Popular Chinese fast fashion brand, Shein, is in the midst of a lawsuit in the United States accusing it of large-scale intellectual property theft.
These allegations go so far that the lawsuit equates Shein with a criminal organization and violator of the RICO Act (Racketeer Influenced and Corrupt Organizations Act).
The scope of the allegations
The lawsuit filed by designers Krista Perry, Larissa Martinez and Jay Baron, alleges that Shein has engaged in a prolonged and continuous pattern of large-scale copyright infringement.
According to the plaintiffs, the brand has used a secret algorithm to identify emerging fashion trends and has combined this with a complex corporate structure to efficiently drive its operations.
Additionally, it is alleged that Shein has used this approach to steal designs and sell identical products at much lower prices than the originals, generating billions in profits.
The lawsuit against Shein also accuses the company of violating the RICO Act, which seeks to combat the illegal activities of criminal organizations.
By linking copyright infringement to an actionable pattern of racketeering, the plaintiffs argue that Shein has carried out its actions as part of an ongoing pattern of organized crime. RICO allows for harsher penalties and provides a method to address the penetration of organized crime into different sectors.
Additional repercussions and lawsuits
Shein is no stranger to legal controversies and allegations in recent times. Other brands, such as Ralph Lauren, have also filed lawsuits against Shein on similar grounds, albeit without the racketeering accusation. In addition, the brand has been the subject of criticism related to the possible use of forced labor in China, leading to investigations and requests to halt its initial public offering.
These allegations and controversies have led to increased scrutiny of Shein's business practices.
Implications for the fashion industry and designers
The lawsuit against Shein highlights a recurring problem in the fashion industry: intellectual property theft and unauthorized copying of designs. It raises concerns about the protection of designers' rights and ethics in fast fashion.
If the allegations against Shein are proven, it could have a significant impact on how intellectual property is addressed and protected in the industry.