H&M sues fast fashion rival Shein for copyright infringement

Fast-fashion retailer Shein is being sued by H&M for copyright infringement in Hong Kong, where the litigation aimed at mitigating the threat posed by its Chinese rival has been underway since 2021.

Zoetop Business Co., the Hong Kong-based entity that previously owned Shein, is among the defendants, as is Shein Group Ltd., according to a writ of summons issued in July 2021 and recently obtained by Bloomberg News. Stockholm-based H&M asked for unspecified damages and an injunction to stop Shein from infringing on its copyright and trademarks.

Details of the filing, including photos of dozens of items from swimwear to sweaters that H&M said was evidence that Shein stole its designs, were released to the public after a hearing at the Hong Kong High Court on June 21. The next hearing is slated to take place July 31.

H&M confirmed it filed a lawsuit against Shein in Hong Kong, claiming its fast-fashion competitor “in multiple cases has infringed on our designs” according to a spokesperson for the Swedish fashion retailer. Shein declined to comment on pending litigation. H&M fell less than 1 per cent in early trading.

The Hong Kong court heard the case for the first time last September, and the judge allowed the case to proceed, according to a separate document released in May.

While there have been many allegations of intellectual property infringement levelled against the online retailer in the past three years, H&M’s action is a rare case of an established fast-fashion rival filing suit.

Shein’s sales in 2021 were far less than those of H&M, but its skyrocketing sales growth, fuelled by the rapid launch of new products and strong digital marketing strategies on social media, drew the attention of companies and designers in western markets, including the US and Europe.

Shein hasn’t only been on the receiving end. It sued Chinese-owned online retailer Temu last year in the US, alleging trademark and copyright infringement as well as “false and deceptive business practices”.Temu counter-sued, alleging the company violated antitrust laws by using threats and intimidation to stop clothing manufacturers from working with it.

There have been more than a dozen lawsuits against Shein this year alone in the US brought by plaintiffs alleging intellectual property violations. And some American lawyers have accused the company of a pattern of racketeering activity, an approach commonly used to target organized crime.

They say Shein’s intellectual property theft is an integral part of its business model, and the company typically offers a small cash settlement to those designers.