A newly filed lawsuit delves into the alleged workings of Shein and its “industrial-scale scheme of systematic, digital copyright infringement,” which largely depends on the use of artificial intelligence (“AI”). In the complaint that he lodged with the U.S. District Court for the Southern District of New York on April 5, artist Alan Giana alleges that ultra-fast fashion giant Shein “copied and displayed [his] artwork on [its] website without any authorization or permission [and] manufactured products bearing [his] artwork,” thereby, giving rise to his copyright infringement claim. At a broader level, he argues that “widespread copyright infringement is baked into” Shein’s business model, enabling it to generate thousands of designs per day and annual revenues of over $30 billion.
Maybe more interesting than Giana’s single copyright infringement claim (and his assertions that its pattern of infringement likely impacts “thousands, tens of thousands, or even hundreds of thousands” of other artists and/or designers, as well, making class action certification appropriate in this case) are his allegations about the workings of Shein, including from an AI perspective.
Algorithms & Artificial Intelligence
In an effort to expose the allegedly illicit nature of Shein’s operations, Giana contends that the China-founded, Singapore-based company does not create or design “many of its products,” and instead, it relies upon “sophisticated electronic systems that algorithmically scour the internet for popular works created by artists” and designers. “It then misappropriates those works to manufacture and sell [the designs as its] own products, without notice or attribution to the artists and creators,” he claims, in a nod to his copyright infringement claim.
Specifically, Giana argues that Shein uses “algorithms, AI, and related computerized monitoring systems to identify trending and ‘viral’ images and designs on social media, apps, and websites.” In order to manufacture new items based on the “cutting-edge, fashionable trends” that its system identifies and to do so at a rapid speed, Giana maintains that “the outputs of Shein’s algorithm-based design system – in many instances identical copies of copyrighted works – are transmitted directly to Shein’s factories for production.” This comes without any “human intermediary or compliance function [to take] care that the algorithm’s designs are not the property of others.”
All the while, Giana claims that Shein “supplements its electronic data-mining system with online research and industrial surveillance of its retail competitors” to ensure that it is utilizing “pattern[s], design[s], drawing[s], painting[s], photograph[s], image[s], or other artwork[s] that … have a high potential of commercial success.”
TLDR: “After scraping data from non-Shein sources to identify relevant trends, Shein purportedly uses its algorithms to identify products for Shein’s suppliers to manufacture. Shein then automatically sends orders for the requested products to one or more of Shein’s legions of suppliers, adjusting production demands depending on the traction that the products get with Shein’s customer base.”
Continuing on, Giana sates that Shein’s “years-long use of a sophisticated system of algorithms, AI, and other electronic surveillance to copy and appropriate copyrighted works designed and owned by others confirm that [its] serial copyright infringement is willful — and not merely a result of ignorance that [its] conduct constitutes copyright infringement.” In other words, Shein is and has been “aware that deliberately taking the works of others and passing them off as the works of [its own] or [its] suppliers results in pervasive infringement of the copyrights of others.”
With the foregoing in mind, Giana sets out a single copyright infringement cause of action, and in addition to certification of its proposed class action, it is seeking injunctive relief and monetary damages.
THE BIGGER PICTURE: Not the first case to take issue with Shein’s business model, three independent designers filed suit against the company in a California federal court tin July 2023, arguing that Shein has “made billions [of dollars] by creating a secretive algorithm that astonishingly determines nascent fashion trends.” The company’s algorithm “could not work without generating the kinds of exact copies that can greatly damage an independent designer’s career,” the plaintiffs assert, noting that the AI used by Shein “is smart enough to misappropriate the pieces with the greatest commercial potential.”
The cases are interesting and worthy of attention in light of the increasing rate of adoption of AI models in fashion, including by companies that are angling to analyze market data in real time in order to identify trends, and to design and manufacture products more quickly.
A rep for Shein was not immediately available for comment.
The case is Giana v. Shein Distribution Corp, 1:24-cv-02599 (SDNY).
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