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Reply to "Atlas' Acquisition of MTH Tooling"

@Landsteiner posted:

"One item not considered with this licensing is if it there is an exclusivity clause in the agreement that prohibits the use of TMCC. "

This would potentially be illegal under anti-trust law , as an anti-competitive practice, should anyone want to litigate it.  MTH could probably incorporate a legally defensible clause requiring Atlas use of PS3 in formerly MTH locos, but could not legally specify that a competitor's product could not be used at all.  Atlas would be very foolish indeed to agree to restricting their use of other products down the road, of course, but we don't know and probably may never know the details of the contract.

I'm not a lawyer, of course .

That makes sense. I would think that Atlas would want the flexibility to use what ever command control system it wants. While it certainly makes sense for Atlas to use the tooling, I am a bit skeptical of the value of using MTH packaging and MTH control system for these locomotives. Given the historical slowness of Atlas getting locomotives to market, are Atlas customers really going to care a couple of years from now that these Atlas locomotives come in "MTH" boxes?  Also, given the success of Lionel's Legacy and TMCC systems, is anyone a couple of years from now really going to want locomotives with command system technology from a defunct company?

My point is that time works against any value of tying these upcoming Atlas locomotives too closely to their old MTH roots.  It seems more logical to equip these locomotives with what ever version of TMCC is current and slap them in Atlas boxes. The people that are going to purchase these locomotives are operators, not collectors.  All they will care about is how it looks and how it runs. The color box will make no difference to them. Don't think 2021, think ahead to 2023 or 2024.

Atlas acquired a license to use DCS if they choose to use it.  What they will do is anyone's guess, but I doubt they are paying for a license and not use the licensed product.  They won't control the production or development of DCS.  The yet unannounced DCS entity will be doing that.  That company will be able to license DCS to any other model train company (such as the possible entity that will manufacturer the still available former MTH diesel, electrics and steam locomotives and rolling stock, maybe a MTH 2.0?)

The video on the Atlas website specifically says the items acquired will be marketed in Atlas O packaging, not MTH packaging.

It will be interesting to see what happens with TMCC.  It's an aging technology (as is DCS and Legacy) that Lionel abandoned for the Legacy system.  The initial modernization for those systems has been to eliminate the hand held remotes and transfer the functions to already available smart phones.  Lionel has even mentioned eliminating the Cab 2 down the line as components become obsolete.  This will not likely be reversible.  Back in the mid 2000's when Atlas O was routinely delivering locomotives, they were having difficulty with sales, from a conversation I had with a well known supplier of Atlas O product.  It wasn't because their engines were not good.  They were and still are marvelously detailed engines.  But buyers were more attracted to the DCS and Legacy Command Control systems.  Buyers liked the better sounds and functionality of those newer systems than the Railsounds 4.0 in TMCC.  That, combined with Kader pulling all manufacturing of trains from all the train companies, including Lionel, and sidling up with Bachman, severely curtailed Atlas O production (and to a lesser extent, their HO & N scales too). Once K-Line went out of business, only Atlas and 3rd Rail were left to license TMCC to.

Other than some of the tooling, the real prize was the use of the MTH factory.  Time will tell if Atlas production and delivery gets better now that they'll have a dedicated manufacturer.

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