So far, the most prominent lawsuits in the fashion industry revolved around copyright infringements that often involved two powerful brands or fashion houses, but we have also seen litigations between a powerful maison and a digital artist. Yet things are rapidly changing as fast-fashion giants are joining the game.
Swedish retailer H&M filed indeed a lawsuit in Hong Kong, targeting Shein's parent company, Zoetop Business Co., and Shein Group Ltd. The legal dispute between H&M and Shein actually began in July 2021. The case started in a Hong Kong court in September of the same year and has progressed since then.
H&M argues that the strong resemblance between its products and Shein's offerings provides evidence that Shein copied H&M's designs.
The Hong Kong Copyright Ordinance grants copyright owners exclusive rights to various acts, including copying their works onto tangible media, distributing copies, renting computer programs and sound recordings, and making works available to the public via the Internet. They can also perform or display their works publicly, broadcast them, and make adaptations, such as translating, converting, conveying stories through pictures, arranging music, or converting computer programs. The standard of similarity for copyright infringement is based on the replication of a substantial part of the copyrighted work and the test for substantiality is qualitative and not quantitative.
In the court filing, H&M sought an injunction to prevent Shein from further infringing on their copyrighted and trademarked designs (including knitwear and swimwear). The lawsuit also highlighted the vast number of unauthorized reproductions of substantial parts of its copyrighted works by Shein, which reportedly releases up to 6,000 new styles daily. H&M is seeking unspecified damages and injunctive relief to prevent Shein from continuing to infringe on its copyrights.Founded in China in 2008, Shein has rapidly risen in the global fast-fashion market, attracting customers with its ultra-low prices and social media-based marketing, particularly targeting Generation Z on platforms like TikTok. However, the company has been selling a variety of designs that seem lifted from more popular brands, from lookalike Marine Serre tops to bags copied from Gucci, Dior, and Bottega Veneta, and often faced copyright infringement accusations and lawsuits (among the others also by Dr Martens-owner Airwair in 2020 and Ralph Lauren in 2021).
Shein is also facing another lawsuit on copyright infringement grounds by three independent artists - Krista Perry, Larissa Martinez, and Jay Baron - who sued Shein earlier on in July and filed a complaint in a California federal court (Download Krista Perry_Larissa Martinez_Jay Baron_Shein).
The artists accused Shein and related entities (Roadget Business and Zoetop Business) of large-scale and systematic intellectual property theft. They also claim that Shein not only copied but also produced, distributed, and sold exact replicas of their creative work, alleging that such infringement constitutes racketeering under the Racketeer Influenced and Corrupt Organizations Act (RICO Act).
The complaint shows Perry's creation of the "Make It Fun" artwork and "Floral Bloom" design; Baron's "Trying My Best" artwork and Martinez's "Orange Daisies" design compared to Shein's products.
But there is somebody else currently embroiled in a legal battle with Shein - ultra-fast fashion giant Temu. Both Shein and Temu target price-conscious customers, particularly Gen-Zers, seeking constant new designs for their wardrobes and ultra-low prices.
Temu, represented by U.S. law firm Boies Schiller Flexner, filed the case in a Boston federal court (Whaleco Inc v Shein US Services LLC et al, U.S. District Court for the District of Massachusetts, Download Whaleco_SheinUS), against Shein, accusing it of attempting to eliminate its competition in the US market.
According to Temu, Shein, that entered the U.S. market in 2017, "obtained a monopoly position" and established exclusive contracts with 8,338 independent apparel manufacturers in China, preventing them from working with Temu.
In the complaint (Download Whaleco_SheinUS), Temu states that "Shein forces manufacturers to sign loyalty oaths certifying that they will not do business with Temu" and that it "issues public penalty notices and imposes extrajudicial fines on disobedient manufacturers for supplying product to Temu". As a result, US consumers have limited access to direct price competition, leading to a significant decline in Temu's fashion sales.
Temu states that these agreements are part of Shein's anti-competitive scheme and strategy to dominate the US markets and hinder Temu's business growth (the complaint highlights that "By October 2022, Shein had begun engaging in all the anticompetitive conduct that forms the Scheme. Since that time, more than 10,000 product listings have been pulled from Temu because of Shein's Scheme.")
According to Temu, "Shein's Scheme harms consumers and competition by raising prices to consumers, restricting choice and innovation, and impairing the expansion of the ultra-fast fashion market in the United States".
Temu, an offshoot of the Chinese e-commerce giant Pinduoduo, entered the US market in September 2022 and quickly gained popularity, particularly among young consumers, by offering low prices (in some cases lower than Shein...) and incentives for encouraging app downloads.
Shein also took legal action against Temu, with an initial complaint in December 2022 (Roadget Business PTE. Ltd. v. Whaleco, Inc.) when it alleged that Temu paid influencers to spread false and deceptive statements about Shein on social media.
In March this year, Roadget Business Pte. Ltd., the owner of Shein's trademarks in the U.S., filed an amended complaint with the U.S. District Court for the Northern District of Illinois against Temu. In this case Roadget accused Temu of willfully and flagrantly infringing on Shein's exclusive and valuable trademark and copyright rights. According to Roadget, Temu engaged in a scheme to boost its growth in the American market by impersonating the Shein brand on social media, trading off the well-known Shein trademarks, and using copyrighted images owned by Roadget in its product listings.
