Intellectual property disputes related to tablet computers are not limited to products designed for adults. Toys “R” Us is facing trade secret misappropriation claims over the Tabeo, a device designed for children. The lawsuit, filed in the U.S. District Court, Southern District of California, also alleges breach of contract, fraud, and unfair competition.
Fuhu Inc., the manufacturer of a rival tablet computer, is seeking an injunction to block the sale of the Tabeo tablet. It claims that Toys “R” Us copied its design after previously agreeing to promote and sell Fuhu’s Nabi children’s tablet. The lawsuit claims that Toys “R” Us copied the Nabi’s buttery-shaped rubber case, among other design features.
Toys “R” Us and Fuhu were once business partners, signing an exclusive distribution agreement in October 2011. However, Fuhu maintains that the toy seller did “virtually no promotion” of its product and ordered a commercially unreasonable number of tablets for the 2011 holiday season. The company claims that it did not realize the reason behind the failed relationship until Toys “R” Us recently announced the Tabeo, according to Reuters.
Toys “R” Us used Fuhu’s trade secrets and confidential information to start selling Tabeo, which systematically attempts to replicate the Nabi experience, far earlier than Toys “R” Us could have done otherwise, if at all,” the lawsuit alleges.
The District Court issued an order on March 4th 2013 granting part of a Toys “R” Us motion to dismiss six of FUHU’s fraud claims. However, the court left ten of the sixteen claims intact, including those for breach of contract and misappropriation of Trade Secrets.
Claims of trade secret misappropriation are not uncommon when partnerships go south. In this case, the stakes are particularly high, as the winner of the IP dispute will certainly have an advantage over their rivals.