Shein Faces US Lawsuits: Accused of Copyright Infringement, Racketeering by Independent Designers

Independent designers have lodged a lawsuit against popular Chinese online fashion retailer, Shein, alleging copyright infringement and racketeering. Accusations center around a supposed "secret algorithm" used to duplicate trending designs for profit, raising questions about the retailer's organizational ethics.

Retail Gazette reported that several independent designers accuse Shein of infringement-related racketeering activities. In addition, they said that the company has been using a "confusing corporate structure" that allowed it to avoid theft charges and liabilities.

The plaintiffs noted that Shein's first response to defend itself when served with a copyright or trademark cease and desist letter or lawsuit was to remove the problematic product from its e-commerce sites. It also blamed the misconduct of another Shein entity.

The designers filed the Racketeer Influenced and Corrupt Organisations Act (RICO) lawsuit against Shein on July 11. The case was brought to the California Federal Court with claims that the Chinese fashion retailer has also been using a "secret algorithm" to pick out fashion trends, copy them and sell them under its brand.

In the lawsuit filing, Krista Perry, Jay Baron, and Larissa Martinez accused the fashion retailer and its parent company, Nanjing Lingtian Information Technology, of producing, distributing, and selling exact copies of their designs. They also alleged that this copying has always been part of Shein's "designing" process and organizational DNA.

"When Shein copies a small or independent designer, the most likely outcome without brand protection specialists and specialized software on the lookout is that the infringement will go unnoticed," part of their complaint reads.

Meanwhile, in response to the lawsuit and allegations, Shein denied the claims. The company spokesperson previously said via CNN Business, "SHEIN takes all infringement claims seriously, and we take swift action when complaints are raised by valid IP rights holders. We will vigorously defend ourselves against this lawsuit and any claims that are without merit."

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