I think you are reading it wrong, it is just bad English. The subcontractor's (MTH) designs were allegedly stolen by Lionel, MTH sued, and the court agreed. Lionel had been knocked for several years for their lack of innovation. They apparently tried to get over that by stealing designs and IP from MTH. What would you have done if you were on MTH's shoes?
Now THAT would change the meaning of that sentence entirely.
The sentence read that a subcontractor stole designs FROM MTH.
Damn! And I had such a fine rant going!
No, you are reading it wrong. A South Korean brass company that manufactured some of the Lionel Designs also manufactured for MTH... and someone mis-appropriated the MTH designs AT the Korean end. Lionel actually knew nothing of this until they published their catalog and MTH sued.