Shein, a Chinese cross-border e-commerce giant, filed a lawsuit against its competitor, the cross-border e-commerce platform “Temu,” operated by the Chinese company Pinduoduo in the Washington D.C. federal court on Monday (August 19). Shein accused Temu of infringing on intellectual property rights and demanded compensation for losses caused by the infringement of intellectual property and trademark rights.
These two Chinese e-commerce giants have been battling in overseas markets and escalating their fight over e-commerce intellectual property.
According to a report by “Nikkei Asia” on Wednesday (August 21), Shein submitted a complaint to the Washington D.C. federal court on Monday, accusing Temu of selling counterfeit goods, stealing trade secrets, and misleading customers with an “illegal” business model.
The complaint stated that Temu has been “encouraging its sellers to infringe on others’ intellectual property” in order to “minimize the enormous losses of its subsidies.”
It was claimed in the complaint that Temu has taken away Shein’s revenue by selling counterfeit products and at least one Temu employee stole Shein’s popular product trade secrets to help their sellers replicate these products to sell on Temu.
Shein also alleged that Temu has been impersonating Shein through advertisements and social media accounts to direct consumers to visit Temu’s app and website.
Temu refuted Shein’s accusations, with a spokesperson telling “Nikkei Asia,” “This shameless behavior is unbelievable. Shein is deeply involved in intellectual property litigation and daring to fabricate and accuse others of misconduct, which is exactly why they have been repeatedly sued.”
In the past, Shein has been sued by similar accusations by companies like UNIQLO, H&M, and Levi Strauss.
Since last year, Shein and Temu have been litigating against each other multiple times, accusing each other of unlawful behavior. In December of last year, Temu sued Shein for copyright infringement, stating that their anti-competitive practices have intensified, restricting their suppliers to sell only on the Shein platform.
American legislators believe that both of these Chinese companies may be involved in forced labor practices. On June 22, 2023, the United States House Select Committee on Strategic Competition between the United States and the Chinese Communist Party issued a report criticizing Shein and Temu, pointing out the high risk of forced labor in Temu’s supply chain.
The report also mentioned that these Chinese companies have been evading taxes and customs inspections, making it uncertain whether their products are produced using forced labor of the Uighur minority in Xinjiang.