I read a clip on Thursday from the Chicago Sun Times that Lionel and K-Line has settled out of court on the lawsuit.
Quote: ( Lionel LLC, which bills itself as the largest US maker of model trains, said it settled a trade-secrets lawsuit against competitor K-Line Electric Trains Inc for as much as $700,000.00. Lionel sued the US Bankruptcy court, alleging K-Line enlisted a Lionel engineer “to work surreptitiously with K-Line and incorporate Lionel’s current sound, speed control and electical transformers” into K-Line products. )
They go on to say an agreement has been reached in which K-Line will stop selling all products that use Lionel’s technology by year’s end.
I wonder if the the money if actually paid to Lionel will go to MTH for the start of their payment.
K-Line has a website http://www.k-linetrains.com/.
Here’s what K-Line has to say about the agreement:
"K-LINE and Lionel Reach Technology Agreement
Chapel Hill, NC - K-LINE Electric Trains is pleased to announce that the lawsuit with Lionel has been settled through negotiation. We will continue to ship all of our products as catalogued and advertised.
While K-LINE hired as an outside consultant a Lionel engineer, Marty Pierson, he was not hired to develop advances on Lionel technology, but to create superior alternatives. For example, K-LINE’s Cruise Control is not related in any way to Lionel’s Odyssey System.
The sound and speed control products were developed by Mr. Pierson in collaboration with K-LINE engineers. However, certain agreements he signed as a Lionel employee gave Lionel a claim of ownership of this work. K-LINE has agreed to pay a royalty for the use of this technology through January 31, 2006.
“We are satisfied with the outcome of the negotiation. However, we prefer to compete in the marketplace rather than the court system which only hurts consumers, adding cost to the products of all parties”, said Maury D. Klein, President of MDK / K-LINE Electric Trains. “K-LINE will continue the evolution of our technology in engines and transformers, as well as other products. Upgrades are already in the development stream. We certainly agree with two contentions that Lionel made in their lawsuit: K-LINE offers superior technology, and at considerably lower prices. We will maintain that leadership.”
The key elements of the settlement include:
K-LINE will continue to deliver all products with the sound, speed control and transformer technology at issue and pay a royalty to Lionel through January 31, 2006
The agreement places no restrictions of any kind on wholesalers and retailers selling these K-LINE products before or after January 31, 2006
The agreement has no impact on K-LINE’s on-going license o
Thanks CapnAmerica for the K-Line added information. The clip I read was limited and seemed to say Lionel is getting some monies, but was not clear on the overall issue.