Shein has been accused of infringement of the intellectual property of three artists as they sell the exact copy of the items they created. The lawsuit filed by these artists additionally says that the company has managed to grow rich by committing infringements over and over again and that this was now a deliberate design of its entire business model.
The Chinese fast-fashion company had been banned from many countries but in the U.S. no dramatic action had been taken against them. the 52-page complaint filed by the designers accused the company of copyright infringement and racketeering under RICO Act (Racketeer Influenced and Corrupt Organizations Act). The complaint was filed on Tuesday and the designers have extensively explained how this has occurred consistently.
Shein has faced multiple lawsuits for the same from a plethora of creative artists and professionals in the recent years. Some of these cases are settled while others remain pending. But this new case was filed in federal court in Los Angeles and it is not just centered around individual theft, it alleges that there has been a constant pattern of intellectual property infringement from the inception of the company.
Kristina Perry, a plaintiff, found out that a copy of one of her designs had been uploaded on Shein and Romwe (the company’s other fashion site). These had been taken from the artists “without their knowledge or permission,” and when she filed a complained through the website the multi-billion company offered her $500.
The offer made by the company comes as a low blow, as it is estimated to be worth around $66 billion. As the lawsuit states it seemed like a “mom-and-pop operation rather than one of the richest enterprises in the world.” But what was worse is that even after Kristina Perry contacted them the company continued to sell the copies and never took it down from their website.
The lawsuit alleges that the company works on an algorithmically fueled method even helps them facilitate such misappropriation. While for bigger companies like Nike, if they are sued they have to reach a large settlement. But, for Shein and Romwe, they steal designs from smaller artists and offer them a measly settlement.
Jay Baron and Larissa Blintz are the other two designers who claim their copyrighted designs had been stolen by Shein. In return a Shein rep confirmed that they will fight the infringement claims seriously and it will “vigorously defend against…any claims without merit.”
The lawsuit claims that the intellectual property theft is always avoided as the company has a decentralized structure which allows it to pass off the blame or redirect it to third parties as if they were independent. It is even more difficult for the artists who have been conned to hold specific people accountable. RICO, the Racketeer Influenced and Corrupt Organizations Act, is a law that helps combat organized crime.
Hence, to fight against such a decentralized corporate structure the lawsuit must be catering and proving this systematic avoidance of copyright infringement and how it manages to do so. If the RICO lawsuit is successful then the artists would be able to receive a triple of the actual damages caused.