Court Approves Lionel's Bankruptcy Plan and Settlement with MTH by Erol Gurcan

In what should be one of their last court appearances, lawyers for MTH, Lionel and Sanda Kan (Lionel’s principal manufacturer of trains) appeared in a New York Bankruptcy Court on March 27th.

At the end of the hearing, Judge Burton Lifland approved Lionel’s confirmation plan for reorganization. The court also approved Lionel’s settlement with MTH.

Click the link below to read on

Neil Young And Lionel To Buy Out Partner Of Creative Trains

Neil Young (actually his family trust) and a partner, Louis Kovach, own a company called Creative Trains.  Creative Trains and Lionel are partners in a venture called Liontech.  Liontech is the brains behind the development of TMCC.  Mr. Kovach has agreed to sell his 50% share of Creative Trains to Neil Young and Lionel for $650,000.  The Bankruptcy court has to grant permission to Lionel to make the purchase and is scheduled to hear the request on 2/21/08.  Read the entire story here.

Bankruptcy Court Grants Lionel 7th Extension: MTH Motion to Extend TRO Granted by Erol Gurcan

There was some model train litigation involving Lionel and MTH in two different courts on 1/10/08.

Firstly, in the New York City Bankruptcy Court, Lionel’s motion for a 7th extension of the exclusive period in which to file its reorganization plan, was granted by Judge Lifland. MTH’s lawyer, Alec Ostrow did not oppose the motion. The court’s order gives Lionel the exclusive right until March 31 file its plan with the court. Others including MTH may file alternative plans after that up and until May 30.

Click on the link below to read on

MTH Attempts To Collect $$$ From Korea Brass by Erol Gurcan

In my last legal article, (written at the request of the Coil Couplers web site), I stated that in MTH’s fraudulent transfer of assets lawsuit against Korea Brass aka Hagye Trading/Model Korea Trading (MKT), the court on November 20, 2007 issued a temporary restraining order (TRO) and entered an order directing all monies paid by Lionel to Korea Brass were to be deposited into a court approved interest bearing escrow account. The practical effect of this was, Lionel, which is not a party in MTH’s lawsuit against Korea Brass, will not be able to take delivery of trains that it paid for and which were manufactured by KB, since the money is going into a court escrow account rather than directly to KB. Ultimately, we hobbyists will not be able to purchase the trains which are affected in these legal proceedings, at least for now.

Click on the link below to read on

AP Report: Lionel Struggles To Exit Bankruptcy

An Associated Press report published yesterday in the Houston Chronicle states that Lionel is having difficulty securing financing for its exit from Chapter 11 bankruptcy.  The reason for the struggle is due to the credit crunch "fueled by the subprime mortgage industry."  Jerry Calebrese, CEO of Lionel is quoted in the article:

"We're not naive, an awful lot of people that would want to make a substantial equity investment in a company like ours want to have a meaningful say in what's going on and we understand that"...

"Whether that means a substantial minority or an effective majority, it doesn't matter as long as they have common vision of what we're trying to do. It matters a lot if they're short-term investors."

Based on Mr. Calabrese's comments it seems Lionel now has to turn to private equity investment as an option which could be very interesting if the investment comes from a company or individual that wants to be actively involved in the operation of the company.

Lionel is not the only company having difficulty trying to exit bankruptcy due to the credit crunch.  The article states auto-parts supplier Delphi as another example.

Read the AP article here.

Legal Explanation of Latest Coil Couplers Posts

Over the last two days, there have been a few posts on the Coil Couplers of America website stating that MTH has cut off Lionel’s supply of locomotives, including some of the new Legacy models, from its supplier Model Korea Trading Company (aka MKT, the company named in the Coil Couplers post of the last two days) due to the court ordered stoppage of payments by Lionel.

Click on the link below to read on

Current Status Of MTH, Lionel Lawsuits Settlement By Erol Gurcan

My goal is to keep this report short and sweet (a novel concept for a lawyer). Here is the current status of the MTH Lionel settlement as of this morning.

