model railroading.

Would you explain this? The above statement seems to imply that hi-amp O scale models are too much for DCC to handle, yet DCC seems to work just fine in even bigger G-scale models. Since I would think that if Digitrax can make a G-scale decoder, they could make an O scale one, your statement that DCC can't handle O scale seems rather odd.

QUOTE: Please reread my post. I realize it's long but in section 5 I point out that not one of the DCC firms responded to our offer to enter into a licensing arrangement. While we haven't made such overtures in the O Gauge marketplace, we certainly have in the HO marketplace.

Ah, but was your proposed license reasonable and comparable to other like-agreements in the hobby? For example, Digitrax's patented LocoNet has been licensed to various other companies (like LogicRail) for a "small fee" (their words) to ensure that they don't mess up the message traffic on the LocoNet and to ensure compatibility. Is this what MTH offerered?

QUOTE: You will see that of the patents we received, we only alerted the DCC community about speed control in one scale mile per hour increments.

Um, but you said earlier that you also alerted the DCC community about Bi-Directional communication. Specifically, we informed them of our method of 2-way communications and our form of speed control in one scale mile per hour increments.

Bill Conner wrote:

QUOTE: You HO guys will forget about Athearn Genesis once MTH puts their fine models on the market.

Surely, you are joking. Athearn Genesis F-units are the finest HO F-unit models that have ever been made in any medium (including brass), according to those that know these things (like Andy Harmon of the diesel modeler's list).

Paul A. Cutler III
*****************
Weather Or No Go New Haven
*****************

[Anonymous]

Anyone else pull out their waders, seems we're standing deep in double talk and something that smells fishy. Sorry don't buy the excuses and don't buy the products, Reputations make or break companies and all i see is MTH's Reputation going down, fast. net result, will we see MTH 10 years from now? who knows, all i know is i still won't be buying from them if they are.

[bcammack]

Regarding alternate, non-standard digital command control systems for HO, N, Z, G, et al: That train left the station several years ago, IMO. Anybody presuming that people will abandon a standard in which they've invested hundreds, if not, thousands of their discretionary dollars, simply to have digital scale MPH display/control, is engaging in commercially fatal hubris. That simply is not a sufficiently compelling feature, sorry.

As far as snagging new adopters, I doubt it seriously. Not when you can get a turn-key Bachmann EZ-Command system with a decoder-equipped HO locomotive for $100.

Apparently, bolstered by the $40 million judgement, MTH is taking a page from the Microsoft playbook to bully it's way into an established market. I think they will be disappointed in the long run.

Perhaps they hope to leverage their position amongst O scalers for a strong entre into the HO market, but I doubt that they can gain enough traction that way. Horizon/Athearn/MDC Atlas, and BLI in HO aren't the same as Lionel in O was when they started competing with them. At that time there was a vacuum that they could fill in the marketplace. I don't see that today.

Just my thoughts.

[Anonymous]

Paul

Way cool. Can't wait to see MTH's response.

[amedleman]

Paul3:

1. Sorry about the lack of a signature. It was checked in my profile and appeared in the Preview window but not in the actual posting.

2. I am not familiar with the actual specifics of the speed control methods the other manufacturers utilize. If they aren't in violation then there is no problem. Their engineers need to determine those issues which is why they received notification in the first place.

3. Please remember that you do not need a new control system (DCS) to operate an M.T.H. HO locomotive. Any exisiting DCC controller will work. If you have already invested in a DCC system it will run the M.T.H. engine in command mode.

