"There's been no allegation that any of our customers’ data has been compromised. However, given the intimate nature of our products, the privacy and security of our customers' data is of utmost importance to our company," the company said in a statement. "We take concerns about customer privacy and our data practices seriously."

The company noted, however, that it had taken steps to "further enhance" its data security and privacy measures in the last few weeks.

"As part of this effort, we have engaged external security and privacy experts to conduct a thorough review of our data practices with a view to further strengthening data protection and privacy for our customers," it said. "We are also committed to better communicating our data practices."

The We-Connect app is being updated later this month and will include in-app communication about the company's privacy and data practices, as well as a new feature for customers to control how their data may be used, the company said.

The lawsuit filed against Standard Innovation asks the court for an injunction prohibiting the company from monitoring, collecting and transmitting consumer usage information, damages arising from the invasion of personal privacy, and damages arising from the purchase of the We-Vibe.

It also seeks certification as a class-action lawsuit and estimates tens of thousands of individuals could be part of the legal action.

"This is, by far, one of the more egregious privacy violations we have seen in the course of our practice," the woman's lawyer, Eve-Lynn Rapp said. "We look forward to litigating this case on behalf of those who have been affected."

At least one observer said the case highlights the issues with using all sorts of "smart" devices that link to apps on mobile devices.

"That's a lot of data, some of it more sensitive than others...that is being communicated over networks and to different companies or app makers," said Teresa Scassa, a professor at the University of Ottawa who specializes in information law.

"People have to be aware that this data collection and transmission is happening and it will be governed or not governed by specific terms of use that are specific to each particular app or device."

Scassa noted that sharing of personal information is simply part of the reality of interacting through mobile devices and apps.

"You have to think about how that's happening, why that's happening, with whom it's being shared and how good is the security protection."

By Diana Mehta, The Canadian Press