M.T.H. Responds To DCC Lawsuit Allegations

[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.

[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?

[3railguy]

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

WE DO!!!!

[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]

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.

[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!

[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!!!!

[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!

[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.

[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]

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]

[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].