On December 14th, Temu filed a lawsuit against Shein in the United States, claiming it had no other choice and alleging that Shein’s anti-competitive practices were escalating.
In response, a source close to Shein stated that Temu not only consistently copied Shein’s proprietary products on a large scale and engaged in unfair competition but also engaged in baseless lawsuits and attempted retaliation and defamation through malicious litigation. Shein refuses to compromise and will actively defend its legal rights through legal means.
Temu Resumes Lawsuit Against Shein in the U.S.
On Wednesday, local time in the U.S., Temu filed another lawsuit against Shein in the District of Columbia federal court, accusing the fast-fashion platform of intensifying its anti-competitive actions against Temu. This comes after the two parties reached a “settlement” in November earlier this year, withdrawing their lawsuits in the United States.
The dispute dates back to when Temu entered the U.S. market last year. At that time, Temu preemptively listed many products identical to Shein’s, offering them at prices discounted by over 20%.
In late December last year, Shein initiated accusations against Temu on social media and online promotions, deliberately tarnishing Shein’s reputation and accusing Temu of copyright infringement of Shein’s brand and products.
In July this year, Temu filed a new lawsuit against SHEIN in the federal court in Boston, accusing it of violating U.S. antitrust laws. In the complaint, Temu primarily pointed out Shein’s use of market dominance to prevent these manufacturers from cooperating with Temu. SHEIN stated at the time that “Temu’s lawsuit has no legal basis.”
On August 1st, the U.S. federal court issued an emergency temporary restraining order against Temu, forcing it to stop “continuing infringement” related to Shein’s copyrights.
According to court documents, Temu’s infringing activities over the past few months include: 1) extensively copying Shein’s copyright-protected clothing designs and patterns; 2) repeatedly ignoring Shein’s infringement notices (DMCA notices); 3) delaying the removal of infringing products or re-listing them with minor modifications to maximize illegal sales; 4) using counterfeit Shein logos misleadingly in Temu’s webpage titles, unfairly leveraging Shein’s reputation, and more.
In September, a UK court also issued an emergency temporary restraining order against Temu, instructing it to stop infringing on Shein.
Temu Repeatedly Accused of Infringement
Jiang Han, a senior researcher at Pangu Think Tank, analyzed that from the complaints of both parties, it can be seen that the clothing sector is one of the focal points of their competition. However, Temu and Shein differ in their models. Temu, like domestic platform Pinduoduo, is a full-category platform, where merchants have a supply and sales relationship with the platform. In the clothing sector, Shein started with its own clothing brand and Shein’s brand is currently one of the favorite fashion brands for overseas users.
The different models determine the different cooperation between the two sides and clothing factories. Shein mainly cooperates with clothing factories for its own brand Shein, similar to the relationship between Zara and suppliers. Factories supply goods according to Shein’s standards and requirements. Without Shein’s consent and authorization, suppliers cannot independently provide Shein’s branded products and images to third parties. On the other hand, clothing merchants and Temu have a relationship where merchants supply goods to the platform.
According to Shein’s complaint, since Temu went online in September last year, it has systematically and extensively copied Shein’s own brand designs and images, seriously infringing on Shein’s trademark and copyright. Temu also engaged in unfair competition by registering fake Shein social media accounts, selling counterfeit Shein-branded products, spreading untrue information to discredit Shein, and more. After unsuccessful complaints and negotiations, Shein was forced to defend its rights through legal means.
Coincidentally, an increasing number of top-selling Amazon sellers are also collectively suing Temu for continuous infringement. For example, FitBeast, a Chinese brand that sells sports equipment on Amazon, found a product on Temu priced at less than $5, compared to its $25.99 price on Amazon. FitBeast filed a lawsuit against Temu and its suppliers, accusing them of infringing on the brand’s copyright and causing damage to its sales. They believe Temu and its suppliers replicated and sold these products, stealing their labor results.
In April this year, another Amazon seller from Shenzhen, known as Xiao Zhang, sued TEMU, believing that the platform was involved in copyright infringement. Xiao Zhang did not sell products on the Temu platform but discovered pirated versions of his company’s products on it. These products were originally priced at nearly $30 on the Amazon platform but were now being sold for about $5.
Court documents indicate that these U.S. lawsuits are among the first legal disputes between Amazon sellers and TEMU.
According to reports from Wired, some Amazon sellers found that the monthly sales of their popular products dropped by more than 20%. They believe this is likely related to Temu listing similar products at lower prices. Amazon strongly condemned this and encouraged sellers to contact the platform’s legal department. Dozens of Amazon sellers have publicly expressed their intention to defend their rights against Temu. Dozens of Amazon sellers claim to have found images and descriptions of their products on Temu identical to their own.
Focus on Intellectual Property Protection in Overseas Expansion
Ma Rui, a Sino-U.S. technology analyst, previously stated in an interview with the media, “I believe that as Temu’s popularity grows, it will face more and more lawsuits, including intellectual property, but it may not be limited to intellectual property.”
Recently, the General Office of the State Council issued “Several Measures on Accelerating the Development of Integrated Domestic and Foreign Trade,” emphasizing the strengthening of intellectual property protection, with a focus on clothing, shoes, hats, and launching special actions to combat infringement and counterfeiting, promptly correcting and stopping online infringement. At the same time, it accelerates the construction of domestic and foreign trade brands, encourages domestic and foreign trade enterprises to cultivate independent brands, cultivate demonstration enterprises with intellectual property advantages, support enterprises in leveraging various types of intellectual property such as patents and trademarks to enhance comprehensive brand competitiveness.
Jiang Han believes that in the overseas market, competition is normal, but malicious competition should be avoided. All companies must operate in compliance with the law, which is the bottom line that enterprises must follow for their development.
On the one hand, with the increasingly strict trend of overseas supervision, “compliance and legal
operation” have become a prerequisite for Chinese companies going global. Protection of brand intellectual property is crucial, especially in the international market where attention to the protection of one’s brand is significant. Businesses should avoid taking shortcuts that violate rules.
On the other hand, with the end of the era of brutal growth and the intensification of competition in the international market, Chinese companies must avoid indiscriminate homogenization. Each company should continuously enhance its core and overall competitiveness, collectively promoting the brand image of Chinese manufacturing and Chinese brands. In orderly competition, a healthy industry ecosystem should be built, promoting the long-term development of cross-border e-commerce. Companies should refrain from engaging in international markets with the inertia of past malicious competition, thereby damaging the industry and the image of Chinese manufacturing.
Yesterday, Ministry of Commerce spokesperson Shu Juetin stated that China’s cross-border e-commerce has continued to maintain rapid growth this year. In the next step, the Ministry of Commerce will strengthen capacity building, fully play the role of industry organizations, focus on platform compliance, intellectual property protection, and other issues of concern to enterprises, conduct training to help cross-border e-commerce enterprises explore overseas markets.
The overseas market is complex, and while cross-border e-commerce companies pursue their own development, they must also attach importance to the legal operation of enterprises to ensure long-term success.