MTH's and Lionel's lawyers were back in bankruptcy court on October 25th. Lionel CEO Jerry Calabrese and Mrs. Martin Davis were present. MTH's Mike Wolf was not. It was not necessary for him to be. I also attended the proceedings.

Click on the link below to read on

AP Story About Lionel Bankruptcy

The Associated Press ran a story this week about the Lionel Bankruptcy hearing.  Read the story here.

Lionel And MTH Making Progress In Trade Secrets Case By Erol Gurcan

It's been about 2 months since I have written anything substantive about the Lionel MTH Trade secrets case or about the status of Lionel's bankruptcy. That's because there was little going on in the proceedings during this period of time. As you may recall, on August 13, MTH filed an appeal concerning Judge Lifland's August 2 rulings in favor of Lionel. On August 2, Judge Lifland ruled that any future trial (the Bankruptcy Code 502(c) damages estimation hearing) in the trade secrets case would be held before him, instead of in the Federal District Court in Detroit Michigan, and granted a fifth extension of time to Lionel to file an exclusive bankruptcy plan with the court. MTH had opposed Lionel's motion for exclusivity and proposed three alternative plans which were rebuffed by Judge Lifland.

Click on the link below to read on

Model Train Author Paul V. Ambrose Sues Train Collectors Association by Erol Gurcan

Model train author Paul V. Ambrose has sued the national Train Collector's Association (TCA) and also its Eastern Division, the entity that hosts the yearly York meets in April and October. Although there was a lot of discussion about the lawsuit, little was said about the basis and details of it.

Click the link below to read on

Lionel Wins Major Rulings In Bankruptcy Court

Lionel won two major and important rulings from Judge Lifland in the bankruptcy court this morning. The more important of these was the decision that the future trial (in others words,the Bankruptcy Code section 502c "damages estimation hearing') in the trade secrets case would be tried before the judge, instead of a jury trial in the Federal District Court in Detroit, Michigan. The second important ruling was Lionel was granted a fifth extension of time, giving it the exclusive right to file its bankruptcy reorganization plan.

Click on the link below to read on

Baltimore Sun Runs Article About MTH vs. Lionel

The Baltimore Sun ran an article about the MTH vs. Lionel case.  The article contains quotes from Lionel's CEO, Jerry Calabrese, the lead attorney for MTH and Tom McComas of TM Books & Video.  Read it here.

MTH Proposes Alternative Reorganization Plans To Bankruptcy Court by Erol Gurcan

In my last article, I summarized that Lionel and MTH were in court on June 27th, with Lionel’s attorneys were attempting to convince Bankruptcy Judge Burton Lifland that he should try the trade secrets and separate $17.5 million dollar patent infringement case to expedite their exit from bankruptcy. MTH’s attorneys had cross-moved to send the trade secrets case back for trial to the Federal District Court in Michigan, the court where a jury awarded them $40.7 million dollars in June 2004.

Click on the link below to read on

Bankruptcy Court Judge Begins Hearing Motions on Future Trial Venue by Erol Gurcan

Lionel and MTH’s attorneys were back in a New York bankruptcy court on June 27th before Judge Burton Lifland. Interestingly, the courtroom was crowded since a lot was potentially riding on the hearing. Lionel’s CEO and President Jerry Calabrese, and Chief Financial Officer Scott Turkington were present in court. They were scheduled to testify and later did. More about that later. Mrs. Martin Davis was present as well. MTH’s Mike Wolf was not.

Click on the link below to read on

Another Lawsuit...

News of another O Gauge related lawsuit is spreading through the O Gauge community.  The good news is that this one doesn't involve manufacturers.  The bad news is that if the allegations are true, an author's reputation could be forever damaged.

The lawsuit has been filed by Paul V. Ambrose against David Doyle and Wisconsin based Krause Publications.  O Gauge collectors will recognize Mr. Ambrose as a prominent Lionel Post War trains collector and one of the partners of Ambrose/Bauer Trains, an auction house specializing in the sale of model trains and accessories.  More importantly, Mr. Ambrose has also authored or co-authored many Greenberg Guides to Post War Lionel trains (trains manufactured by Lionel between 1945 and 1969).  Many O Gauge collectors consider Greenberg's Guides to be the preeminent source of information pertaining to O Gauge Trains, especially those produced by Lionel.

