Get All Access for $5/mo

'It Is Incredibly Disheartening, Insulting, and Downright Evil': Designers Accuse Shein of 'Egregious' Copyright Infringement and Racketeering The fast-fashion site allegedly continued to sell copies of a designer's work even after being contacted about the infringement.

By Madeline Garfinkle

Key Takeaways

  • Three fashion designers have filed a complaint accusing Shein of copying and selling "exact copies" of their work.
  • The complaint argues that Shein's continuous copyright infringement and racketeering classify it as a criminal organization, making it potentially liable under the Racketeer Influenced and Corrupt Organizations Act (RICO).

Opinions expressed by Entrepreneur contributors are their own.

"For all the scrutiny given to TikTok, it's surprising that Congress has not considered more dramatic action against the Chinese fast-fashion giant Shein," opens a 52-page complaint filed by three fashion designers accusing the company of "egregious" copyright infringement and racketeering under the Racketeer Influenced and Corrupt Organizations Act (RICO).

In the complaint filed Tuesday, the designers allege that the fast-fashion brand stole and sold "exact copies" of their creative work without consent and that Shein engages in a "systematic" and "criminal" pattern of copyright infringement to produce thousands of new items daily. The lawsuit claims that Shein has been doing this since it adopted its business model and algorithm, which started around 2017 or 2018.

"There is a threat of continuing criminal activity extending indefinitely into the future," the complaint says.

One of the plaintiffs, Kristina Perry, noticed that a "brazen copy" of one of her poster designs was being sold on Shein and its other fashion site, Romwe.

"It is incredibly disheartening, insulting, and downright evil to profit off of artists without their knowledge or permission," Perry complained through the website's contact pages, after which Shein offered the designer $500 on behalf of both Shein and Romwe.

"Shein made its offer as if it were a mom-and-pop operation rather than one of the richest enterprises in the world," the lawsuit states.

Even after Perry contacted the company, it continued to sell copies of her design, the lawsuit alleges.

The other two plaintiffs, Jay Baron and Larissa Blintz, also claim Shein stole and sold their copyrighted designs.

A Shein rep, however, told Entrepreneur that the company intends to fight the claims.

"Shein takes all claims of infringement seriously, and we take swift action when complaints are raised by valid IP rights holders," a spokesperson for the brand told Entrepreneur. "We will vigorously defend ourselves against this lawsuit and any claims that are without merit."

Related: Sarah Silverman Is Suing OpenAI and Meta For 'Copyright Infringement,' Using Her Works to Train AI Models

The lawsuit alleges that Shein's intellectual property theft and copyright infringements are not isolated incidents but rather part of a long-standing and continuous pattern, partially facilitated by a decentralized corporate structure that makes it difficult to hold specific individuals accountable. Enter: RICO, a law initially designed to combat organized crime.

The plaintiffs argue that Shein is not a single entity, but a complex corporate structure of many entities, which allows them to "redirect blame" to third parties "as if they were independent."

Chart cited in the complaint highlighting Shein's "complex corporate structure." Public Eye, 2022, (www.PublicEye.ch).

What Is RICO and Why Is Shein Being Accused?

Organized crime functions by carrying out continuous illegal activity through a coordinating network of interconnected entities, making it particularly challenging to trace responsibility. If one member gets caught, no big deal, the organization may still be able to carry out illicit business as usual.

In the case of Shein, the lawsuit highlights how its decentralized structure similarly makes it difficult to accurately pin down "what exactly Shein is," therefore making it "impossible" for those looking to seek legal action to know who to target. The complaint states that victims without representation face an "utter brick wall," and even those with lawyers and "strong cases" still face difficulty finding the right party.

Imagine trying to solve a puzzle, but instead of having all the pieces in front of you, they're scattered across different rooms of a massive, sprawling mansion.

In this case, the lawsuit argues that Shein's decentralized structure, coupled with its continuous acts of copyright infringement and racketeering, constitutes it to the same status as a criminal organization, and under RICO, Shein can be held accountable for the myriad of alleged violations that span its "confusing corporate structure."

Related: Twitter Is Being Sued for $500 Million By Laid Off Employees Claiming Unpaid Severance

Madeline Garfinkle

News Writer

Madeline Garfinkle is a News Writer at Entrepreneur.com. She is a graduate from Syracuse University, and received an MFA from Columbia University. 

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Franchise 500 Annual Ranking

50 Franchise CMOs Who Are Changing the Game

Get to know the industry's most influential marketing power players.

Thought Leaders

6 Tips From a Clean Beauty Entrepreneur

Sarah Biggers went from a newbie in the natural beauty space to a pro in just a few years. Here are six things she wishes she'd known at the beginning.

Side Hustle

'Hustling Every Day': These Friends Started a Side Hustle With $2,500 Each — It 'Snowballed' to Over $500,000 and Became a Multimillion-Dollar Brand

Paris Emily Nicholson and Saskia Teje Jenkins had a 2020 brainstorm session that led to a lucrative business.

Science & Technology

5 Rule-Bending AI Hacks to Make Your Mornings More Productive and Profitable

By 2025, AI will transform productivity by streamlining workflows and cutting costs. Major companies like Microsoft, Google, and OpenAI are leading the way, advancing AI into "Phase 3," where tools act as digital assistants. Discover 5 AI hacks to boost efficiency and redefine your daily routine.

Marketing

5 Critical Mistakes to Avoid When Giving a Presentation

Are you tired of enduring dull presentations? Over the years, I have compiled a list of common presentation mistakes and how to avoid them. Here are my top five tips.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.