Canadian Tire is accusing Walmart of stealing part of Christmas — the design of its traditional decorative lights.

The retailer alleges its American rival is undercutting its "unique" made-in-Canada design for clip-on Christmas lights by selling imported knock-off devices that "deceive consumers" with "inferior workmanship" and infringe on intellectual property.

In a lawsuit filed in Federal Court, Canadian Tire asks for an injunction barring Walmart Canada from selling the Holiday Time-brand Christmas lights and seeks at least $500,000 in penalties, plus lost sales.

"The defendants are trying to obtain a marketing 'free ride' to create instant demand for and sales of their products, while avoiding product design and advertising costs," says Canadian Tire's statement of claim.

The claim, which contains unproven allegations that have yet to be tested in court, affirms that Canadian Tire developed its "unique" Noma-brand Christmas lights in 2013, featuring an "innovative and distinctive design" that allows them to be clipped onto trees, eaves, shingles and railings.

"The plaintiff has enjoyed significant success with its Quick-Clip holiday light socket and clip products, particularly during the Christmas and holiday periods in both 2013 and 2014," the lawsuit says.

"The defendants have acted opportunistically and attempted to capitalize on the significant goodwill and reputation in and to the plaintiff's successful Quick-Clip lights."

Canadian Tire sells a 25-pack of its Noma-brand clip-on holiday lights for $25, while Walmart sells a pack of 25 Holiday Time clip-on Christmas lights for $21.

The lawsuit says the Holiday Time lights copy the design and look of Canadian Tire's Noma lights.

The claim even alleges that the packaging on the lights sold at Walmart uses a photo of Canadian Tire's Noma lights, misrepresenting what's actually in the box — which it derides as "made of lightweight plastic and … produced by inferior workmanship."

Canadian Tire registered an industrial design for its Christmas lights in July and applied for a trademark for the phrase "Quick-Clip" in October, weeks before filing its lawsuit against Walmart and two Taiwanese companies.

Both Canadian Tire and Walmart Canada said they would not comment on the lawsuit because it is before the courts. Walmart Canada has yet to file a statement of defence.

The lawsuit was first reported by the Financial Post.