The defendant in the case, David Doyle, has also authored many books including some on Lionel's post war trains. His latest book dealing with post war Lionel trains is entitled the Standard Catalog of Lionel Train Sets 1945-1969.  Can you see where this is headed?  Mr. Ambrose is alleging that Mr. Doyle violated copyright laws by publishing Mr. Ambrose's work in the Standard Catalog of Lionel Train Sets 1945-1969 without prior permission.

Before you roll you eyes on this one, read the following paragraph from the Complaint: 

Lionel and MTH Motions Adjourned to June 27:Lionel Looses $1.25 million in May by Erol Gurcan

In my last article, I stated that Lionel's motion for the damages estimation hearing (which would actually be a trial on this issues of potential liability and damages in the trade secrets case) and MTH's cross-motion to have the trial take place in the Federal District Court in Michigan (the court where the jury awarded MTH $40.7 million dollars on June 7, 2004) were scheduled to be heard in the New York Bankruptcy Court today. However, both motions were adjourned to June 27, 2007. Thus, nothing occurred in court today on this matter.

Click on the link below to read on

MTH Lionel Trade Secrets Case: MTH Withdraws Supreme Court Appeal. What's Next? by Erol Gurcan

MTH has abandoned its plans to seek redress in the United States Supreme Court concerning the trade secrets case. On May 30, 2007, MTH filed a motion (an application for a court order) with the Sixth Circuit Court of Appeals to vacate the 90 day stay that was previously granted by it so they could file a write of certiorari with the US Supreme Court. The Sixth Circuit has not decided the motion yet, but there is no reason to think that they will not grant it. Certainly, Lionel is not going to oppose it, and it will make less work for the US Supreme Court.

So the question becomes, Where do we go from here, or what happens next?

Click on the link below to read on

A Review Of Lionel's Bankruptcy Reorganization Plan by Erol Gurcan

Lionel filed its bankruptcy reorganization plan with the court on May 21. This was an important and necessary step in moving the trade secrets and patent infringement litigation forward, and in beginning the process to exit from bankruptcy.

I recently reviewed Lionel’s bankruptcy reorganization plan filed with the court. It contains some surprising and interesting legal, financial and hobby related information. Is Lionel opening a new office, now much does Lionel spend a year on new tooling, how much does it earn a year in royalties based on its trademark, and what are MTH’s annual sales based on Lionel’s estimates? If you would like to know the answers to these questions and more, then read on. The information for this post was obtained from Lionel’s reorganization plan filed with the bankruptcy court.

Lionel Files Reorganization Plan: Parties Unable To Settle Legal Disputes by Erol Gurcan

Lionel and MTH's attorneys were back in a New York bankruptcy court 5/22/07. Lionel CEO Jerry Calabrese was present in court. MTH's Mike Wolf was not.

Lionel's lawyer, Adam Harris quickly informed Judge Lifland that Lionel filed their bankruptcy reorganization plan with the court yesterday. Among the items in the plan is payment in full of all unsecured claims with interest. The plan is necessary in order for Lionel to begin their exit from bankruptcy. Lionel has been in bankruptcy since November 15, 2004, a period of over 2 1/2
years.

Click on the link below to read on

MTH Lionel trade secrets case: Headed to US Supreme Court? by Erol Gurcan

As you may recall, on April 19, 2007, the Sixth Circuit Court of Appeals denied MTH's petition for a rehearing of its December 14, 2006 decision in the trade secrets case. That earlier decision vacated the jury's $40.8 million dollar judgment against Lionel and codefendant Korea Brass, and remanded the case to the District Court in Detroit, Michigan for another trial. Bankruptcy Judge Burton Lifland in New York has stated in the past he will hold a damages estimation hearing in the trade secrets case rather than let another trial take place in Detroit. The two model train rivals were recently holding mediation talks in New York in both the trade secrets case and patent infringement case. The next court date in the bankruptcy court is May 22.

