Shein Slams Temu with Copyright Lawsuit, Accuses Rival of Ruthless Design Theft and Fraud

Shein has escalated its fierce rivalry with Temu by filing a lawsuit accusing the competitor of brazen copyright theft, fraud, and counterfeiting. The legal battle underscores the cutthroat competition in the fast fashion industry.

Shein Files Copyright Lawsuit Against Temu

Fast fashion behemoth Shein, which is associated with China, is suing competitor Temu, claiming that Temu used fraud, intellectual property infringement, and counterfeiting to amass an empire at the expense of Shein's designs.

CNBC reports that Shein is now defending itself against identical claims made by a broad range of corporations and independent artists, including Levi Strauss and H&M, when the lawsuit was filed on Monday in a federal court in Washington, D.C.

Temu Allegedly Promotes Design Theft and Counterfeiting

Temu, owned by PDD Holdings, is "masquerading" as a real online marketplace, according to Shein's complaint. This is because Temu promotes design theft from other firms and then refuses to let vendors remove infringing products from the platform, even after they recognize their mistake.

“Temu draws U.S. consumers into downloading and using its mobile application with promises of extremely low pricing. But Temu is not profiting from the sale of these products, which are priced so low that Temu must subsidize each sale, losing money on every transaction,” according to the lawsuit.

“Only by encouraging its sellers to infringe the intellectual property rights of others and sell counterfeit or sub-standard goods can Temu hope to minimize the massive losses it is subsidizing,” the lawsuit further stated.

The retail business is in a frenzy as a result of the two e-tailers' lightning-fast reaction times to trends and incredibly cheap merchandise. They have been the targets of much criticism for their labor methods, ties to the Chinese government, and purported copyright infringement.

In their legal battle for market dominance, the two have leveled a litany of scandalous accusations against one another. Temu sued Shein last year over copyright issues and accusations of "mafia-style intimidation of suppliers" to coerce providers into exclusivity agreements.

Shein Claims Temu Engages in Rampant Copyright Infringement

Shein claimed that Temu engaged in "brazen" illegal activity in their lawsuit. It claimed that an employee of Temu had stolen "valuable trade secrets" that revealed which Shein items were the most popular, as well as internal price data so that Temu could compete with Shein.

"Temu then directed its sellers to copy those and other best-selling Shein products and sell knock-off versions on Temu’s website and mobile application," the complaint added, regarding the collection of stolen information.

Legal Experts Weigh In on Shein’s Accusations Against Temu

The lawsuit claimed that Temu is not your average infringer. "In order to advertise the counterfeit versions of Shein products, Temu has reproduced virtually identical copyrighted images of Shein products and used them, or instructed sellers to use them, as promotional images on the Temu website and mobile application."

According to the company, Temu has used social media site X to impersonate Shein in an attempt to "misdirect customers away from the Shein platform to the Temu platform."

Temu’s Google Ads Allegedly Mislead Consumers

An image of a Google ad sponsored by Temu, with Shein in the headline and Temu as the website address, is attached to the complaint.

"To further deceive consumers, Temu has instructed its paid social media influencers to falsely claim that Temu products which are often counterfeits of Shein products are cheaper and of higher quality than genuine Shein goods," the lawsuit stated. "Temu has gone to great lengths to imitate Shein, including by poaching resources, employees, and suppliers from Shein."

There are over a dozen garments and patterns that Temu is said to have plagiarized in Shein's 80-page lawsuit.

Among other things, it has requested that the court find in its favor and stop Temu from exploiting Shein's confidential information.