Fast-fashion giant Shein has filed a lawsuit against its rival, Temu, alleging copyright infringement, trademark infringement, and fraud. The suit, filed in Washington, D.C. federal court, comes as Shein itself faces similar allegations from a wide variety of brands and independent artists.
In its complaint, Shein accused Temu of stealing its designs and building an empire using counterfeiting, intellectual property infringement, and fraud. The company alleges that Temu is "masquerading" as a legitimate online marketplace by encouraging its sellers to steal other brands' designs and then preventing them from removing products from the platform, even after they have admitted to infringement.
Shein further alleges that Temu is losing money on each sale it makes and is using trademark infringement to make up for the losses. The company claims that Temu's business model relies on encouraging its sellers to sell counterfeit or substandard goods, which are priced so low that Temu must subsidise each sale.
The duelling e-tailers have taken the retail industry by storm with their ultra low-priced products and their ability to respond to trends far faster than their legacy competitors. However, the two have also racked up a mountain of criticism related to their labour practices, their connections to the Chinese government, and their alleged use of other brands' designs.
In addition to the copyright infringement allegations, Shein also accuses Temu of stealing trade secrets and using false advertising to deceive consumers. The company claims that a Temu employee stole confidential information about Shein's best-selling products and internal pricing information, which Temu then used to direct its sellers to copy those products and sell knock-off versions on its platform.
Shein's complaint includes more than a dozen examples of clothes and designs that Temu allegedly ripped off. The company has asked the court to rule in its favour and enter an order that would prohibit Temu from using Shein's confidential information, among other requests.