Click on the link below to read on

Appeal's Court Denies MTH's Petition For Rehearing by Erol Gurcan

On April 19, The Sixth Circuit Court of Appeals denied MTH's petition for a rehearing of its December 14, 2006 decision. That earlier decision vacated the jury's $40.8 million verdict in favor of MTH in the trade secrets case, and remanded it to the Eastern District of Michigan for another trial. While the above news is certainly important, it is not unexpected. I stated in a post in January that MTH's chances of prevailing on the petition were small. Additionally, MTH's Attorney Alec Ostrow stated at least twice at the bankruptpcy court conference on January 9, 2007 that is was unlikely MTH would prevail on the petition.

The more important question now becomes, what is going to happen now that the appeals process is over. Where do we go from here?

Click on the link below to read on

Associated Press Article About Lionel's Bankruptcy

The Detroit news is running an Associated Press article concerning Lionel's bankruptcy.  Read it here.

UPDATE:  Check out Erol Gurcan's report here.

Court Grants Lionel's Motion; Mediation Begins by Erol Gurcan

Lionel and MTH's attorneys were back in bankruptcy court the morning of February 22nd for both a motion and status conference. Lionel CEO/President Jerry Calabrese and MTH owner Mike Wolf were not in court today. It was not necessary for them to be present. Both attended the last bankruptcy court conference on January 9 when both sides agreed to mediation. I attended today's court proceedings.

Click on the link below to read on

Lionel Files Request to Extend Deadline for Chapter 11 Reorg Plan by Erol Gurcan

On February 9, 2007, Lionel filed a motion (an application for a court order) with the bankruptcy court seeking an extension to file a chapter 11 reorganization plan. The motion seeks an exclusive 75 day period in which it be allowed a to file a plan after the appeals court either denies, or issues a final decision regarding MTH's petition for a rehearing of the trade secrets case appeal. On December 14, 2006, the Sixth Circuit Court of Appeals reversed the trial court jury's $40.7 million dollar verdict ($38.6 million directly against Lionel) rendered in June 2004, and remanded the case to the trial court for another trial.

Click on the link below to read on

Lionel Seeks Extension for Chapter 11 Plan

Lionel has asked the bankruptcy court to extend the deadline for filing a reorganinzaion plan.  Read the story here.

Lionel and MTH Sign Agreement for Mediation by Erol Gurcan

On January 30, 2007, the attorneys for both Lionel and MTH signed a stipulation (legalese for agreement) agreeing to mediate MTH's separate trade secrets and patent infringement claims against Lionel. Bankruptcy Judge Burton Lifland "so-ordered" (approved) the stipulation on February 1, 2007. When the parties were last in the bankruptcy court on January 9, 2007, Lionel's attorney suggested mediation, MTH's lawyer agreed, and Judge Lifland directed the parties to do it.

Click on the link below to read on

Appeals Court Orders Lionel To Respond To MTH's Petition by Erol Gurcan

On January 18, 2007, the Sixth Circuit Court of Appeals posted on its PACER web site that a letter was sent to Lionel's lawyer, Walter Dellinger, notifying him to respond MTH's petition (filed with the court on December 28, 2006)for an en banc hearing. Lionel's response is due by February 1, 2007. An en banc hearing means that the full court will consider it, which could be a group of anywhere from 15-20 judges (in other words all the judges of the court), instead of the 3 that orginally heard the appeal on June 7, 2006.

Click on the link below to read on

MTH and Lionel Appear in Bankruptcy Court by Erol Gurcan

January 9, 2006-For the first time since December 14, 2006, when an appeals court vacated MTH’s $40.7 million dollar trade secrets verdict against Lionel, and remanded the case for another trial, attorneys for the two rival model train makers appeared in the Bankruptcy Court for the Southern District of New York today.

Click on the link below to read on

MTH Files Petition For Rehearing with Appeals Court by Erol Gurcan

Those of us following the legal proceedings in the MTH Lionel trade secrets case know that on December 14, 2006, a three judge panel of the Sixth Circuit Court of Appeals unanimously reversed the district court jury’s $40.7 million dollar verdict, and granted Lionel’s motion for a new trial, and remanded the case to the district court for that purpose.

