Shein’s legal skirmishes are getting messier.
After accusing its rival Temu of “impersonating the Shein brand” on social media, the e-tail juggernaut is now suing Twitter to compel it to hand over all undeleted data, including posts, replies, retweets, comments, IP addresses and device settings, related to the so-called “fraudulent” accounts in a bid to unmask their perpetrators.
In a motion submitted to the Northern District of California late last month, Roadget Business, the Singapore-registered entity that has operated Shein since the end of 2021, argued that PDD Holdings and Whaleco, which operate Temu, have been trading off Shein’s trademarks and copyrighted images as part of its product listings on Twitter “in an effort to unlawfully promote its products and services and trick consumers into buying from Temu and/or downloading its mobile application.”
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Twitter, it said, had refused to comply with a subpoena demanding information about now-suspended accounts such as @SHEIN_NYC, @SHEIN_DC and @SHEIN_USA_, that would allow Roadget Business to determine if they were associated with Temu or anyone acting on Temu’s behalf, delve deeper into how these accounts were used for Temu’s benefit and Shein’s detriment, and mitigate “any negative effects” of Temu’s “wrongdoing.”
But the social media giant said that it objected to the request because it exceeds the scope of basic subscriber information that Twitter may “permissibly produce” under the Electronic Communications Privacy Act, including the Stored Communications Act, or SCA. It also told Roadget Business that the information is better obtained by serving Temu with a discovery request, and that its use of terms such as “posts” “data relating to such posts,” and “likes, retweets and comments” are “vague and ambiguous, overbroad and unduly burdensome” in scope.
Roadget Business, which took over Shein’s brand rights from Hong Kong-based Zoetop Business Co., challenged Twitter’s assertions, however, saying that exceptions in the SCA allow the Elon Musk-owned firm to produce content that users have consented to disclose through its terms of service and privacy policy.
“The SCA also allows Twitter to produce public posts and all data relating to such posts because users’ publication of the posts to the general public constitutes consent and, moreover, the public, including Roadget, is the intended recipient of the posts,” Roadget Business said. “Twitter’s SCA objections are meritless.”
Temu previously brushed off Roadget Business’s claims, denying that it had made “fake” Twitter accounts and blaming any misinformation on overzealous influencers trying to “game” Temu’s affiliate marketing referral programs.
But Shein, which has been ceding market share to the “Shop Like a Billionaire” platform, isn’t backing off. In a second amended complaint, which Roadget Business filed mid-June in the Northern District of Illinois, the retail phenom accused Temu of being “no garden variety counterfeiter” but one that is “flagrantly misappropriating and tarnishing its primary competitor’s reputability, popularity, and substantial investment by passing itself off as Shein through an overarching scheme of counterfeiting, infringement, impersonation, gross and egregious data privacy violations and trade secret theft.”
Besides “mimicking” Shein’s social media accounts and “passing itself off” as the brand by displaying “counterfeit” Shein trademarks in Google Ads and on Temu’s website and mobile app, the complaint said, Temu has also “willfully infringed, and encouraged and assisted” its sellers in infringing copyrighted product photographs and clothing designs, including by providing them image editing software.
“Temu does not want to compete with Shein; it wants to be Shein, and if it is not deterred and enjoined, not only will Roadget continue to be irreparably harmed, but United States consumers and other intellectual property rights holders will as well,” Roadget Business said.
Shein is sweating Temu for good reason. Temu reared its head in the United States only in September, yet it has already outstripped Shein as the No. 1 most downloaded shopping app in the country. In May, U.S. spending on Temu was 20 percent higher than at Shein, according to Bloomberg Second Measure, which analyzes credit and debit card transactions.
But the relative incumbent has some tricks up its sleeve, including moving to a third-party marketplace model that will drastically expand its offerings beyond fashion and beauty. Shein has also onboarded high-end brands such as Paul Smith and Stuart Weitzman, juxtaposing $450 pumps and $395 rompers with under-$20 lookalikes. The Wall Street Journal reported over the weekend that the IPO aspirant has been wooing third-party sellers with incentives such as free advertising and zero commission fees for the first three months. Qualifying isn’t easy, however. To enter the fold, sellers must already have annual sales of $2 million on Amazon, according to some recruitment postings.
Temu told Sourcing Journal in March that it is “committed to protecting everyone’s intellectual property rights and has a strict policy against any listing that violates any third party’s IP rights.”
“Since inception, Temu has been named as defendant in only one lawsuit alleging intellectual property infringement, which Temu strongly and categorically rejects all allegations and is vigorously defending its rights,” a spokesperson said. “Coincidentally, this [is the] only case [that has been] brought by Shein, which has been named as [a] defendant in more than 70 intellectual property infringement cases by international rights holders and independent artists since 2019.”
Indeed, Shein is currently fending off its own lawsuit from Tex-V, a South Korean company that filed in late June a complaint alleging that Shein, Roadget Business and Zoetop Business Co. infringed its copyright by manufacturing and distributing one of its textile designs: a pattern of golden chain links and laurel wreaths on a black background. Tex-V has previously filed complaints against Boohoo and Fashion Nova for similar infractions, though Boohoo countered last week with a notice of dismissal without prejudice.
Tex-V wrote that it had sent Shein cease-and-desist correspondence regarding the offending garments, which included a belted dress, jumpsuit and skirt, “in an attempt to explore an amicable resolution of this dispute without the need for litigation,” but was ultimately successful, hence necessitating the case. It said that due to the infringement, it has suffered damages in an amount to be established at a juried trial.
And Temu, for its part, might be in for another wave of trouble. Wired reported Monday that Temu sellers are allegedly cloning Amazon storefronts but offering these duplicate listings at cheaper prices. The outlet found at least one seller who admitted to the tactic: One common strategy promulgated by seller WeChat groups is to pore through bestseller lists on Amazon and then see if the same products can be manufactured for less, this person said. Wired also spoke to Amazon store owners who have found their images and product descriptions copied and pasted into Temu, cutting into their sales.
Amazon told Sourcing Journal that it strongly condemns “this type of criminal activity” and that it encourages any brand that believes it a victim of infringing products to contact its Counterfeit Crimes Unit so it can “investigate and take appropriate action.”
“In addition to a number of leading brand protection capabilities Amazon provides to protect brands in our store, we also help brands protect themselves across the industry,” a spokesperson said. “Thousands of small businesses have used Amazon IP Accelerator to connect with trusted law firms that can help these small business owners obtain and enforce their intellectual property rights, and Amazon Counterfeit Crimes Unit works to hold counterfeiters accountable and stop them from selling counterfeits anywhere.”
Temu did not respond to requests for comment. A Shein spokesperson said the company does not comment on pending litigation. An email to Twitter’s press department generated a poop emoji in auto-response. Sourcing Journal also reached out to Boohoo and Fashion Nova.
