IP Law Daily, COPYRIGHT—D.D.C.: Legal battle over China-based ‘ultra-fast-fashion’ will go forward for now, (Oct 6, 2025)

By Matthew Hersh, J.D.

But the case between retail giants Temu and Shein will be substantially narrowed.

Chinese e-commerce merchant Temu will be permitted to moved forward with copyright and trademark infringement claims against its longtime rival Shein, the federal court for the District of Columbia has held. But the court, in partially denying Shein’s motion to dismiss the complaint, found that Temu had not adequately pleaded trade secret misappropriation and antitrust claims against its e-commerce rival (WhaleCo Inc. v. Shein Technology LLC, No. 1:23-cv-03706-TJK (D.D.C. Sept. 30, 2025)).

The lawsuit arises out of a longtime dispute between two rival e-commerce marketplaces, Temu and Shein, which compete in what is known as the “ultra-fast fashion” retail market. As Temu’s 100-page complaint explains, whereas fast-fashion companies like H&M and Zara offer new styles roughly every 100 days, Temu and Shein do so “effectively on a daily basis”—thus “ultra-fast” or “on-demand” fashion. This direct-to-consumer model, Temu explains, offers highly expedited design-to-production times, ideal for those seeking a budget-friendly “quick refresh” of their wardrobe. Although Shein originally dominated the fast fashion market in this country, the complaint asserts, Temu fast made inroads into the U.S. market after its entry in 2022. Indeed, within a year, the complaint asserts, Temu served about thirty million daily users and had “become a household name in American retail.”

Temu’s entry into the market brought a quick reaction from Shein—but according to the complaint, not a lawful one. Indeed, threatened by Temu’s rise, Temu claims, Shein “hatched a desperate plan” to disrupt Temu’s operations and slow its growth in the United States. That scheme, Temu claims, runs the gamut from abusing the Digital Millenium Copyright Act, copying Temu’s intellectual property, stealing its confidential information, and tying up Chinese suppliers through exclusive-dealing agreements and intimidation, to filing dubious infringement lawsuits and defrauding the U.S. Copyright Office. The complaint states a whopping 18 different claims arising under both federal and District of Columbia law.

Shein moved to dismiss the complaint, leading to this opinion.

DMCA. The court first found that Temu adequately stated a claim under the DMCA. Temu alleged that Shein engaged in a campaign to flood Temu with sham DMCA notices. Among other things, Temu claims, Shein sent notices for copyrights it did not own, sent notices for products it did not sell on its own website (many of which were misleadingly similar to products Shein did sell), sent notices with non-functioning links, strategically sent many DMCA notices at once in order to delay Temu’s response times and disrupt its business, and destroyed evidence of its false filings. Shein argued that Temu failed to plead that it acted “knowingly”—but the court was not persuaded. To make out its claim, the court noted, Temu was required only to plead enough facts to show that Shein “subjectively had actual knowledge of the misrepresentation.” Temu’s extensive allegations of Shein’s misconduct, along with its assertions of Shein’s knowledge, was more sufficient.

Copyright infringement. The court also found that Temu adequately stated a claim for copyright infringement. Temu alleged that Shein infringed its copyrights by copying the wording and various artistic elements in a series of video games that Temu hosted on its site—games that had been highly successful in luring customers. Shein argued that the “arcade-style elements” of Temu’s games, along with its allegedly “common catch-phrases,” were not copyrightable. But “[t]hese arguments are premature,” the court found. “Right now, the Court must accept the allegations of creativity as true because assessing whether a work is copyrightable is a subtle inquiry, often impossible at the pleading stage,” the court noted. “Perhaps Shein is right that the arrangement and selection of the games features lack a creative spark, but that is for another day.”

Declaration of fraud on the Copyright Office. The court found that this claim, too, could go forward. Temu challenged dozens of Shein’s copyright registrations on the grounds that the registrations were based on knowing misrepresentations, backdated assignment agreements, works where Shein does not own the copyrights, and “coercive, invalid IP transfers.” Shein argued, in response, that the court did not have power to grant the relief Temu sought. To the extent that Temu sought an order actually invalidating the registrations, the court noted, Shein was right that there was no authority for the court to do so—only the Copyright Office could do that. But while the court could not actually invalidate the registrations, the court noted, it could still enter a declaration that the registration was obtained by fraud. Thus, this portion of Temu’s request for a remedy would go forward.

