Shein has lost its High Court copyright claim against Temu over photographs of its clothing, in a ruling that an intellectual property attorney says may push rights holders to pursue the independent sellers who upload listings rather than the platforms that host them.
Mrs Justice Bacon handed down judgment on 13 August in Roadget Business Pte Ltd and another v Whaleco UK Ltd. Shein’s claim covered 2,559 product listings on Temu’s UK site, according to the judgment, and alleged that photographs of its own-brand clothing had been used on Temu to advertise copies. Shein’s case was that the copying had happened “on an industrial scale” and that Temu had used the images to “piggy-back” on a better-known competitor.
Temu, which belongs to PDD Holdings, denied the claims and said Shein’s lawsuit was an attempt to stifle competition.
Shein’s main argument was that Temu had authorised infringement by the merchants who uploaded the images. The judge disagreed, pointing out that Temu “prohibits merchants from uploading infringing content”. A second argument, that Temu had reproduced the photographs itself, was not pursued by Shein because the servers behind Temu’s UK site are outside the United Kingdom, the judge said.
Even if infringement had been established, the judge found, Temu could have relied on the hosting defence, which shields an intermediary platform from liability for third-party uploads it does not know are infringing. “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,” she said.
What the judgment says about sellers
The judgment records that “Temu does not sell its own products on its platform” and that “merchants selling products on the Temu platform are independent entities” who “are responsible for the content of their listings, including the photographs”. Temu’s seller service agreement requires merchants to warrant that they have the right to use the photographs they upload, to undertake that the photographs do not infringe intellectual property rights, and to grant Temu a non-exclusive licence to use them, the judge noted.
The hosting defence comes from regulation 19 of the Electronic Commerce (EC Directive) Regulations 2002, which protects a service provider that “does not have actual knowledge of unlawful activity or information” and, once it knows, “acts expeditiously to remove or to disable access to the information”. The judgment describes Temu’s notice and takedown process: “Once a product listing on Temu UK has been identified by a reviewer as one which may infringe intellectual property rights, the listing is flagged and removed.”
According to Elise Cant, an associate and trade mark attorney at Marks & Clerk, the intellectual property firm, the court characterised Temu’s part in the use of the photographs as being of a “mere technical, automatic and passive nature”.
Cant added: “The decision is likely to be welcomed by market-place based retailers although traditional retailers may view it less favourably. It provides greater legal certainty for online marketplaces by confirming that platforms such as Temu which play a passive intermediary role in the advertisement and sale of goods on their website are less likely to face liability for infringing content uploaded by third-party sellers.”
She added that the ruling “may make it more difficult for traditional retailers and rights holders to pursue infringement claims against marketplace operators where infringing product listings are uploaded by independent sellers, potentially shifting the focus of enforcement efforts towards the sellers themselves rather than the platforms that host their listings”.
Shein said nobody disputed that it owned the thousands of photographs in the case or that they had appeared on Temu’s site. “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,” a spokesperson for the company said.
Business Matters has reported that UK retailers want ministers to speed up a tax crackdown on low-value imports sold through Shein and Temu, and that Shein posted a $99m quarterly loss before a planned listing in Hong Kong. Not Ltd has previously covered small traders drawn into brand disputes and selling through social commerce platforms.