In a nutshell, rather than competing fairly, Temu allegedly engaged in unfair competition by impersonating Shein and used "imposter" Twitter accounts containing Shein trademarks in the handles and misleading links that directed consumers to Temu's website instead of the Shein app. This deceptive tactic aimed to divert customers from purchasing Shein-branded goods to Temu's offerings.
Furthermore, Roadget accused Temu of using copyrighted images owned by Shei on its website, thus infringing on Shein's copyrights. Temu allegedly disseminated false and deceptive statements about Shein products to influencers, inducing them to promote Temu's goods and services in exchange for monetary payments.
In response to Roadget's allegations, Temu filed a partial motion to dismiss, contesting Roadget's copyright claims and false advertising and trade libel claims. Temu denied creating the fake Twitter accounts and stated that they were likely created by third parties trying to exploit Temu's referral programs.
Such complaints aren't rare in the US: Fashion Nova faced accusations of engaging in a conspiracy to hinder the growth of its fast fashion competitors, such as Honey Bum, in a lawsuit filed in 2020. The lawsuit accused Fashion Nova and its founder of violating Sections 1 and 2 of the Sherman Antitrust Act and engaging in interference with business and contract (Fashion Nova successfully had the monopolization claim under Section 2 of the Sherman Act dismissed in March 2021, as Honey Bum failed to establish that Fashion Nova held "market power within a relevant market." Subsequently, in January 2022, the U.S. District Court for the Central District of California granted Fashion Nova's motion for summary judgment and dismissed the rest of the case in Fashion Nova's favor).
Despite we as consumers have become more knowledgeable about the damages of the fast and ultra-fast fashion industries to our planet, these retailers and companies keep on expanding, luring us with new products offered at affordable prices. Criticism of fast and ultra-fast fashion retailers continues, though: Shein recently invited American influencers to visit their HQs in China, and while their feedback was overtly positive, people on social media attacked the influencers highlighting not only the multiple copyright violations Shein has been accused of, but also the fact that Shein has been consistently accused of mistreating marginalized groups in China, particularly the Uyghurs, and there are allegations of forced or underpaid labor in some of its supplier factories, with some located in the Xinjiang Uyghur Autonomous Region (not to mention the presence of hazardous chemicals in Shein's clothing).
Shein has consistently refuted any wrongdoing, but also Temu's sister company Pinduoduo, faced similar accusations in China and has been under scrutiny for different issues including worker conditions and the sale of counterfeit products on Pinduoduo's platform.
Seeing fast and ultra-fast fashion companies suing each other is a terrific ironic twist in the infinite universe of lawsuits involving fashion houses and brands. What was once a scenario of designers and fashion houses suing fast-fashion retailers has now transformed into fast-fashion retailers suing each other. It is indeed almost comical to see H&M, known for its expertise in copyright infringement and trend replication from high-end runways, taking legal action against another fast-fashion retailer.
The frustration of H&M and other fast fashion retailers such as Zara or Forever 21 stems from Shein's ability to offer even cheaper prices, engage more influencers, and garner strong support from its customer base.
Since its introduction to the US in 2017, Shein has risen as the most popular ultra-fast fashion brand in the country, captivating customers with extremely affordable prices and trendy designs. In May 2021, the Shein mobile app became the most downloaded shopping app in the U.S., and, in May 2022, it outperformed both TikTok and Instagram, becoming the most downloaded mobile app in any category. This situation has left brands such as H&M feeling threatened.
However, while these lawsuits about copyright infringement and unfair business competition are somewhat hilarious, it is our planet that suffers from the practices of these companies, urging us all to reconsider and change our collective habits.
Upon reading excerpts from Temu's complaint, you can't help but become aware of how these companies view us all: "Temu and Shein are at the vanguard of ultra-fast fashion, where technology and highly efficient supply chains meet to satisfy consumer demand for cutting-edge fashions at ultra-low prices. The speed of communications and rapidly changing consumer preferences and fashion have created strong consumer demand for the ultra-fast fashion business model. Critically, that model relies on relationships with tens of thousands of clothing manufacturers capable of meeting the rigors of the ultra-fast fashion business model."
The complaint's heavy focus on words like "ultra-fast," "ultra-low," and "speed" should serve as a wake-up call, revealing that these retailers view everyone in their supply chain, from manufacturers to consumers, as mere machines, involved in the production and consumption of their products and we all know that nothing will change if we as consumer do not act now to make them change (Shein reportedly aims for substantial revenue growth, setting its sights on $60 billion in revenues by 2025; moreover, rumors have circulated about the company contemplating an IPO in the United States...).
While we try and reassess our consumption habits and patterns, if you harbor a passion for fashion, you like researching and dream of a career that allows you to immerse yourself in the industry and profit from it, forget fashion journalism and consider exploring fashion law studies, an increasingly lucrative option (with some sagas becoming worthy of their own TV shows). In the United States, specialised attorneys and fashion law experts can command high rates (starting from $500 per hour) and these new cases show us that, in future, these jobs will multiply at different levels, as there will be more lawsuits involving powerful fashion houses and brands, but also more fast-fashion entities. Yes, litigation in this field has transformed into an enthralling spectacle, akin to a runway show, making it an alluring career path for those who adore the law, legal battles, and, of course, financial rewards.
Comments