Business, Economics and Jobs

Toys R Us sued over kid's tablet computer


Geoffrey from Toys R Us greets participants of the 10th Annual Walk Now For Autism Speaks at the Rose Bowl on April 21, 2011 in Pasadena, California.


Andrew D. Bernstein

The Toys R Us tablet computer for kids comes complete with its own kiddie lawsuits and kiddie accusations of corporate misconduct. A start-up company called Fuhu is accusing Toys R Us, the world's largest toy retailer, of stealing its trade secrets, Reuters reported

Before Christmas season last year, Fuhu had developed a tablet for kids called the Nabi. In the lawsuit, Fuhu claims that it was offered a deal by Toys R Us: the retail giant wanted exclusive rights to sell Fuhu's Nabi tablet. If Fuhu promised to only let Toys R Us and no other store sell the Nabi, then Toys R Us would spend millions of dollars marketing the Nabi, ZDNET reported. So Fuhu signed the contract, but says Toys R Us didn't honor the agreement. Fuhu's complaint alleges that despite high demand, Toys R Us only ordered a limited amount of the tablets.

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As a result, Toys R Us only sold about 20,000 Nabi tablets, the lawsuit claims. "They thought we could do six figures. The question is why they didn't order more," Fuhu CEO Jim Mitchell told ZDNet. 

Fuhu's lawsuit also alleges that Toys R Us did "virtually no promotion," BBC News reported. In January 2012, after the disappointing Christmas sales, Fuhu and Toys R Us ended their exclusive agreement. But eight months later, Toys R Us announced that it would sell its own Android-powered tablet for kids called the Tabeo. It will go on sale next month.

Fuhu claims that the Tabeo copies the Nabi's butterfly-shaped bumper, software eco-system and other features, the BBC said.  "The complaint alleges that TRU's intent all along was to use our business blueprint for our nabi(TM) ecosystem and to copy our tablet, software, design, user experience, accessories, parental controls and online services in order to sell a TRU-branded product for the upcoming 2012 holiday season," Robb Fujioka, Fuhu president and co-founder, said in a press release

Toys R Us would not comment about the lawsuit to media. As part of the lawsuit, Fuhu is seeking an injunction to stop sales of the Tabeo, AdAge reported