Shein sues Temu over copyright infringement, alleges rival loses money on every sale

Chinese-linked fast-fashion giant Shein is suing rival Temu, allegingthe retailer stole its designs and built an empire using counterfeiting, intellectual property infringement and fraud. 

The suit, filed Monday in Washington, D.C., federal court, comes as Shein itself fends off similar allegations from a wide variety of brands and independent artists, including Levi Strauss and H&M. 

In its complaint, Shein alleges that Temu, owned by PDD Holdings, is "masquerading" as a legitimate online marketplace because it encourages its sellers to steal other brands' designs and then prevents them from removing products from the platform, even after they have admitted to infringement.

"Temu draws U.S. consumers into downloading and using its mobile application with promises of extremely low pricing. But Temu is not profiting from the sale of these products, which are priced so low that Temu must subsidize each sale, losing money on every transaction," the complaint said. 

"Only by encouraging its sellers to infringe the intellectual property rights of others and sell counterfeit or sub-standard goods can Temu hope to minimize the massive losses it is subsidizing," the lawsuit added.

The dueling e-tailers have taken the retail industry by storm with their ultra low-priced products and their ability to respond to trends far faster than their legacy competitors. Along the way, the two have racked up a mountain of criticism related to their labor practices, their connections to the Chinese government and their alleged use of other brands' designs. 

As the two jockey for market share, they have taken to the courts to accuse each other of a series of scandalous allegations. Last year, Temu sued Shein over copyright concerns and allegations