Click on the link below to read on

Lionel Earns $2.8 Million Profit in November 2006 by Erol Gurcan

On December 14, 2006, Lionel filed its monthly operating report for November 2006, with the bankruptcy court. For the month of November, Lionel posted a profit, or net income of $2,868,000. Its monthly disbursements were $6,818,000. The report was affirmed to by its Chief  Financial officer, Scott Turkington. Lionel is required to file a monthly operating report since it is in bankruptcy. November’s numbers were obtained directly from its profit and loss summary filed with the court.

Click on the link below to read on

More Press Coverage of MTH v Lionel Court Ruling

Lionel Awarded New Trial In Model Trains Trade Secrets Case, Associated Press
Appeals Court Sends Lionel-MTH Back To Square One, Classic Toy Trains

UPDATE:
Lionel's Press Release

Related Posts
Summary of Appeals Court Ruling in MTH v Lionel Trade Secrets Case

Summary of Appeals Court Ruling in MTH v Lionel Trade Secrets Case by Erol Gurcan

On June 7, 2004, the jury in the trade secrets case ruled in favor of MTH and awarded them $40.7 million dollars as follows; $11,978,887 for PAST lost profits, $13,794,518 for FUTURE lost profits, and $12,834,820 against Lionel, and $2,167,440, against codefendants Korea Brass and Yoo Chan Yang for UNJUST ENRICHMENT. Lionel filed for bankruptcy in November, 2004, and filed a notice of appeal, in January 2005. Korea Brass did not appeal.

In a nutshell, overall, today's appeals court's decision is favorable to Lionel, and not to MTH.

Click on the link below to read on

Court Rules on Lionel's Appeal

Just heard from my friend Erol Gurcan and he stated that the court (Sixth Circuit Court of Appeals in Cincinnati Ohio) has ruled on Lionel's appeal of the $40.7 million dollar judgment obtained against it by MTH.  Erol's reading through the court documents now and expects to have a summary of the decision out soon.  Stay tuned.  Thanks for the tip Erol!

   

Related Posts
A Status On Lionel's Bankruptcy; How Long Will It Last? by Erol Gurcan (7/21/06)

An Example of the Impact of the MTH - Union Pacific Settlement

I found the following in a periodic newsletter I receive from Athearn, maker of N and HO scale products.

"There's big news on the Union Pacific license. The terms have been changed, and we no longer have to pay the railroad in order to make models with their marks. We'll be rolling our prices back on all existing inventory and on all items announced but not yet shipped to match the pricing of all the other road names in each category."

A great example of the impact the new agreement is having on the model railroad industry.

Insights Into The MTH Union Pacific Settlement by Erol Gurcan

November 8, 2006 - As some of you know by now, MTH and Union Pacific issued a joint press release late this afternoon stating UP’s trademark infringement case against MTH  has been amicably resolved.   However, the settlement has broader beneficial implications for both the other model train manufacturers and hobbyists alike. First, the agreement  means that UP’s case against MTH has been resolved and will be discontinued in the near future without anymore money being spent on lawyers. Thus, more money for research and development, new tooling and electronics.  Secondly, the agreement is significant in that it  means all model train manufacturers will be allowed to use UP logos and trademarks forever without having to pay a royalty. Mike Wolf confirmed to me today that this agreement also applies to Lionel despite its  settlement and licensing agreement entered into almost two months ago. More about that later.

Click on the link below to read on

MTH Settles with Union Pacific

I received this from MTH:

FOR IMMEDIATE RELEASE

Union Pacific, M.T.H. Electric Trains Settle Trademark Dispute

November 8, 2006 - M.T.H. Electric Trains and Union Pacific Railroad are pleased to announce that they have amicably settled the trademark infringement case that U.P. filed against M.T.H in Omaha, Nebraska federal court.  The settlement benefits both parties, as well the entire model railroad industry.  It allows Union Pacific to continue to protect its intellectual property, and authorizes M.T.H.’s use of Union Pacific’s trademarks and paint designs on model train products and accessories.  Union Pacific has also decided to change its trademark-licensing program so that model railroad manufacturers will no longer have to pay a royalty, and will enjoy a perpetual license to use Union Pacific trademarks and paint designs on model railroad products.

