Later career
MTH has also traded lawsuits with Quantum Sound Industries, whose technology is used to add electronic sound to model locomotives from various manufacturers. MTH's critics also say the company patented some elements of DCC, which was supposed to be an unencumbered open standard.
As of June 2004, MTH has 57 employees and annual sales of about US$ 40 million. News reports from the fall of 2004 estimated MTH's annual sales at closer to $30 million. As a privately held company, MTH does not officially release sales figures. In its 2007 reorganization plan, Lionel estimated MTH's annual revenue at about $30 million and stated that MTH is the second-largest manufacturer of O gauge trains in terms of market share.
Although MTH is disliked by Lionel collectors because its reproductions have lowered the market value of all but the most pristine vintage Lionel equipment and disliked by some other hobbyists because of its aggressive marketing and legal tactics, MTH is widely credited with bringing innovations into a hobby that had changed very little since the 1950s as well as lowering prices.
On December 30, 2005, the Union Pacific Railroad sued MTH for using its logos, along with logos of various fallen flag railroads it had acquired, without a license. UP had previously sued other manufacturers, most notably Lionel and Athearn, for the same reason. At the time of the suit, UP had 104 licensees. The suit requested that MTH stop using the trademarks, pay damages, and send UP-branded inventory to the railroad for destruction.
On November 8, 2006 MTH Electric Trains and Union Pacific Railroad announced that they had amicably settled the trademark infringement case that U.P. filed against MTH in the Omaha, Nebraska federal court. The settlement benefits both parties as well the entire model railroad industry, allows Union Pacific to continue to protect its intellectual property, and authorizes MTH’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.
In late 2007, Lionel and MTH settled their long-term fight over trade secrets and patent infringements. In March 2008, the court approved a settlement, which has its details under court seal, that includes a one time cash payment to MTH that will take place soon after Lionel exits bankruptcy.
In 2009, Lionel Electric Trains (Lionel, LLC) and MTH Electric Trains began working together under the Lionel Corporation banner. For three decades, MTH Trains had been making Tinplate Reproductions of trains, but did not have the authentic Lionel and American Flyer graphics on the models and boxes. In 2009, the two joined forces, allowing MTH Trains to produce the Lionel tinplate electric trains with the official graphics. The interior electronics are from MTH Electric Trains, but the exterior bears the Lionel Corporation graphics.
In June 2020, it was announced that the CEO, Mike Wolf, will be retiring. Initially, the company was planning to shut down at the end of May 2021,[2] but since then, the company relocated to 6660 Santa Barbara Road in Elkridge, MD 21075 and continues to produce and market RailKing O Gauge and Premier Line O Scale models with the remaining tooling in its portfolio.
On January 31, 2021, ScaleTrains.com has announced they have acquired MTH's HO and S scale tooling.[3][4]
The licensing agreement between M.T.H. and Lionel LLC to manufacture tinplate trains with the Lionel logo were terminated in 2019. While an option to continue the relationship was proffered, the renewal terms offered by Lionel for an extension beyond 2019 were not conducive for any future M.T.H. tinplate plans.
- Classic Toy Trains (March 1994). CTT Visits Mike's Train House. Classic Toy Trains, page 106.
- Grossmann, John (February 2005). Train Wreck. Inc., page 84.
- Hollander, Ron (February 2001). Let's call the whole thing off. Classic Toy Trains, page 97.
