London: Shein has lost its London lawsuit against rival Temu over alleged copyright infringement, in a ruling that could have significant implications for online marketplaces that host third-party sellers.The case marks the first trial in the widening global legal dispute between the two fast-fashion rivals, which have rapidly expanded across international markets with low-cost clothing, accessories and consumer goods.Shein alleged that Temu, owned by PDD Holdings, had infringed its copyright on an industrial scale by allowing merchants to use photographs of Shein-branded clothing on its platform.However, Judge Kelyn Bacon rejected Shein's claims, ruling that Temu had not infringed the company's copyright and that, even if infringement had occurred, Temu would not have been legally liable.The judge noted that Shein had initially argued that Temu reproduced its images, but did not pursue that argument during the trial because Temu's servers are located outside the UK and any alleged reproduction occurred outside the country.A Shein spokesperson said there was no dispute that Shein owned the thousands of images at the centre of the case and that the photographs had appeared on Temu's website."Yet despite copying on an industrial scale, it has avoided liability in the UK simply because the servers supporting its UK website happen to sit in Ireland," the spokesperson said.Temu did not immediately comment on the ruling.Court backs Temu's intermediary defenceIn her written judgment, Bacon rejected Shein's argument that Temu had authorised copyright infringement by merchants who uploaded photographs to the platform.The judge said Temu prohibits merchants from uploading infringing content and found insufficient grounds to hold the company responsible for the actions of third-party sellers.She also ruled that, had copyright infringement been established, Temu could have relied on a hosting defence because it was acting as an intermediary platform rather than as the direct publisher of the content."In so far as any infringements could be established in this case, Temu did not have either actual knowledge of the infringements or awareness of facts or circumstances from which the infringements would have been apparent," Bacon said.Counterclaim succeedsThe court also upheld part of Temu's counterclaim seeking damages after Shein obtained an injunction relating to images for which the court found Shein did not own the copyright.The ruling is seen as an important test of liability standards for online marketplaces and digital platforms that host content uploaded by third-party merchants.Competition case still aheadThe copyright dispute is only the first stage of the companies' legal battle in London.Temu's separate claim alleging that Shein breached competition law by tying suppliers to exclusive agreements is scheduled to go to trial in 2027.The decision comes as Shein continues preparations for a proposed Hong Kong stock market listing that could value the company at more than $30 billion.
