{"id":9136,"date":"2024-02-01T19:31:53","date_gmt":"2024-02-01T19:31:53","guid":{"rendered":"https:\/\/ncjolt.org\/?p=9136"},"modified":"2024-02-01T19:31:53","modified_gmt":"2024-02-01T19:31:53","slug":"fast-fashion-creating-even-faster-copies-examining-sheins-intellectual-property-and-racketeering-suit","status":"publish","type":"post","link":"https:\/\/journals.law.unc.edu\/ncjolt\/blogs\/fast-fashion-creating-even-faster-copies-examining-sheins-intellectual-property-and-racketeering-suit\/","title":{"rendered":"Fast Fashion Creating Even Faster Copies?: Examining Shein\u2019s Intellectual Property and Racketeering Suit"},"content":{"rendered":"\n
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Chinese fast fashion \u201cetailer\u201d Shein has officially surpassed Zara and H&M as the world\u2019s largest fashion retailer<\/a> after only 15 years in existence. The online retailer jumped in sales from $10 billion in 2020<\/a> to $100 billion in 2022, surpassing the sales of both Zara and H&M combined. On the surface, it seems like Shein cracked the code for commercial success, harnessing the power of an online-only model to rope in consumers. However, independent designers are accusing Shein of something much more sinister: systematic and rampant intellectual property theft amounting to racketeering. <\/p>\n\n\n\n

In July of 2023, designers Krista Perry, Larissa Martinez and Jay Baron filed a complaint<\/a> in California federal court, alleging that Shein\u2019s \u201cegregious intellectual property infringement\u201d is \u201cbaked into its business model.\u201d The plaintiffs are seeking relief for four claims of copyright infringement, one claim of trademark infringement, and one claim for violation of the Racketeer Influenced and Corrupt Organizations Act (RICO). Here\u2019s everything you need to know about the pending lawsuit:<\/p>\n\n\n\n

Shein\u2019s ‘egregious intellectual property infringement’ is ‘baked into its business model’<\/p><\/blockquote>\n\n\n\n

The Plaintiffs’ Claims<\/strong><\/p>\n\n\n\n

Designer Krista Perry is accusing Shein of selling wall art and phone cases emblazoned with \u201cmechanical cop[ies]\u201d<\/a> of her original artwork. After Perry complained through contact forms on Shein\u2019s website, \u201can agent at the email address copyright@shein.com<\/a> offered to pay her $500, without release or settlement language.\u201d Perry called Shein\u2019s behavior \u201cdownright evil.\u201d This was not the only design she alleged was stolen. In 2020, Perry created and copyrighted a design called \u201cFloral Bloom\u201d for throw blankets. Despite having already refused to grant Shein a license to use any of her work on its clothing, Shein used \u201ca mechanical copy of Perry\u2019s pattern on an identical throw blanket as the one Perry sells\u2026\u201d Other plaintiffs allege that this approach was used to steal their designs. Jay Baron, who created and copyrighted an original artwork entitled \u201cTrying My Best\u201d in 2016, and Larissa \u201cBlintz\u201d Martinez, who designed \u201cOrange Daisies\u201d in 2018, argue that Shein knowingly sold mechanical copies of their works. Additionally, Baron asserts that the mark \u201cTrying my Best\u201d is a source-identifier for him and his products. He believes that Shein\u2019s use of an identical mark will cause confusion and suggest Baron\u2019s sponsorship, endorsement, or approval of Shein.<\/p>\n\n\n\n

The RICO Claim<\/strong><\/p>\n\n\n\n

The plaintiffs consider these copyright and trademark violations as more than isolated incidents. According to the complaint<\/a>, the Racketeer Influenced and Corrupt Organizations Act \u201cwas designed to address the misconduct of culpable individual cogs in a larger enterprise.\u201d  This definition encapsulates Shein\u2019s business model, the plaintiffs argue, because the retailer operates by decentralizing activity through a \u201cde-facto association of entities.\u201d Therefore, the plaintiffs accuse Shein of deliberately avoiding liability<\/a> for systematic copyright infringement by operating a network of separate companies that work together to create clothing that infringes on the artists\u2019 copyrights in violation of RICO. <\/p>\n\n\n\n

Shein’s Response<\/strong><\/p>\n\n\n\n

In a statement<\/a> made shortly after the lawsuit was filed, Shein said:<\/p>\n\n\n\n

\u201cShein 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.\u201d<\/p>\n\n\n\n

In October, Shein filed a motion<\/a> to dismiss the RICO claim, stating that \u201cgarden variety copyright infringement claims, like those alleged by Plaintiffs here, cannot serve as predicate acts to establish a RICO violation, regardless of whether the predicate act is styled as criminal copyright infringement or wire fraud.\u201d The motion also urges the court to dismiss Baron\u2019s copyright infringement claim because \u201chis alleged artwork is not protectable under copyright law.\u201d<\/p>\n\n\n\n

What\u2019s Next?<\/strong><\/p>\n\n\n\n

Shein is no stranger to lawsuits. The company\u2019s IP infringement has given rise to over 50 federal lawsuits<\/a> in the United States, and they\u2019re also under investigation for human rights violations involving forced labor. However, this is the first group of plaintiffs to bring a RICO claim against the fast-fashion giant, meaning that a win for these designers could set legal precedent. It\u2019s difficult to gauge how much it will take for Shein to significantly alter their business tactics, but a complaint they\u2019ve never heard before could be a fruitful place to start. <\/p>\n\n\n\n

Caroline Kloster<\/strong><\/p>\n\n\n\n

Caroline Kloster is a 2L at UNC School of Law. She graduated from UNC-Chapel Hill in 2022 and is interested in intellectual property matters as they relate to creative industries.<\/p>\n","protected":false},"excerpt":{"rendered":"

Chinese fast fashion \u201cetailer\u201d Shein has officially surpassed Zara and H&M as the world\u2019s largest fashion retailer after only 15 years in existence. The online retailer jumped in sales from $10 billion in 2020 to $100 billion in 2022, surpassing the sales of both Zara and H&M combined. On the surface, it seems like Shein cracked the code for …<\/a><\/p>\n","protected":false},"author":4,"featured_media":9137,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[51],"tags":[179,413,484,383,531,530,529],"_links":{"self":[{"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/posts\/9136"}],"collection":[{"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/comments?post=9136"}],"version-history":[{"count":4,"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/posts\/9136\/revisions"}],"predecessor-version":[{"id":9144,"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/posts\/9136\/revisions\/9144"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/media\/9137"}],"wp:attachment":[{"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/media?parent=9136"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/categories?post=9136"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/tags?post=9136"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}