|Jerry Calabrese statement concerning K-Line lawsuit
As many of you already know, Lionel has filed a lawsuit, asking the court to stop one of our competitors, K-Line, from selling products that we believe contain Lionel's technology that was obtained illegally. We recently discovered the situation when we examined the computer records of our former chief engineer and confronted him. Faced with our findings, he admitted that, while under exclusive contract as a Lionel employee, he had also been working with another former Lionel employee, and K-Line, to develop for them a number of tech innovations, all of which were based on proprietary Lionel innovations and patents.
Please be assured that we did not take these actions lightly. Like many of you, we are weary of legal battles and the time and money it takes to wage them. At the same time, though, we are fully resolved to do whatever must be done to protect our valuable intellectual property that is essential for our survival as a company. I also want to assure you, our loyal customers, that none of these legal distractions will keep us from our primary responsibility of building and offering the highest quality and most affordable products we can possibly make. 2005 has been a great year for Lionel, with near record sales and, more important, predictable and steady delivery of promised products, for which we thank you.