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SHEIN Named In RICO ‘Racketeering’ & ‘Copyright Infringement’ Lawsuit

Written by on July 18, 2023

Fast fashion brand SHEIN has been named the defendant in a newly-filed 52-page lawsuit. According to The Fashion Law, the suit alleges SHEIN is committing “intellectual property theft from U.S. designers large and small.”

According to Court Listener, the suit, Perry v. Shein Distribution Corporation, was filed on Tuesday, July 11, in a California court. Additionally, the “cause” of the suit is listed as the “Racketeering (RICO) Act.” The “nature of the suit” is listed as “Racketeer/Corrupt Organization.”

The Fashion Law adds that the suit was filed by three independent designers. Their names are Krista Perry, Larissa Martinez, and Jay Baron.

The group alleges that the fast fashion company and “various related entities” produced, distributed, and sold “exact copies of their creative works.” Furthermore, the plaintiffs allege this process is “part and parcel of Shein’s ‘design’ process and organizational DNA.”

Perry, Martinez, and Baron insist that SHEIN has utilized a “secretive algorithm.” They allege that the algorithm allows the company to predict “fashion trends.” This algorithm then allows SHEIN to imply “corporate structure,” “production,” and “fulfillment schemes” to create “exact copies” of independent designer’s clothing.

Additionally, the plaintiffs explained that the “copied” clothing then generates the company “millions of dollars” in sales while greatly damaging “an independent designer’s career.”

According to The Fashion Law, the plaintiffs acknowledge that it would be “impossible” to prove their theory without further investigation. However, they believe that SHEIN’s “pattern of misconduct” and “commission of new copyright and trademark infringements” is occurring “every day.”

Furthermore, the plaintiffs even share a theory of how SHEIN’s alleged actions go “unnoticed.”

According to them, SHEIN “produc[es] very small quantities of [its] item for sale,” with amounts ranging between “100-200 units per SKU.” This low production of particular designs allows the fast fashion brand to “wait to see if anybody complains that the design was stolen.”

If SHEIN receives a complaint, it can “swiftly” settle the dispute.

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