IP Law Daily, COPYRIGHT—D.D.C.: An innovative effort to limit abusive DMCA takedown notices falls short, (Feb 11, 2025)

By Matthew Hersh, J.D.

An online merchandiser sought to limit a competitor’s barrage of notices.

A Chinese-owned online retail marketplace was not entitled to a preliminary injunction that would have narrowed a competitor’s ability to bring takedown notices under the Digital Millennium Copyright Act, the federal court for the District of Columbia has held. The court, in denying the injunction, found that the online retailer had not established that the competitor’s voluminous takedown notices, even if meritless, caused harm to the retailer that could not be compensated by an eventual award of damages (Whaleco Inc. v. Shein Technology LLC, No. 1:23-cv-03706-TJK (D.D.C. Feb. 9, 2025)).

The lawsuit arises out of a dispute between two longstanding competitors in the online retail market. Temu is a Chinese-owned online marketplace that sells discounted goods in a wide range of countries, including the United States, Canada, and much of the European continent. Shein is an online retailer, also Chinese-owned, that focuses on discount fashion and lifestyle goods. Both retailers have come under Congressional scrutiny in recent years due to allegations over forced labor and their avoidance of customs duties through the so-called “de minimis exemption” of U.S. tariff laws (an exemption that the Trump Administration eliminated, and then reinstated, in rapid succession this month).

The two competitors have been engaged in several rounds of litigation in the District of Columbia. Temu struck first, filing a 72-page complaint that accused Shein of copyright infringement, trademark infringement, trade secrets theft, antitrust violations, the bringing of false takedown notices under the Digital Millennium Copyright Act, and various common law violations. Shein struck back a year later, leveling a complaint with many of the same allegations against Temu. Motions to dismiss are pending in both cases.

Temu sought a motion for a preliminary injunction on its DMCA claims in the first-filed litigation, leading to this decision.

DMCA preliminary injunction. The court declined to grant the preliminary injunction. At issue in the motion was a flood of DMCA takedown notices brought by Shein against products marketed on Temu—an average of 170 notices per day, or 33,000 in total since 2022. Many of the takedown notices, moreover, were allegedly substantively defective or based on flawed copyright registrations. Accordingly, Temu’s proposed preliminary injunction would require that Shein provide proof that it owned the copyrighted material or was acting on behalf of the copyright’s owner along with each takedown notice it submitted to Temu while the suit is pending (proof that is not normally required by the DMCA). It also asked that Shein submit notices for no more than 100 images a day and that all notices include clickable, verified links.

The court denied the preliminary injunction. The problem for Temu, the court found, was that it had not established irreparable harm from the allegedly flawed takedown notices. Temu acknowledged that it could not establish irreparable harm merely from the lost sales of products taken down from its website, as that could be compensated with financial remedies. But Temu asserted several other grounds for irreparable harm arising from the notices. None was persuasive to the court.

To begin with, the court found, Temu had not established that the takedown notices caused it reputational harm. Temu argued that when it removed images from its platform based on notices submitted by Shein it had received complaints from affected sellers. But the two declarations it submitted from affected sellers did not complain about Temu, the court noted, but about Shein. To show irreparable harm, the court emphasized, Temu would have to argue that its own reputation was at risk. “Without anything from Temu suggesting that is the case, or that it is a problem more widespread than two of its many suppliers,” the court found, “the Court cannot say the harm is ‘certain and great’ and ‘actual and not theoretical’” under applicable caselaw.

Nor could Temu prevail by arguing that the takedowns interfered with its seller and customer relationships, the court found. Temu argued that Shein submitted the notices because it wanted suppliers to “lose confidence in working with Temu just as Temu is experiencing critical growth and building brand recognition.” But Temu’s evidence just didn’t add up, the court observed. To be sure, the court noted, the rate at which new ultra-fast-fashion sellers were joining the Temu platform had dropped by 30% recently. “But a reduction in the rate that Temu adds new ultra-fast-fashion sellers to its platform might be expected over time given its representation that it relies on a very narrow pool of qualified suppliers,” the court noted. “In fact, Temu’s representations on this point are consistent with sellers continuing to join the site, although at a slower rate.”

Temu’s final argument about the number of listings on its websites also did not hold water. Temu argued that with fewer listings on its website, prospective customers were less likely to choose to shop on Temu, thus “endangering Temu’s ability to compete in the ultra-fast-fashion market at a critical time of growth in the American market.” But Temu had not shown such harm was irreparable, the court found. “When it filed its motion,” the court noted, “Temu had been receiving takedown notices from Shein for well over a year. And yet, it remains operating, with no evidence of particular hardship.” The evidence would not support the injunction.

The Case is No. 1:23-cv-03706-TJK.

Judge: Kelly, T.

Attorneys: Anna Naydonov (White & Case LLP) for Whaleco Inc. Michael Domenic Bonanno (Quinn Emanuel Urquhart & Sullivan, LLP) for Shein Technology LLC.

Companies: Whaleco Inc.; Shein Technology LLC

Cases: Copyright TechnologyInternet DistrictofColumbiaNews GCNNews