Chinese fast fashion e-commerce company Shein has recently been sued again in the United States for racketeering and plagiarizing the work of three independent designers.
The plaintiffs accused Shein, a Chinese company that recently changed its headquarters’ address to Singapore, violated the Racketeer Influenced and Corrupt Organizations Act (RICO), as the company has engaged in “racketeering activity and for the unlawful and purpose of intentionally and criminally infringing Plaintiffs’ and others’ copyrights for massive financial gain.”
The lawsuit, filed on July 11 by designers Krista Perry, Larissa Martinez, and Jay Baron, alleges that Shein “produced” and “sold” their designs without permission.
“As shown below, these are not the familiar ‘close call’ legal claims where a corporate apparel manufacturer takes inspiration a bit too liberally. At issue here, inexplicably, are truly exact copies of copyrightable graphic design appearing on Shein products,” the complaint states.
The complaint also pointed out how Shein creates up to 6,000 new products every day, which they say is inseparable from its deceiving designers and infringing copyrights.
A worker makes clothes at a garment factory that supplies SHEIN, a cross-border fast fashion e-commerce company in Guangzhou, in China’s southern Guangdong province, on July 18, 2022. (Jade Gao/AFP via Getty Images)
A spokesperson for Shein told media outlets: “SHEIN takes all claims of infringement seriously, and we take swift action when complaints are raised by valid IP rights holders. We will vigorously defend ourselves against this lawsuit and any claims that are without merit.”
This is not the first time Shein has been accused of copyright infringement. As early as 2021, the brand had been accused of plagiarizing clothing designs from many well-known international manufacturers. It has been sued by brand names such as Levi Strauss, Dr. Martens, and Ralph Lauren. Many influencers on YouTube also deliberately put on a variety of “similar clothing” from Spanish brand Zara and Shein for people to compare.
Sen. Marco Rubio (R-Fla.) pointed out in an open letter last month that “Shein is able to offer this array of products at rock-bottom prices not because of any particular competitive advantage, but because it steals intellectual property, infringes copyrights, exploits U.S. trade law, and uses fabric linked to Uyghur slave labor.”
Rubio said Shein gets free access to U.S. markets by dodging China tariffs. “Shein ships small packages direct-to-consumer using a trade loophole known as de minimis entry,” he wrote. “Shein abuses this entry category to avoid customs duties and inspections on its unethically produced products. Shein’s exploitation of de minimis entry prevents scrutiny under UFLPA [Uyghur Forced Labor Protection Act], cheats taxpayers of customs revenue, and undercuts American competitors that play by the rules.”
The signage of cross-border fast fashion e-commerce company SHEIN at a garment factory in Guangzhou, in China’s southern Guangdong province, on July 18, 2022. (Jade Gao/AFP via Getty Images)
The de minimis rule stipulates that some international packages valued at or below $800 are not subject to customs duties. U.S. senators have been re-examining the rule and expressed concerns about it being used to unfairly benefit Shein, a retail company founded in China, and its rival Temu, another Chinese company registered in the United States.
Mike Gallagher, chairman of the U.S. House Select Committee on the CCP, and James Comer, chairman of the Committee on Oversight and Accountability, sent an open letter on June 28 to U.S. Postmaster General Louis DeJoy requesting “documents, information and data” related to e-commerce shipments of goods from China to the United States.
Observers have also been calling on banning Shein in the United States, due to its unfair and illegal operations and its harm to American businesses.
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