Click on the link below to read on

Coil Couplers Continues To Distort The Legal Facts by Erol Gurcan

November 1, 2006-O gauge hobbyists who regularly read the Coil Couplers Of America web site, know it is  pro-Lionel, and funded by rock singer Neil Young, who is also a 20% owner of the company. The web site is also independent of Lionel LLC and does not speak for them on an official level, but does occasionally cite un-named sources within the company for its information.   

However, the Hi-Rail Times section of the Coil Couplers web site continues to distort the truth regarding the legal proceedings between MTH and Lionel, thereby possibly confusing O gauge hobbyists interested in the various legal proceedings. It has once again become necessary to set the record straight regarding their latest post.

UPDATE 11/3 - Hi-Rail Times responds to Erol's article.

Click on the link below to read on

Jerry Calabrese Comments on Union Pacific Trademark Infringement Settlement and Lionel’s Recent Sales By Erol Gurcan

September 16, 2006-On September 13, 2006, I wrote an article stating Lionel had settled the trademark infringement lawsuit brought against it by Union Pacific and had entered into a licensing agreement with them. The next day, Lionel CEO Jerry Calabrese posted a statement on its web site confirming the licensing agreement and thanking UP for working with Lionel to resolve the situation.
Earlier today, I talked with Mr. Calabrese and discussed the trademark infringement settlement and Lionel’s recent sales. He wanted me to pass along a few comments about our conversation.

Click on the link below to read on

Lionel Releases Statement About Union Pacifc Lawsuit

Lionel's CEO, Jerry Calabrese, released a statement about Lionel's settlement with Union Pacific concerning trademark infringement.  Read it here.

 
 
 

Related Posts
Union Pacific and Lionel Settle Trademark Infringement...
A Summary Of The Union Pacific MTH Trademark Infringement...

Union Pacific and Lionel Settle Trademark Infringement And Enter Into Trademark Licensing Agreement

September 13, 2006-Lionel has settled the trademark infringement lawsuit brought against it by UP. Additionally, the two have also entered into a trademark licensing agreement. However, the court where Lionel’s bankruptcy has been pending since November 15, 2004, must approve the deal since they are in bankruptcy. To that end, Lionel’s attorney’s filed two motions (an application for a court order) in the United States Bankruptcy Court for the Southern District of New York on September 13, 2006, requesting, 1) the court approve the agreement entered into by the two parties, and 2) requesting the court make some of the terms of the agreement confidential. The motions are currently scheduled to be heard on October 11, 2006. The information for this article was obtained from the two motions.

It is expected the motion requesting the court to approve the lawsuit settlement and

Click on the link below to read on

A Summary Of The Union Pacific MTH Trademark Infringement Case by Erol Gurcan

August 11, 2006-Over the last several months, there has been a lot of discussion on the OGR on line forum about the validity (or lack thereof) of Union Pacific’s three trademark infringement lawsuits (against Lionel, MTH and train photographer Nils Huxtable), but little information concerning the specifics in each lawsuit. There was also plenty of discussion last week because of a UP press release on its web site regarding its trademark licensing program. That memo stated in part;  Click on the link below to read on

Bankruptcy Court Approves Lionel’s Motion to Extend its Time to File For Reorganization by Erol Gurcan

July 25, 2006-In my article dated July 21, 2006, I stated Lionel’s attorneys had recently filed a motion (an application for a court order)  with the bankruptcy court seeking to extend its time to file a plan of reorganization. The motion specifically requested that Lionel be given 120 days to file a plan of reorganization with the court once there is a decision in the MTH-Lionel trade secrets appeal heard on June 7, 2006. A decision in that case is expected late this year or early next year. Lionel’s motion also sought an additional 60 days to allow other interested parties, such as Lionel’s creditors (like MTH) to file their own plan with the court, once Lionel’s plan was filed. In my July 21 article, I stated I expected the motion to be granted.  Click on the link below to read on.

