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Shein has copyright infringement ‘baked into’ its business model: class action lawsuit

The complaint comes as the fast fashion company is involved in several similar lawsuits claiming copyright infringement.

Shein has copyright infringement ‘baked into’ its business model: class action lawsuit

Offices at fast fashion company Shein. Shein is facing a class action lawsuit that accuses it of copyright infringement. Courtesy of Shein

Dive Brief:

  • Shein is facing a class action lawsuit that alleges the fast fashion company uses an “industrial-scale scheme of systematic, digital copyright infringement” against small designers and artists, according to court documents last week.
  • Attorneys for the group of plaintiffs say that Shein “uses sophisticated electronic systems that algorithmically scour the internet for popular works created by artists” and “misappropriates those works to manufacture and sell” them as Shein products without attribution to the creators.
  • The complaint is the latest in a series of copyright infringement lawsuits filed against the fast fashion giant, including an ongoing one from last year that claimed violation of the Racketeer Influenced and Corrupt Organization Act.

Dive Insight:

The latest case, filed Friday in the U.S. District Court for the Southern District of New York, points to Shein’s ultra fast business model that involves rapid mass production and generating thousands of new products each day. 

Attorneys allege that to distribute these items “at such a fever pitch,” Shein’s algorithm-based design system outputs designs to Shein’s factories for production “with no human intermediary or compliance function taking care that the algorithm’s designs are not the property of others.”

“But Shein does not create many of its products; it certainly does not design thousands daily,” the complaint reads. “…Shein uses algorithms, artificial intelligence, and related computerized monitoring systems to identify trending and ‘viral’ images and designs on social media, apps, and websites.”

The complaint further claimed that the fast fashion company combines its data-mining system with research and surveillance of its competitors, and attorneys say that “widespread copyright infringement is baked into the [Shein] business.”

A Shein spokesperson didn’t immediately respond to Fashion Dive’s request for comment. In Fashion Dive’s previous reporting, the company has said it takes all claims of infringement seriously.

Though the bulk of the copyright infringement complaints against Shein have, like this one, been filed by independent designers, larger fashion brands and retailers have sued Shein as well, including Victoria’s Secret-backed For Love and Lemons, Uniqlo and H&M.

Beyond the courts, Shein’s business model has also been questioned by Congress. Last year, a group of lawmakers wrote a letter to the top executive of Shein, asking the company to detail its compliance with the Uyghur Forced Labor Prevention Act, a 2021 law that bans products from Xinjiang region in China. Another group of congress members similarly asked the SEC to halt a potential Shein IPO until it confirmed it didn’t use forced labor in its supply chain.

Temu, one of Shein’s competitors, was also part of the congressional investigation. Temu sued Shein in December 2023, accusing it of anticompetitive behavior.

Temu is facing two ongoing class action lawsuits which accuse it of intentionally loading dangerous malware and spyware onto users’ devices and failing to comply with security standards, among other claims.