In a fight between fast and ultra-fast fashion, H&M and Shein are embroiled in an ongoing copyright clash in Hong Kong, with H&M accusing Shein of infringing the copyright-protect elements of some of its offerings, including knitwear and swimwear. The case got its start two years ago (in July 2021) when Stockholm-based H&M named Shein Group Ltd. and related entity Zoetop Business Co. as defendants in an infringement complaint, in connection with which it is seeking unspecified damages and injunctive relief to bar the Shein companies from continuing to “infringe on its copyrights.” According to the Bloomberg, the case was first heard in Hong Kong court last September, with the court opting to allow the matter to move forward.
In furtherance of its copyright infringement claims, H&M has argued that “the striking resemblance” between its products and those offered up by Shein serves as evidence that the latter’s goods “must have been copied” from H&M. Moreover, counsel for H&M alerted the court to the “sheer scale” of Shein’s “unauthorized reproduction” of “the”substantial parts” of its copyright-protected works.
Some Background: Hong Kong’s Copyright Ordinance establishes that copyright owners have the exclusive right to carry out certain acts in relation to their works, including “copy[ing] the work on to a tangible medium” and “put[ting] into circulation (i.e., distribut[ing]) copies of the work,” among other things. The Ordinance further states that if a party, “without the consent of the copyright owner, carries out or causes or requires another party to carry out any of the acts [reserved for copyright holders],” it will infringe the copyright of the works at issue. As for the standard of similarity, which is the core inquiry in a copyright infringement claim, S. 22(3)(a) of the Hong Kong copyright law establishes that infringement is gauged on the basis of a “substantial part” of the copyright-protected work being replicated, with “the test for substantiality being qualitative and not quantitative.”
A representative for Shein said the company does not comment on pending litigation. Meanwhile, a spokesperson for H&M confirmed its “ongoing copyright infringement lawsuit towards Shein filed in Hong Kong,” saying, “We believe that Shein in multiple cases has infringed on our designs and have therefore filed this lawsuit. As it is still an ongoing case, we choose not to comment further.”
Back in the U.S., Shein is facing increasing scrutiny, both in the form of regulatory oversight and intellectual property litigation. As CNBC reported in May, “The fast-fashion company has come under fire for accusations of mistreatment of Uyghurs, a marginalized group in China, and for allegedly falsifying reports of forced or underpaid labor of its supplier factories, some of which are allegedly located in the Xinjiang Uyghur Autonomous Region of China.” (Shein has denied working with suppliers in the region.) On the legislative front, the company may also bear the brunt of proposed legislation that would remove trade loopholes that enable companies to import goods into the U.S. without paying import duties.
As for litigation, Shein has been named in a long list of straightforward infringement suits, which are commonly lodged against fast fashion brands. More recently and more interestingly, Shein is being accused of not only carrying out “large-scale and systematic intellectual property theft from U.S. designers large and small,” but of also engaging in infringement-related racketeering activities in the process. According to the complaint that they filed in a California federal court this month, independent designers Krista Perry, Larissa Martinez, and Jay Baron claim that Shein and various related entities, including Roadget Business and Zoetop Business, are on the hook for copyright and trademark infringement in connection with their practice of “produc[ing], distribut[ing], and selling exact copies of their creative works,” and running afoul of the Racketeer Influenced and Corrupt Organizations Act in the process.
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