Shein is accusing fast-fashion rival Temu of stealing confidential information to copy its designs, the same accusations Shein has faced in the past.
The lawsuit alleges that Temu, owned by Chinese e-commerce giant PDD Holdings, “masqueraded” as a legitimate marketplace while coercing sellers to steal designs, then continuing to sell the stolen designs even after the sellers admitted to the infringement.
The lawsuit, filed Monday in federal court in Washington, D.C., is just the latest in a years-long legal battle between the competitors.
Shein and Temu, both of which have ties to China, have captured significant shares of the US market.
The e-commerce site has won over customers with ultra-low prices and frequent trendy product launches, but has also been linked to controversy over sustainability and forced labor.
Shane argued that Tem was losing money on every sale.
“Tem is only able to minimize its enormous losses from the subsidies by encouraging its sellers to infringe on the intellectual property rights of others and sell counterfeit and low-quality goods,” the complaint reads, ironically referring to the same business model that Shane appears to use.
SHEIN itself is being sued by Levi Strauss, H&M and Dr. Martens boot maker Airwear International, all of which claim the e-commerce site has copied their designs.
A Tem spokesperson told CNBC that Shain’s “boldness is incredible.”
“Buried under a mountain of intellectual property litigation for its own company, Shane has the nerve to manufacture charges against other companies for the same misconduct it has repeatedly been accused of,” a Tem spokesman said.
Tem filed a lawsuit last year alleging Shane used “mafia-style intimidation” tactics to stop merchants and suppliers doing business with Tem.
The lawsuit alleges that Shein “wrongfully detained” vendors who did business with both companies by holding them captive in Shein’s offices for hours, confiscating their cellphones and threatening them for doing business with Temu.
Shane’s lawsuit also described Tem’s similarly shady business tactics as “brazen.”[ly]” stole Shein’s internal trade secrets and pricing information.
According to the complaint, Temu then instructed its distributors to copy Shein’s stolen best-selling designs and sell them on Temu’s site.
The complaint includes approximately a dozen images used on Temu’s site that are virtually identical to images on Shein’s site, with some of the photos slightly cropped and others advertising the exact same design in different colors.
One of Shein’s designs features four autumn-themed coffee cups with jack-o’-lanterns and bats on a beige background, while the Temu version features the same design on a light blue background.
Shein alleged that Temu was posing as a competitor on social media in an attempt to lure customers away from Shein’s site.
The complaint includes screenshots of fraudulent Shein accounts on X, which it claims Temu has used in the past to trick customers into believing the two companies are the same.
Tem has used the same tactic with advertising, Shane said. Tem pays for ads with “Shane” in the headline of search engines that redirect users to Tem’s website when clicked, the lawsuit said.
According to the lawsuit, Tem paid social media influencers to say that its knockoff products were of higher quality than Shein’s original products.
“Tem has taken every measure to imitate Shayne, including stealing Shayne’s resources, employees and suppliers,” the lawsuit states.
Shane is seeking damages, has asked the court to stop Tem from using the Shane brand name in the future and has asked for the return of Shane’s confidential documents.
