Suit Alleges Lionel Using Rival’s Designs

Lionel, the world’s largest marketer of model trains, was accused by a rival, Mike’s Train House of Columbia, Md., of misappropriating trade secrets for design and production of innovative model railroading equipment. In a lawsuit filed April 5 in federal court in Baltimore, Mike’s says its business has been built over the last 15 years on making the most realistic model trains in the industry. The company says Lionel--which has been selling model trains for a century, and has contracted since 1998 with Seoul-based Korea Brass Co. to make the die-cast products--is wrongly shipping trains based on Mike’s electro-mechanical designs that were stolen from its own Korean model maker, Samhongsa Co. Mike’s is seeking an order that Lionel not sell any trains based on the allegedly stolen specifications, recall shipped trains and award damages based on Lionel profits. The suit notes that in 1998 and 1999, three Samhongsa employees and a Korea Brass employee stole Mike’s trade secrets from computer databases in Korea and gave them to Korea Brass. The four later were charged with theft by Korean authorities, pleaded guilty and await sentencing, the suit says. Officials of Chesterfield, Mich.-based Lionel could not be reached for comment.