AI-based counterfeiting at heart of US accusations against Shein

Artificial intelligence, and its ability to ‘draw inspiration’ from existing designs, has sparked a growing debate in art and retail. Three US designers have filed lawsuits against Chinese ultra-fast-fashion giant Shein, whose design algorithm is said to have identically replicated some of their creations. A case that could become a benchmark, being based on US legislation targeting organised crime.

The plaintiffs in this case are Krista Perry, Larissa Martinez and Jay Baron. Perry has claimed that her ‘Floral Bloom’ fabric pattern has been exactly reproduced on some Shein products. She also found her ‘Make It Fun’ poster design on the Chinese site, again perfectly replicated. 

Martinez, who runs Miracle Eye, a family brand of ethical apparel, has claimed that Shein identically reproduced their ‘Orange Daisies’ pattern, featuring it in a similar model of short dungarees. And Baron claimed that his own ‘Trying My Best’ design, used to decorate employee badges in the USA, was copied down to the actual lettering.

“The plaintiffs were as surprised as they were outraged,” stated attorneys Gluck and Erikson in the complaint they filed. “Why would Shein take the risk of reproducing their work precisely, when it would be easier and clearly less problematic to simply copy it to some degree, as other companies in the apparel industry often do? Once again, it turns out that making exact copies is an integral part of Shein’s ‘design’ process and organizational DNA,” added the attorneys.

In a 52-page document that FashionNetwork.com was able to read, the attorneys upheld the claims of the original designers against Shein, whose AI algorithms can detect and copy the products with the highest chance of commercial success, making the original designers’ loss of earnings even greater.

According to the plaintiffs, the issue is that this behaviour isn’t merely an anomaly but an example of Shein’s actual technological-business model. “There are no Coco Chanel or Yves Saint Laurent behind the Shein empire. Instead, there is a mysterious tech genius, Xu Yangtian, aka Chris Xu, of whom almost nothing is known,” indicated the complaint, which includes a complex diagram of the various entities through which Shein, according to the plaintiffs, is trying to circumvent its legal obligations. And when designers sound the alarm, Shein is said to try to avoid prosecution by offering “minimal” compensation.

“While Shein’s intellectual property theft and avoidance of liability are facilitated by its Byzantine company structure and the willingness of its corporate owners to commit systematic and repeated infringements (…), there does exist a legal framework that could provide the necessary remedies,” stated the attorneys, who have invoked the Racketeer Influenced and Corrupt Organizations (RICO) Act. RICO targets organised crime, and makes it possible to prosecute all the players that are directly or indirectly involved in an organised racketeering activity.

Contacted by the AP agency about these complaints, Shein responded that the company “takes all infringement allegations seriously, and takes prompt action when complaints are filed by valid intellectual property rights holders.” In the last few months, Shein is said to have spent approximately $600,000 on lobbying activities in the USA.

The Chinese group is fighting legal battles on several fronts. Some 50 complaints in three years have reportedly pitted Shein against names like Ralph Lauren and Stüssy.

Meanwhile, Shein’s Chinese competitor Temu, which has entered the US market in force, is suing Shein for abuse of dominant position, accusing it of forcing suppliers not to produce for Temu, thus violating US antitrust law. While US customs and legislative authorities are accusing Shein and Temu of avoiding payment of customs duties by making multiple small shipments to stay below tax thresholds.