It seems like every technology company on the planet is releasing a tablet these days, and we use the phrase "technology company" loosely. Even Toys"R"Us decided it had to make a tablet of its own, recently making the Tabeo 7 inch Kids Tablet available for preorder at the sub-Kindle Fire price of $149.99. But Toys"R"Us is now facing the same problem as just about every other tablet maker—it's being accused of ripping off another company's intellectual property.
A lawsuit (PDF) was filed yesterday in US District Court in San Diego by Fuhu, maker of another kids tablet previously sold through the Toys"R"Us stores and website. In its complaint, Fuhu, whose investors include Acer and Foxconn, describes its Nabi device as "the world's first full-featured Android tablet made especially for kids." It sold out upon hitting Toys"R"Us stores and website, with preorders coming in at the rate of 1,000 every three hours.
But instead of capitalizing on that early success, Toys"R"Us did virtually nothing to promote the product and did not order enough stock to meet demand, Fuhu says. This was allegedly a violation of the companies' contract, which required Toys"R"Us to promote the Nabi. Fuhu thus terminated the companies' exclusivity agreement in January 2012, only three months after it was signed.
It was then, the lawsuit alleges, that Toys"R"Us built the Tabeo by "shamelessly using Fuhu's confidential information obtained after fraudulently becoming Fuhu's exclusive distributor in an agreement signed in October, 2011." Toys"R"Us "has used and continues to use Fuhu's confidential information, trade secrets, and other intellectual property to prepare, market, and sell Tabeo," Fuhu alleges.
Fuhu claims trademarks and trade dress covering its tablet's "iconic butterfly shape," including a "removable bumper that fits snugly around the outer edge of the tablet... [featuring] exaggerated, flared corners, giving the Nabi tablet an original, unique, soft, and friendly look, reminiscent of the four wings of a butterfly."
Toys"R"Us used practically the same shape and bumper design in its own tablet, Fuhu says in its lawsuit. Here's a comparison of the tablets, using images from the two companies' websites:
Additionally, searching the Toys"R"Us site for "Nabi" now brings up the Toys"R"Us Tabeo as the first result, with Nabi not appearing at all. The lawsuit charges the retailer with breach of contract, fraud, misappropriation of trade secrets, false advertising, unauthorized use of the "iconic butterfly shape" in violation of Fuhu trademarks, and trade dress infringement.
Fuhu claims the rights and title to any Tabeo made by Toys"R"Us, as it is simply an "improvement" upon Fuhu's own invention, the lawsuit states. Fuhu wants possession of all the Tabeos, and asks the court for damages and an injunction preventing Toys"R"Us from selling them. We asked Toys"R"Us for a response to the lawsuit, and the company said it cannot comment because it is still reviewing the lawsuit.
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