Trade dress infringement. The court also found that Temu could move forward on its claim that Shein replicated elements of the “look and feel” of the video games on its website. Shein argued that the claim should fail because Temu had not alleged facts establishing that its alleged trade dress was non-functional. “That Temu does not use the term ‘non-functional,’” the court responded, was no reason to dismiss the claim, as the complaint otherwise included “factual allegations and visual representations sufficient to infer non-functionality.” Shein also argued that the design of Temu’s games was unprotectable as “inseparable from the idea of arcade-style games.” But “when a plaintiff claims trade dress in the combination of elements, as Temu does,” the court noted, “it does not matter that individual features are functional so long as the appearance of the trade dress, when viewed as a whole, is non-functional.” Finally, the court noted, while Temu had not yet come forward with evidence that its trade dress had acquired a secondary meaning or that there was a likelihood of confusion between the two websites, a motion to dismiss was “not the proper vehicle to make those arguments.”

Trade secret misappropriation. But while Temu would move forward on its copyright and trademark-based claims, its other claims would fail. With respect to the trade-secret misappropriation claims, the court found, the problem was that a claim under the Defend Trade Secrets Act (DTSA) cannot lie unless an “act in furtherance” of the misappropriation has occurred in the United States. Temu alleged that Shein misappropriated its trade secrets when it summoned Temu’s suppliers to Shein’s offices in China, seized their phones, and forced them to provide log-in credentials to Temu’s seller portal—thus giving Shein access to a wide variety of Temu’s commercial and financial information. But that did not occur in the United States, the court noted, so it could not support a DTSA claim. And to the extent that Temu argued in briefing that Shein used the information it acquired “to understand Temu’s economic positions and gain an advantage in the U.S. market,” the court found, it ran into another roadblock: “its complaint does not say that.” Temu’s complaint, at least as it stood now, would not suffice.

Sherman Act. The court also found that it did not have jurisdiction to hear Temu’s Sherman Act claims. Once again, the court noted, the issue was extraterritoriality. Temu claimed that Shein was blocking Temu’s access to specialized suppliers in China by entering into exclusive-dealing agreements with them, seizing the suppliers’ IP rights, using “mafia-style” intimidation tactics to scare them away from Temu, and setting anti-competitive pricing floor requirements. But none of this conduct involved the actual importation of goods into the United States, the court noted—indeed, Shein was not itself an importer at all. Moreover, the court noted, Temu did not plausibly allege that Shein’s alleged conduct in China had a “direct or immediate effect” on the “act of importing goods” into the United States. “While the alleged conduct impacts the market in which Temu and Shein compete for Chinese suppliers to use their platforms,” the court found, “it does not directly or immediately interfere with the act of importing goods into the United States. In other words, none of the alleged conduct places any direct or immediate restriction on any party’s ability to import a good into the United States, let alone preclude a party from exporting goods into the United States.” This claim, too, would fail.

Clayton Act. The court also dismissed Temu’s Clayton Act allegations. Temu alleged that Shein’s exclusive dealing contracts with its suppliers tended to “substantially lessen competition or tend to create a monopoly in any line of commerce,” in violation of Section 3 of the Act. But the problem for Temu, the court noted, was that Shein acted only as a purchaser, and not as a seller, in these alleged exclusive dealing contracts. And “the statute’s plain language,” the court noted, “makes clear that it does not impose liability on purchasers for exclusive dealing contracts.” Temu contended that Shein was indeed a seller under the Act applies because it “contracts with suppliers to identify trends and ‘resells products’ to U.S. consumers.” But that “misses the point,” the court noted. “For purposes of this inquiry, it is irrelevant that Shein might otherwise function as a seller. What matters is its role in the transactions at issue. And the complaint identifies no exclusive-dealing contracts other than those between Shein and its suppliers where Shein is the seller.” Thus, the court concluded, “Temu’s attempt to fit Shein’s square conduct into the round hole of Section 3 cannot succeed.”

Remaining claims. The court then addressed several other claims arising exclusively under state law. Temu adequately stated a claim for unfair competition, the court noted, because it adequately pleaded a trade dress claim—enough to make out a claim of unfair competition under the common law as it had evolved in D.C. courts. Temu’s claim of tortious interference of contract, by contrast, “fails because it identifies no contract at all with which Shein interfered.” Finally, Temu’s claim of abuse of process “never gets out of the starting gate,” the court noted. Temu argued that Shein had abused the legal process by filing meritless copyright actions in order to disrupt Temu’s business. But “simply filing a lawsuit—no matter what ulterior motive may have prompted it—is not actionable because the gist of this cause of action lies in the improper use of the judicial process after the suit is filed,” the court emphasized. Since the complaint did not identify any act that Shein had taken “other than filing and pursuing its lawsuits,” the court noted, the claim would fail.

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 and Roadget Business Pte. Ltd.

Companies: WhaleCo Inc.; Shein Technology LLC; Roadget Business Pte. Ltd.

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