Shein has been met with a new lawsuit after independent designers accused it of infringement-related racketeering activities.
The suit also said the company used a “confusing corporate structure” which allowed it to get round theft accusations and “avoid liability”.
It noted the retailer’s “first line of defence” when met with a “copyright or trademark cease and desist letter or lawsuit” was “removing the product from its sites with blaming the misconduct on another [Shein entity] actor (implying such actor is independent)”.
The Racketeer Influenced and Corrupt Organisations Act (RICO) lawsuit was filed against the fashion retailer in California Federal Court on 11 July, claiming it used a “secret algorithm” to identify fashion trends and allegedly replicate them for itself, says The Fashion Law.
The complaint claimed the algorithm also produced “very small quantities of [its] item for sale in the event a designer accused the design of being stolen.
Artists Krista Perry, Larissa Martinez, and Jay Baron accused the business and its parent company of “produc[ing], distribut[ing], and selling exact copies of their creative works”.
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They also claimed that this was “part and parcel of Shein’s ‘design’ process and organisational DNA”.
The complaint says: “When Shein copies a small or independent designer, the most likely outcome (without brand protection specialists and specialized software on the lookout) is that the infringement will go unnoticed”.
The news comes after US lawmakers called for Shein to be investigated over Uyghur forced labour back in May.
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