Shein deemed a 'greater societal threat than TikTok' in copyright complaint

13 July 2023 , 20:36

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Shein is accused of stealing intellectual property from three independent American designers (Image: Bloomberg via Getty Images)

Retail fashion giant Shein is under attack - three American designers filed a complaint against the company, alleging that the "fast fashion behemoth" is guilty of "irredeemable" and "systematic intellectual property theft."

Krista Perry, Larissa Martinez (Larissa Blintz) and Jay Baron are well-known, highly regarded designers, business owners and freelancers. They've accused Shein of having "produced, distributed, and sold exact copies of their creative work."

The complaint was filed on July 11 in the United States District Court's Central District of California, Western Division, and the wording in the official court document is scathing.

"Like TikTok, Shein's business model depends on collecting a shocking amount of data from its customers - which it then reverse-engineers into fashion trends," the introduction reads. "Shein is actually a greater societal threat than TikTok - because it contributes mightily to serious problems beyond data security and privacy, such as environmental damage, sweatshop (or worse) labor conditions, tax avoidance, child safety, as well as the subject of this lawsuit, large-scale and systematic intellectual property theft from US designers large and small."

The Shein app uses an algorithm that collects personal data to come up with ideas and create new designs (NurPhoto via Getty Images)

The plaintiffs fear that the company's manner of doing business will spread and "lead other industries on a race to the bottom."

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Shein has effectively attained "outlaw status," the complaint says, accusing the corporation of slave and child labour.

But it has been able to weather a storm of "bad press" and because of its "decentralised" and "bysantine shell game of a corporate structure" that shifts blame to third parties who partner with the giant. They essentially award the company plausible deniability, the document alleges.

The Chinese-based mega company came under fire in 2020 for selling swastikas in pendants and Muslim prayer rugs as around-the-house mats.

Its responses to being called out on both of those products were "comically token," the complaint said.

"For the record, Shein was not selling a Nazi swastika pendant," a company spokesperson told the New York Post at the time. "The necklace is a Buddhist swastika which has symbolized spirituality and good fortune for more than a thousand years."

One of the designs Shein is accused of copying (SHEIN)

"We made a serious mistake recently by selling prayer mats as decorative rugs on our site. We understand this was a highly offensive oversight and are truly sorry," read another statement the company released in its Instagram.

The copies the company produced of the three designers' work came as a surprise and "outraged" the designers.

"Why would Shein go to the trouble of precisely duplicating their work - when it would be easier and obviously less problematic to simply closely knock them off as other corporate apparel companies often do?" the complaint demanded.

"As it turns out, exact copying is part and parcel of Shein’s 'design' process and organizational DNA," it added. "The deeper one digs into Shein's business model, the more it becomes clear that a pattern of systematic criminal intellectual property infringement is baked in from the very beginning."

Plaintiffs in the Shein case have filed action under the RICO Act (Bloomberg via Getty Images)

The plaintiffs said copies like those produced by the company "can greatly damage an independent designer's career."

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They blame the algorithm Shein uses to sell its products, which "determines nascent fashion trends" and produces designs "that are perfectly executed to grease the wheels of the algorithm, including its unsavory and illegal aspects."

Now, they're accusing the company of racketeering and taking official action against it via the Racketeer Influenced and Corrupt Organizations Act (RICO).

"Shein has grown rich by committing individual infringements over and over again, as part of a long and continuous pattern of racketeering, which shows no sign of abating," the complaint alleges.

The plaintiffs want to be payed for the damages incurred by the company, and they want to take the giant down.

Jeremiah Hassel