Author: Zhou YingpingIntellectual Property Finance.
As the popularity of the overseas online retail market continues to rise in recent years, the pace of "involution" of Chinese e-commerce companies is constantly expanding to the world. Among them, SHEIN, a well-known fashion and lifestyle** retailer, and Temu, a cross-border e-commerce platform owned by Pinduoduo, can be regarded as the fastest growing market players. On the legal front outside of market competition, the two major "going overseas" e-commerce giants, Shein and Temu, have also begun to collide head-on.
On February 20, the High Court of Justice Business and Property Courts of England and Wales issued a new interim injunction against TEMU, requiring TEMU to take steps to stop using all ** copyrighted by SHEIN, including **taken by SHEIN, **commercial or external photography agencies**. This is another latest development in the dispute between SHEIN and TEMU since the outbreak of the lawsuit at the end of 2022. Looking back on the dispute between SHEIN and Temu, it can be seen that in addition to the competition of business models, intellectual property rights may become an important issue in the development of cross-border e-commerce in overseas markets.
Latest developments: The English court issued another injunction and TEMU's infringement was judicially recognized
It is understood that the interim injunction issued by the British court against TEMU this time is an updated version of the interim injunction first issued in September 2023. At that time, SHEIN's affiliates filed a lawsuit against TEMU in the UK, alleging that there were thousands of infringing copies on the TEMU platform**, and asked the court to issue an interim mandatory injunction against TEMU, ordering TEMU to remove the relevant infringement based on SHEIN's complaint notice**. In February this year, due to the disagreement between the two parties on the interpretation of the original injunction and TEMU applied for a modification of the injunction, after a new round of hearing proceedings, the English court issued a new interim injunction to continue to prohibit TEMU from infringing on SHEIN. The court made it clear that the injunction applies to all ** in which SHEIN owns the copyright, including those taken by SHEIN on its own, by commercial or external photography agencies. The injunction requires temu to take steps to cease the use of infringing ** within 2 business days of receipt of the complaint letter, failing which it may be penalized for contempt of court.
In response to SHEIN's accusations, TEMU has also previously raised a defense, arguing that the scope of application of the ban should not include SHEIN** of commercial auctions; However, judging from the trial and the verdict, TEMU's claim was not accepted by the court. The presiding judge of the English court, Kelyn Bacon, rejected Temu's request and still upheld SHEIN's claim against **Shang**.
In the Anglo-American judicial system, a temporary injunction is a court writ issued by the court to prevent immediate, irreparable damage to the plaintiff's rights to maintain the status quo or prohibit certain acts, and is an urgent intervention before the final judgment. This time, Shein won a temporary injunction against Temu again, which to a large extent also indicates the final direction of the case.
Dispute Review: The parties accused each other that SHEIN won multiple interim injunctions in the Anglo-American courts
Looking back at the history of the dispute between the parties, it is worth noting that this is not the first time that SHEIN has obtained a temporary injunction against TEMU in an extraterritorial jurisdiction. In December 2022, SHEIN sued Temu for the first time in the United States, alleging trademark and copyright infringement and "false and deceptive business practices." In August 2023, a month before the first interim injunction was issued by a U.K. court, SHEIN won a Temporary Restraining Order (TRO) against TEMU in the Eastern Division of the U.S. District Court for the Northern District of Illinois, which compelled Temu to cease and desist from "continuing to infringe" SHEIN-related copyrights. According to court documents, Temu's infringement includes a large number of plagiarism of clothing designs and plate styles on the Shein platform, repeatedly ignoring infringement notices (DMCA notices) issued by SHEIN, or re-listing the infringing product designs after minor modifications. Since December 2023 and January 2024, SHEIN has won a number of temporary restraining orders from U.S. courts, and the Eastern Branch of the U.S. District Court for the Northern District of Illinois has disclosed three temporary restraining orders, showing that hundreds of infringing products involving SHEIN are involved, most of which are located on the Temu platform, covering **, casual wear, sportswear, children's clothing and other categories, with a wide range.
One of the TRO rulings issued by the U.S. District Court of Illinois against the parties involved, including the TEMU merchants.
In the face of SHEIN's continued accusations, Temu also tried to fight back. In July 2023, Temu filed a lawsuit against SHEIN in federal court in Boston, accusing SHEIN of violating U.S. antitrust laws by using its dominant market power to prevent manufacturers from cooperating with Temu. In October of the same year, both SHEIN and TEMU withdrew their lawsuits in the United States. However, only two months later, according to **, Temu restarted the lawsuit against SHEIN in the United States and accused SHEIN of monopolistic behavior. In response, SHEIN said that Temu's accusations have no legal basis.
Background investigation: cross-border platform contradictions are becoming increasingly apparent, and compliance management will become the focus of development
Data analysis agency dataAccording to AI's 2024 Mobile Market Report released earlier this year, Shein and Temu ranked first to fourth in the 2023 global shopping app growth rankings**, AliExpress, and TikTok Seller, a subsidiary of Douyin. It is foreseeable that while sweeping the global market, the competition between Chinese cross-border e-commerce platforms will also become more intense.
According to public information, SHEIN was originally founded in Nanjing in 2012, starting from the clothing fashion brand "SHEIN", and gradually expanding its business scope to all categories of fashion. According to its official website, SHEIN currently directly serves consumers in more than 150 countries and regions around the world, covering North America, Europe, the Middle East, Southeast Asia, South America, etc., and empowers merchants to jointly build an agile and flexible chain through the on-demand production model, so as to continue to provide rich and cost-effective products to consumers around the world while reducing waste. At present, SHEIN has 11 self-owned brands, and the eponymous clothing brand "SHEIN" has become one of the world's top four fashion brands, which is the biggest feature that distinguishes SHEIN from other e-commerce platforms.
In addition, from 2023, SHEIN has also introduced a platform-based business model, and third-party small and medium-sized sellers can enter the SHEIN platform to sell their products. The series of lawsuits between SHEIN and TEMU only involve SHEIN's own brand products. In contrast, temu adopts an operation strategy that runs in parallel with the hosting and platform model, and all products on the platform are marked as coming from third-party sellers. Similar to the controversy encountered by Pinduoduo in China, Temu, known as the "overseas version of Pinduoduo", has also been accused of plagiarizing product lists, product descriptions and ** on other platforms by its platform sellers overseas; Some of the infringed parties reported that they had complained to temu, but they had never been able to get feedback[2].
In summary, the current overseas legal disputes between SHEIN and TEMU are rooted in the dispute between the two parties over market share and business model. After the period of incremental development, the business scope of major cross-border e-commerce platforms has increasingly overlapped. Under the boom of cross-border going overseas, compliance management will become a key consideration in their future development strategies for Chinese enterprises based on overseas development. For the update on the progress of the legal dispute between SHEIN and TEMU, IP Finance will also continue to track and report.
Notes:1data.AI, 2024 Mobile Market Report:
2.wired，temu sellers are cloning amazon storefronts：