A Status On Lionel's Bankruptcy; How Long Will It Last? By Erol B. Gurcan

Those of us following the various legal proceedings in the 3 rail world know that Lionel has been in bankruptcy since November 15, 2004, now a period of 20 months. While that may not sound like a long time to some, by comparison,  K-Line’s bankruptcy was over and done with in 8 months, and they did not emerge from it. (K-Line’s tooling and assets were purchased by its principal manufacturer Sanda Kan in April 2006, who in turn, licensed them to Lionel as part of a licensing and marketing agreement).   Click on the link below to read on.

MTH Dropping Patent Infringement Lawsuit Against Lionel

Here's the press release received by OGaugeWatch today from MTH's Andy Edleman, VP of Marketing, announcing that MTH has dropped the patent infringement lawsuit with Lionel.

June 20, 2006 – M.T.H. Electric Trains announced today that it is dropping its patent infringement lawsuit with Lionel after both Lionel and M.T.H. agreed to wait on the Sixth Circuit Court of Appeals ruling in the theft of trade secrets case between the two firms. That ruling is expected in six to eight months at which point the patent infringement case could be revisited should Lionel need to resolve it in order to exit from bankruptcy. 

The patent infringement suit was filed by M.T.H. in response to Lionel’s motion for discovery of M.T.H.’s patent infringement claim using Bankruptcy Rule 2004, a particularly invasive form of discovery that afforded M.T.H. no confidentiality protection for information uncovered during the discovery process.  Consequently, information obtained during the discovery could have been shared with Lionel’s engineering and marketing teams and provide the company with an inside look at M.T.H.’s plans for its technology.

Related Posts

MTH Files Patent Infringement Case Against Lionel by Erol B. Gurcan

Lionel's CEO, Jerry Calabrese, Comments On Latest MTH Lawsuit

MTH Responds To Lionel's Statements On New Patent Infringement Lawsuit

MTH Releases A Time Line Of Developments That Led MTH Into Latest Lawsuit With Lionel

MTH Releases A Timeline Of Developments That Led MTH Into Latest Lawsuit With Lionel

Mr. Andy Edleman, MTH's VP of Marketing, in his response to Lionel's statement about the new patent infringement lawsuit filed by MTH against Lionel, stated he would produce a timeline of events supporting MTH's decision to move forth with the patent infringement lawsuit.  In his initial response Mr. Edleman commented:

"...we believe consumers who desire to understand the nature of this dispute would be best served by reviewing an assortment of documents that lays out how this entire dispute began...  Beginning Wednesday, June 14, 2006, a timeline of events complete with a series of downloadable documents will be available via various online forums that illustrates Lionel’s actions and M.T.H.’s counter actions in the brightest of light.

Mr. Edleman has graciously supplied OGaugeWatch.com with the timeline which includes links to  several documents.  Here is the timeline document in it's entirety:

"The following timeline illustrates the developments of patent infringement issues between M.T.H. Electric Trains and Lionel over the past four years. Under each date we have included a link to a PDF document that contains either actual correspondence between M.T.H. and Lionel counsel or court documents pertaining to the actual issue.

Consumers interested in understanding in more detail the actual events between the two firms, as they occurred, will find this information far more helpful than a press release designed to put the firm's best foot forward. With this information, consumers will be able to see both company's tactics and concerns so that one can draw a more balanced impression of what has been occurring in our industry.

It is our hope that when such information is digested, M.T.H.'s actions will be better understood.

MTH Responds to Lionel's Statement On New Patent Infringement Lawsuit

MTH's Mr. Andy Edleman, Vice President of Marketing, responded to Jerry Calabrese's statements concerning MTH's latest lawsuit.   In his response, Mr. Edleman explains why MTH made the decision to file the patent infringement lawsuit.  Below is Mr. Edleman's statement in it's entirety.

"June 13, 2006 – Regretfully M.T.H. Electric Trains feels compelled to respond to Lionel’s statement regarding our recently filed lawsuit in the Southern District of New York Bankruptcy Court. The action was filed against Lionel LLC for patent infringement pertaining to Lionel’s inclusion of certain patented features found in M.T.H.’s sound and train control technology.