Below are the features you will have access to when using a DCC controller:

- Operate Locomotive At Scale Speeds
- Activate Whistle/Horn or Bell Sounds
- Hear Squeaking Brakes
- Enjoy Synchronized Puffing Smoke Timed To Driver Revolutions
- Activate Passenger Station or Freight Yard Sound Effects
- Activate Doppler Sound Effects
- Control Smoke Operation
- Control Locomotive Master Volume
- Adjust The Locomotive Chuff Rate

Next, are the features you will have access to when using a DCS system:

- 22 Independent Volume Control Settings
- 16 Adjustable Chuff Rate Settings
- 3 Adjustable Smoke Intensity Settings
- Adjustable Brake Sound Effects
- Adjustable Wheel “Clickity-Clack” Sounds
- 15 Selectable Custom Sounds
- 4 Adjustable Diesel Engine Ditch Lighting Effects
- 120 Adjustable Engine Speed Settings
- 3 Adjustable Locomotive Direction Start-up Engines
- Simple Lash-up Creation
- Simple Route Creation
- Simple Scene Creation
- Record/Playback 90 Minutes of Operation
- Downloadable Locomotive Sounds Sets
- Independent Locomotive Chronometer
- Independent Locomotive Odometer
- Independent Locomotive Trip Odometer
- Track Signal Quality Test
- Linear Track Length Meter
- Trip Odometer
- 2 Independent Engine Reset Features
- Doppler
- Broadcast Your Voice Through The Train's Speaker
- Independent Whistle & Bell Sounds
- 120 Speed Steps – Control engines speed in increments of 1 smph.
- 42 Levels of Programming Option
- Labor/Drift Chuffing Sound Control
- Diesel Rev Up/Down Sound Control
- Speed Boost & Brake Control
- One Touch Smoke On/Off Control
- One Touch Volume Level Control
- Engine Sounds Mute Button
- One Touch Headlight On/Off Control
- One Touch Proto-Cast™ Control
- One Touch Engine Startup Control
- One Touch Engine Shutdown Control
- One Touch Passenger or Freight Sound Activation
- Sound Packages Downloadable from MTH Website

3. The K-4 is just our first HO engine. We have made over 200 models in our Premier Line O Gauge product line having long ago recognized that O consumers have different tastes. We expect no different a reaction from HO consumers. If the K-4 isn't your bag, wait for the next engine. Incidentally, the K-4 is $50.00 less than the Broadway version and contains many more features as detailed in both the DCC and DCS lists above. You'll find even more details at www.mthhotrains.com

4. Amperage draw is a big factor in O because most of the locomotives are produced from die-cast metal and are thus quite heavy. Our AC operated O Gauge Challenger engine outweighs our G gauge model by about five pounds even though the G model is 17 inches longer (engine and tender). It takes more power and amperage to get those O trains moving. Consequently, the electronics must be robust enough to handle the more intense power requirements. Our experience in testing DCC in an AC, hi-amp environment (a locomotive and string of seven passenger cars can easily draw 6 or more amps) was very underwhelming. More importantly, DCC is limited by the number of features it offers and the complexity of its operation. Since DCC had no presence in the O Gauge AC market, developing a newer system that was easier to use and had a lot more features would be far more appealing to new consumers. Our long-term goal is to expand the marketplace by attracting new consumers. If we were going to invest in a control system (DCC or otherwise) we needed to be very confident that the return on the investment to develop the control system would be worthwhile. If new consumers are attracted to the hobby, whether it be in O, G or HO because of DCS, then our return on investment will continue to be strong. The marketplace as a whole will also be greater if more consumers are attracted to it. We think DCS does that.

5. Since none of the DCC manufacturers ever bothered to inquire what our licensing terms would be, they can't comment on whether they were favorable. As with any legal agreement, the terms would be confidential anyway.

6. Sorry for the confusion about the notification. As my original post indicated, the DCC community was notified about both our method of speed control (in one scale mile per hour increments) and our form of 2-way communication.

[rexhea]

Gee's! I guess I need to get to the patent and see if I can interpret exactly what MTH is talking about , but I don't understand what all the fuss is about with two-way communications for speed control.

Industrial Variable Speed Motor drive units (they use Pulse Width Modulation just like DCC) have been doing this for years by using both electrical and mechanical devices, with each type having many different methods including BEMF. Display and control of exact RPM's is based on calibrated feedback just as SMPH would be. MTH should sue Allen-Brandly, Toshiba, Cutler Hamner, GE, etc...[:D]