A court has sided with Shein in the latest round of an intensifying battle against fellow ultra-fast fashion giant Temu. In a newly-issued order in the case, which stems from Temu’s claims that Shein has engaged in a “mafia-style” scheme to intimidate suppliers and abuse the U.S. legal system in order to “illegally interfere with Temu’s business,” a federal court in Washington, D.C. refused to grant Temu’s bid for a preliminary injunction to essentially block Shein from submitting “meritless” Digital Millennium Copyright Act (“DMCA”) takedown notices, which Temu has argued are exclusively aimed at stifling competition.
In particular, Temu sought an order from the court that would require Shein to “provide proof that it owns the copyrighted material or is acting on behalf of the copyright’s owner along with each [DMCA] takedown notice it submits to Temu while this suit is pending.” The court’s recent ruling marks a significant development in the latest round of an ongoing feud between two of the fastest-growing global e-commerce platforms.
A Bit of Background: Temu lodged a wide-ranging complaint against Shein in December 2023 on the heels of the ultra-fast-fashion retailers settling rival lawsuits. In its complaint, Temu alleged that China-founded, Singapore-based Shein has engaged in a “mafia-style” scheme to intimidate suppliers and abuse the U.S. legal system in order to “illegally interfere with Temu’s business.”
Specifically, Temu alleges that Shein has systematically targeted its platform by submitting thousands of DMCA takedown requests – averaging 170 per day – with over 33,000 filed in total. According to Temu, Shein’s takedown notices are not just excessive but often baseless, designed to disrupt its business rather than protect legitimate intellectual property rights. Temu sought an injunction to require Shein to provide proof of copyright ownership or authorization before submitting takedown notices, limit its submissions to 100 per day, and include properly formatted links in each notice.
The Court’s Ruling: No Irreparable Harm
In an opinion and order on February 9, Judge Timothy J. Kelly of the U.S. District Court for the District of Columbia rejected Temu’s bid for an injunction. Judge Kelly’s decision hinged on his determination that Temu failed to show that Shein’s takedown practices had caused significant, non-economic harm that could not be remedied through monetary damages. (Note: “A plaintiff seeking a preliminary injunction must establish that he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in his favor, and that an injunction is in the public interest.”)
Temu argued that Shein’s conduct (namely, Shein’s filing of “meritless” DMCA takedown notices) was damaging its reputation, relationships with sellers, and competitive standing. However, the court found these claims to be speculative. The ruling emphasized that while some of Temu’s sellers expressed frustration over Shein’s DMCA takedowns, the court found that Temu provided was no clear evidence that these sellers blamed Temu or were leaving the platform as a result of Shein’s actions.
While Temu argued that third-party sellers on its marketplace site “whose listings are affected by [Shein’s] takedown notices may be “more likely” than others to leave Temu or reduce their presence on its site,” the court held that “Temu’s self-serving speculation does not make such harm ‘certain and great’ and “actual and not theoretical.”
Moreover, the court pointed out that Temu, a subsidiary of PDD Holdings, a multi-billion-dollar company, had not demonstrated that the alleged losses threatened its survival or significantly impaired its ability to compete. In fact, the judge noted that Temu had continued to grow despite Shein’s barrage of takedown requests and had not provided data showing sellers were actually leaving its platform.
TLDR: “Temu has not shown that any harm it may suffer is certain, great, actual and not theoretical, and cannot be later remediated with money damages.”
The Broader Battle: DMCAs & Competition
This case is just one piece of a broader conflict between Shein and Temu, which have been engaged in a legal and business war across multiple jurisdictions. Both companies source products from Chinese manufacturers and rely on rapid supply chains to flood the market with low-cost apparel and accessories. Their rivalry has escalated as they vie for dominance in the U.S., with both platforms facing scrutiny over labor practices, infringement allegations, and competitive tactics.
The lawsuit also highlights growing concerns over the use of the DMCA in online retail. While the law was designed to protect copyright holders from online infringement, it has increasingly been criticized for its potential to be exploited for competitive advantage. Temu alleges that Shein’s takedown notices are a strategic effort to remove listings and deter sellers from working with Temu. It is worth noting that the court did not determine whether Shein was misusing the DMCA but simply ruled that Temu had not demonstrated sufficient harm at this stage.
The case is Whaleco Inc. v. Shein Technology LLC, 1:23-cv-03706 (D. DC.)
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