Innovation First Files Claim Against CVS Chain, Zuru Responds

Playthings Staff -- Gifts and Dec, 1/17/2013 7:00:00 AM

Hexbug Crab by Innovation FirstGREENVILLE, TX - Hexbugs manufacturer, Innovation First International and Innovation First Labs, Inc., have filed a complaint with the U.S. International Trade Commission, requesting an investigation into the 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. The complaint alleges that CVS has sold and is currently selling Zuru's robotic toy fish products in the U.S. despite knowing that Zuru wrongfully acquired some of Innovation First's design of the product and incorporated it into its robotic toy fish products. Innovation First claims that the Robo Fish product features technology that was stolen by Xiaoping Lu, who worked for Innovation First International China, an Innovation First subsidiary. The complaint alleges that during his employment, Lu had confidential and proprietary information regarding Innovation First's miniaturization design and new technologies that were under development for Innovation First, including technical information, schematics, and designs. His team was also working on developing a next-gen version of the Innovation First's robotic fish toy, HEXBUG, which the company will release later this year in August.

Lu resigned from his position at Innovation First on August 25, 2011 and began working with Zuru shortly after, where he is now responsible for the design of the compant's robotic toy fish products, according to the report. The complaint alleges that Lu shared these trade secrets from Innovation First with Zuru for use in its robotic toy fish products.

Innovation first sued Zuru Toys in October 2011 when the company filed suit against Zuru alleging theft of its trade secrets and aiding and abetting a breach of trust. The company sought and received a temporary restraining order against Zuru, according to the complaint.

Robo Fish by Zuru ToysIn response to the recent claim made by Innovation First International, Zuru Toys sent out a statement denying the allegations that it acquired the Robo Fish toy invention. Zuru and Robo Fish inventor, Xiaoping Lu, reportedly have proof, including written documents that proves the product never belonged to Innovation First International.

Zuru also stated that the Robo Fish toy was in development in excess of 16 years before Innovation First made any claims to the technology. Prior to Zuru acquiring the rights to Robo Fish, Innovation First International's CEO, Tony Norman, provided written notification that the invention belonged to Xiaoping Lu and that Innovation First International had chosen not to license the product, according to a statement released by Zuru. The notification was given after Innovation First had turned down the product upon presentation from the inventor on multiple occasions.

A family-owned business founded in 2005, Zuru says that it acquired the rights to market Robo Fish from inventor Xiaoping Lu. "From conception to invention, the development of Robo Fish was a complex process that I clearly documented over much of my professional career," said Xiaoping Lu, Robo Fish inventor, in a statement released by Zuru. "Innovation First's assertion that the product incorporates technology that was stolen from them has absolutely no merit, and I fully support Zuru's right of ownership to Robo Fish."

First introduced at CVS and Toys "R" Us stores in late 2012, Zuru is set to expand its U.S. presence with additional retailers in February 2013. Robo Fish is currently available in multiple countries since its introduction in early 2012.

In August of 2011, Innovation First International (UK) Limited and Innovation First Inc., filed a patent lawsuit against Clinton Cards plc, asserting claims of intellectual property infringement with regard to the HEXBUG Nano. The products which Innovation First claims were illegal imitations were sold and marketed under the names "Micro-Insect" and "Jitterbugz". Last January, the company also collaborated with U.K. customs officials to seize and destroy unauthorized copies of its Hexbug Nano product at the port of Southampton. Nearly 7,000 of the micro robotic toys had been shipped from Chinese manufacturer Bort Electrical Co. to online U.K. retailer Toysmart Ltd., who intended to sell the goods to European customers.