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Judge affirms $40.7 million award to MTH

A federal court judge has affirmed a $40.7 million award to MTH Electric Trains, bringing to an end the lawsuit between MTH and Lionel over the use of stolen toy train manufacturing plans.
In addition, the court permanently banned Lionel LLC and Korea Brass from ever using the disputed design drawings or tooling developed from those drawings in the future. Judge John Corbett O'Meara denied a request made by Lionel and Korea Brass for a directed verdict.

The orders, filed Nov. 1 in federal court in Detroit, Mich., bring the civil case to its conclusion, although Lionel has stated it will file an appeal.

MTH in 2000 accused Lionel and its South Korean manufacturing partner of using drawings that were stolen in South Korea to produce locomotives. The drawings, actually computer files, were for mechanical and electrical subassemblies.

In June 2004, after an 18-day trial, jurors sided with MTH and awarded it $40,775,745 in damages.

The drawings were stolen in 1998 or 1999 from Samhongsa, MTH's former South Korean manufacturing partner, and, according to the lawsuit, were discovered in the hands of a design firm that did subcontract work for Korea Brass. Four South Koreans were arrested by South Korean authorities and subsequently convicted in the case, according to the lawsuit.

Korea Brass and its representative in the United States, Yoo Chan Yang, were defendants along with Lionel in the case.

The court found that Lionel and Korea Brass misappropriated "trade secrets" for 20 pieces, listed in court documents as the:

Baby Hudson, Baby Pacific, Starter Set Hudson Jr., Scale C&O Allegheny, Scale Union Pacific Big Boy, Scale N&W Class A, Scale Lumber Shay, Scale PRR T-1, Scale Challenger, O Gauge Tinplate Hiawatha, Scale NYC Hudson, N&W Auxiliary Tender, UP Auxiliary Tender, Baby Challenger, Scale Dryfuss Hudson (sic.), Scale PRR S-2 Turbine, Scale PRR K-4, Baby 0-8-0, Scale Empire State Express, Baby Blue Comet, Tinplate 392E.

The locomotives designated Baby Hudson, Baby Pacific, Starter Set Hudson Jr., and Baby Challenger appear in Lionel's 2004, vol. 2 catalog.

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