Innovation First International has filed a complaint with the US International Trade Commission, requesting an investigation be started against pharmacy chain CVS Caremark for unfair trade practices.
The claim against CVS is related to the Robo Fish toy, manufactured by Zuru Toys and sold in CVS stores.
Innovation First contends that the Robo Fish toy includes technology developed by the company and its employees that was misappropriated by persons affiliated with Zuru Toys.
Innovation First asserts that the Robo Fish product incorporates technology that was stolen by an IFI engineer and shopped for several months to other toy companies. The engineer ultimately placed Robo Fish with Zuru Toys and resigned as head of R&D for Innovation First's China development team the day of the sale.
Innovation First sued Zuru Toys more than a year ago and remains engaged in litigation with the firm.
Major US retailers other than CVS have elected not to carry the offending products. Innovation First plans to release its official version of the Aqua Fish product under the Hexbug brand in August.
"This should come as no surprise to CVS," stated Tony Norman, president and CEO of Innovation First International. "We warned all major retailers lasr year of the consequences they would face if there were to import the Robo Fish product.
"Against our advice, this retailer knowingly chose to carry the product line, and will now have to face the legal consequences associated with its actions.
"Retailers know the toy industry, but some pretend not to recognise obvious knock-offs or other unfair trade practices. Those retailers bury their heads in the sand and rely on the hollow promise of indemnification from unscrupulous suppliers - a practice that stifles true innovation."
Norman continued: "Unlike a typical toy company, we are broadly diversified and not dependent solely upon toy revenue. Therefore, we won't hesitate to file suit against retailers, or seek justice through other avenues like the ITC if anyone in the supply chain steals our technology, confidential information or trade secrets."
Want to receive up to the minute toy industry news straight to your inbox? Click here to sign up for the free ToyNews Daily Digest and Newsflash services. You can also follow ToyNews on Twitter and Facebook.