Run. Do not walk to your patent attorney. You and your attorney can discuss what the proper course of action would be in your particular case.
In the meantime, here are some things to consider. Patent protection is available to inventions meet the requirements of new, useful and non-obvious. Patent inventors can assign or license their rights in issued patents (and even pending applications) to third parties. Being the first to file a patent application, though not exactly necessary, is still a good strategy, in the US.
Until you have discussed this with your patent attorney, be careful about any public or non-confidential disclosures in advance of patent application filing as those disclosures can have an adverse impact on your patent rights in some situations.
Make a note to discuss the issues surrounding the prior idea that you feel was taken without permission with your attorney also. In many instances, there is little or nothing that can be accomplished to remedy that situation. Your attorney can determine whether there was an actionable breach of confidentiality or theft of trade secrets.
Good luck! It sounds like it could be a very useful invention.
Answered on Dec 21st, 2010 at 11:58 AM