DENVER (AP) _ A couple who transformed a family pumpkin carving tradition into a $1 million business sued Kmart Corp. Monday, alleging the retail giant has infringed on its patent by marketing a similar product.

Pumpkin Ltd. produces Carve-O-Lantern kits, offering a set of tools and designs for creating intricate Halloween faces that have gained national attention.

In its suit, the company also accused Kmart of false advertising, deceptive trade practices and unfair competition. The the suit, filed in Denver U.S. District Court, seeks unspecified monetary damages and an injunction to prevent Kmart from infringing on the patent.

''It really concerns me that people might mistake Kmart's kit for ours and our reputation would suffer,'' said Kea Bardeen, Pumpkin Ltd. president.

Mary Lorencz, a spokeswoman for the Troy, Mich.-based Kmart, said company officials could not comment because they had not been served with the lawsuit yet. She said she had not confirmed whether Kmart actually carried the product mentioned in the lawsuit.

''We certainly take all such allegations seriously and we check on them thoroughly,'' she said.

The Carve-O-Lantern method was developed 50 years ago by John Bardeen to enable his children to cut pumpkins safely.

Bardeen's son, John, his wife Kea and their two daughters started Pumpkin Ltd. five years ago, basing the carving kits on the Bardeen family tradition. The business grossed $1 million in sales last year, Mrs. Bardeen said.

The Bardeens' four Carve-O-Lantern kits have been featured on such television shows as ''Monday Night Football,'' ''Roseanne'' and ''Live with Regis and Kathy Lee.''

The kits are sold nationwide for $4 to $5 in stores such as Target, Payless Drug Stores, arts and crafts stores and grocery stores, Mrs. Bardeen said.

In the lawsuit, the Bardeens allege Kmart officials have been interested in the Pumpkin Ltd. kits for several years, but declined to purchase them because the wholesale price was too high.

Earlier this year, Kmart began selling the Deluxe Make-A-Face Pumpkin Carving Kit - which is similar in packaging to the Pumpkin Ltd. kits, but ''substantially inferior,'' the lawsuit alleged.

The Kmart kit and most of the Pumpkin Ltd. kits feature yellow-and-orange designs over a black background on the front of the package, the lawsuit said. It alleged Kmart provided a sample of the Pumpkin Ltd. kit to a manufacturer in China that produces the Make-A-Face kits.