Temu seeks dismissal of Shein’s intellectual property infringement lawsuit

Update:

• E-commerce platform Temu hit back at fashion retailer Shein after the latter filed a lawsuit against the companies behind Temu, accusing them of intellectual property theft and unfair competition. 
• On Oct. 16, Temu filed two motions to dismiss the claims against it in a Washington, D.C. federal court, arguing Shein hasn’t stated a claim and the court lacks jurisdiction.
• Temu’s lawyers claimed Shein only lodged the lawsuit because its business model is failing and Shein is trying to stifle competition.
• “Unable to compete legitimately, Shein has embarked on a crusade to hold its suppliers captive by preventing them from using Temu, whereas [Temu] firmly supports the ability of suppliers to sell on multiple platforms,” Temu states in the motion to dismiss.

Shein, Temu lawsuit overview: 

• Who: Fast fashion retailer Shein has sued budget e-commerce platform Temu.
• Why: Shein says Temu controls its sellers and asks them to infringe on Shein’s intellectual property.
• Where: The lawsuit was filed in a Washington D.C. federal court.

(Sept. 3, 2024)

Fashion retailer Shein has filed a lawsuit against the companies behind budget e-commerce platform Temu, accusing them of intellectual property theft and unfair competition. 

Roadget Business Pte Ltd. filed the lawsuit against PDD Holdings Inc. and others on Aug. 19 in a Washington D.C. federal court, alleging that Temu trains its suppliers to infringe on Shein’s copyrights, trademarks, and trade secrets, giving Temu an unfair advantage in the U.S. market.

“Temu masquerades as a legitimate e-commerce ‘marketplace’ where independent sellers can offer their products for sale,” the lawsuit states. 

“But the facts uncovered to date…demonstrate otherwise. Temu is not a ‘marketplace’ platform. It controls every aspect of its seller’s activity.”

An ‘unlawful enterprise’

The lawsuit alleges Temu is involved in counterfeit operations and trade secret theft, labeling the company an “unlawful enterprise” built on fraud and intellectual property violations. 

Shein alleges that Temu dictates its sellers’ product listings and pricing and even encourages them to violate intellectual property rights. 

Temu allegedly prevents sellers from removing infringing products from its site, even after they acknowledge wrongdoing.

Shein itself is currently being sued for similar violations it alleges against Temu. Small designers and artists allege the company infringes on their digital copyrights. The plaintiff, in that case, alleges the company finds popular work through the internet and misappropriates it by manufacturing and selling it as its own.

16 claims of legal violations

Shein also accuses Temu of more direct wrongdoing, claiming that Temu sets up fake social media accounts impersonating Shein and instructs influencers to falsely promote Temu’s copycat products as being cheaper and of better quality. 

The lawsuit also alleges that one of Temu’s employees allegedly stole data on Shein’s best-selling items and shared it widely to help Temu unfairly compete.

Shein’s complaint includes 16 claims against Temu, ranging from copyright infringement to false advertising and trademark counterfeiting. 

The company seeks damages, injunctive relief, fees and a jury trial.

What do you think of the allegations in this Shein v. Temu case? Let us know in the comments! 

Shein is represented by Quinn Emanuel Urquhart & Sullivan LLP. 

The Shein v. Temu lawsuit is Roadget Business Pte. Ltd. v. PDD Holdings Inc. et al., Case No. 1:24-cv-02402 in the U.S. District Court for the District of Columbia.

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